Today’s pharmaceutical industry is failing most Americans. Every day, a new story emerges about an outrageous price spike for a lifesaving drug, a fraud perpetrated on the American people in the name of profit, or the revolving door of administration officials entering an agency from a drug company or leaving to go to one—a practice so common it hardly raises an eyebrow. In 2016, total drug costs in the US increased by 6.3 percent, approximately triple the rate of other goods and services. This broken system may not be producing good health outcomes for Americans, but it is resulting in record profits for the pharmaceutical industry.
The idea that the high costs of medicines are the price public must pay for innovation evinces a worldview that is wholly blind to anything but a marketized approach to prescription drug provision, despite the ways that such an approach cannot and will never meet the needs of American patients. The purpose of this issue brief is to propose another way. Building on a framework recently developed by the Roosevelt Institute’s Nell Abernathy, Darrick Hamilton, and Julie Margetta Morgan in New Rules for the 21st Century: Corporate Power, Public Power, and the Future of the American Economy, this brief will propose a series of structural reforms that deploy the tools of government in expansive ways—as Abernathy et al. describe it, a “one-two punch”—to rein in the industry’s extractive practices through stiffer market regulation and a substantially more aggressive use of direct public provisioning and democratically-accountable drug development.
This brief is the final installment in our series on prescription drugs. Drawing on previous papers by Roosevelt Institute experts, the first part briefly outlines how the rules of our economy—and a cramped, marketized approach to government power—have created the extractive, inefficient, and broken pharmaceutical industry we have today. The second part, building on the framework developed in New Rules for the 21st Century and the work of several scholars, proposes a series of structural reforms that, taken together, would create a pharmaceutical system that meets patients’ needs and sets a new course for drug policy around the world. Importantly, the purpose of this paper is not to argue for the specific policy proposals outlined here or suggest that they are the only iterations available. Instead, this paper offers a framework to address the pharmaceutical industry and explores the kinds of policies that scholars are contemplating that would, together, meet patients’ needs.