Creation of a Crisis: Why the Pharmaceutical Industry Chooses Profit Over People
February 21, 2019
By Ariela Weinberger
New issue brief explores how US policy choices have led to high drug prices, low health care investment, misaligned incentives, and escalating CEO pay across the pharmaceutical industry
NEW YORK, NY – Today, the Roosevelt Institute, a New York-based think tank that promotes progressive economic and political policy reforms, released “Profit Over Patients: How the Rules of our Economy Encourage the Pharmaceutical Industry’s Extractive Behavior,” the first in a series of issue briefs that aims to explore an industry that values profits over patients and public health. Written by Roosevelt Fellow Katy Milani and Advocacy and Policy Associate Devin Duffy and released in conjunction with People’s Action, one of the largest organizing networks in the country, the report seeks to explain how a country that comprises less than 5 percent of the world’s population represents between 30 and 40 percent of the global market for prescription drugs.
“Today’s extractive pharmaceutical industry arose from the rules that govern it; tax laws and antitrust policies that have encouraged the industry to prioritize on its bottom line, not patients,” said Milani. “As a result, the industry has been allowed to push a false narrative that claims that high drug prices are necessary to fund the research and development of cutting-edge medicine. In reality, these profits fund an industry that exploits a broken system to avoid true competition and puts shareholder wealth first.”
“The specific laws that govern patent protections and market exclusivity drive the market power problem in the pharmaceutical industry,” said Duffy. “Coupled with the lax antitrust enforcement that led to a series of mergers that consolidated the pharmaceutical industry, we are now dealing with powerful drug corporations that wield market power in increasingly extractive ways—largely to the detriment of patient outcomes.”
This report provides expert research that echoes the national Health Care for All campaign led by People’s Action, one of the most influential organizing networks in the country. People’s Action advocates for common sense policies that uphold the collective good, including rules that force drug companies to put patients before profits.
“The price gouging and the profit billionaires are making from my disease is killing me,” says Sharon Brown, an elementary school librarian from Tennessee who is being pushed into poverty as she tries to afford the $13,000 monthly cost of medications for her pulmonary hypertension condition. Brown gets help from nonprofits that help cover the co-pay, but without it, she’d have to choose between life-saving medicine or a roof over her head.
“It’s appalling that people in the US pay up to six times more for brand-name prescription drugs than their global counterparts,” said Connie Huynh, director of the People’s Action Health Care for All campaign.”Detaching prescription prices from billionaires’ profits is the first step toward reining in this health care crisis, as this Roosevelt Institute issue brief makes abundantly clear. Health care is a human right; it shouldn’t be a profiteering scheme.”
About the Roosevelt Institute
The Roosevelt Institute, a New York-based think tank, promotes bold policy reforms that would redefine the American economy and our democracy. With a focus on curbing corporate power and reclaiming public power, Roosevelt is helping people understand that the economy is shaped by choices—via institutions and the rules that structure markets—while also exploring the economics of race and gender and the changing 21st-century economy. Roosevelt is armed with a transformative vision for the future, working to move the country toward a new economic and political system: one built by many for the good of all.
To keep up to date with the Roosevelt Institute, please visit us on Twitter or follow our work at #RewriteTheRules.
About People’s Action
People’s Action is one of the largest and most influential organizing networks in the country. We are a progressive, multiracial, working-class coalition of more than a million people and 48 member organizations in 30 states. We fight for racial, gender, climate and economic justice.
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