Michael Kinch - The Price of Health: The Modern Pharmaceutical Enterprise and the Betrayal of a History of Care

The Price of Health

The Modern Pharmaceutical Industry and the Betrayal of a History of Care

Michael Kinch and Lori Weiman

Foreword by Mark Cuban

THE PRICE OF HEALTH

Pegasus Books, Ltd.

148 West 37th Street, 13th Floor

New York, NY 10018

Copyright 2021 by Michael Kinch and Lori Weiman

Foreword copyright 2021 by Mark Cuban

First Pegasus Books edition April 2021

Interior design by Maria Fernandez

Jacket design : Brock Book Design Co. / Charles Brock Imagery: AdobeStock

All rights reserved. No part of this book may be reproduced in whole or in part without written permission from the publisher, except by reviewers who may quote brief excerpts in connection with a review in a newspaper, magazine, or electronic publication; nor may any part of this book be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or other, without written permission from the publisher.

Library of Congress Cataloging-in-Publication Data is available.

ISBN: 978-1-64313-680-6

Ebook ISBN: 978-1-64313-681-3

Distributed by Simon & Schuster

www.pegasusbooks.com

This book is dedicated to all the hard-working scientists, researchers, medical professionals, pharmacists, manufacturing engineers, and public health and policy experts who entered their professions with the goal of improving health, and who continue to dedicate their lives toward that mission.

by Mark Cuban

T rust. It is at the heart of how all of us deal with pharmaceuticals and the companies that produce them.

We want to trust that these companies are making products that do what the label says it does. We want to trust that the companies which create the drugs we take properly educate the doctors that write our prescriptions. And we want to trust that when we get those drugs from our pharmacists they are priced fairly, even though all evidence suggests otherwise.

Examples of extreme pricing abound, including the nauseating exploits of the now jailed Pharma Bro, Martin Shkreli, who exploited unique features of the pharmaceutical industry to hike the prices of needed medicines by outrageous amounts simply because he could. Likewise, for out-of-patent and overpriced insulin and EpiPens. Overpricing has led to far too many of us not being able to afford our medications or resorting to rationing or having to choose between eating or acquiring the drugs we need to survive. It is no surprise that as a country we are outraged at how the pharmaceutical industry has violated our trust and put profits over the health and safety of their fellow citizens.

It is not that we all havent benefited from the many technological and scientific advancements in new drugs, vaccines, and therapies. We certainly have. We have seen diseases conquered and the quality and quantity of our lives improve and expand.

For most of recent history, these benefits were affordable and accessible, albeit sometimes with the help of government interventions, such as those that subsidize the costs of childhood vaccines or, at the other end of the spectrum, to help the elderly gain access to medicines via Medicare Part D. That is no longer the case.

The unanswered questions, or the questions that the pharmaceutical industry does its best to keep unanswered, are: Why, despite all the technological advances and their resultant improved efficiencies and lower costs have the prices for drugs continued to skyrocket? Why, if the taxpayer-funded National Institute of Health research accounts for the basis of one third of medicines discovered in recent years, are those drugs unaffordably priced?

In order to change the pricing of the pharmaceutical industry we have to get at the heart of why pricing is so outrageous. With funding from my foundation, Michael Kinch (from Centers for Research Innovation in Biotechnology at Washington University in St. Louis) and the team at the nonprofit 46brooklyn Research have exposed many issues. These are just a few of the questions The Price of Health tries to finally answer.

This is a must-read book for those who want to change the course of healthcare in our country.

T hink back ten, five, or even two years ago: What if we told you that a new, deadly viral disease was going to take over the world and kill 500,000 people within just six months and infect nearly ten million more around the globe? What if we told you that the virus would puzzle leading infectious disease experts and global public health officials because this virus would not behave like any other before it? And what if we told you that as the infection spread, the symptoms would mutate, becoming more varied and complicated? And what would you think if we told you that this disease would hit the United States worse than it would other parts of the world? The disease would create panic so systemic the government would shut down public life; businesses everywhere would be told to close and people restricted to their homes. Such actions would topple the economy, devastate Wall Street, and put strains on access to food and consumer goods. After months of isolation, grappling with the loss of jobs, school, and health insurance, tensions would flare, leading to riots and community outrage.

But wait, theres more. What if, in the grips of all of this terror and crisis, you learned that as the dedicated scientists and researchers were rushing to find a cure, treatment, or vaccine, their bosses were working largely in secret with Wall Street and the government? And, despite the fact that American taxpayers would underwrite most of the costs of development and production, the government left decisions about pricing to the companies, who could charge prices thousands of times higher than their cost to manufacture it? This approach was part of a goal to charge as much as possible and maximize profits, even as pharma executives knew it would cost the lives of the poor and less fortunate, including any without insuranceeven those who had lost their insurance when their jobs were eliminated due to the virus itself! What would you do if such a scenario occurred? Would you take to the streets in protest? Would you demand to know how much it cost to develop and make the drugs, which, by the way, were largely subsidized by your own tax dollars? Would you demand that everyone have equal access to this information and that everyone knew what the price was and that they would be charged the exact same price regardless which pharmacy, hospital, or doctor they went to? Would you hold those accountable who had profited unfairly off this healthcare crisis and enact transparency laws to prevent such things from ever happening again? Would you even believe this scenario could happen in the United States, or would you have chalked it up as the storyline for a new horror movie?

This is sadly not fiction, but a recitation of the COVID-19 pandemic that, in 2020, we are all enduring together. Through a very publicized process, the general public was exposed to the scientific and medical processes typically needed to obtain regulatory approvals for drugs and vaccines, albeit occurring at an accelerated basis. While not everyone appreciated the uncertainties of the scientific endeavor or latched onto the fine details, these products provided greater clarity and insight to many as to how drugs and vaccines are developed: who funds the work; where technology originates; and who conducts the actual research and testing. We also experienced a collective glimpse into the murky world of drug pricing, a process that in this instance, as with drugs developed on a regular basis, is purposefully hidden from view. A cynic will say thats because those involved are maximizing personal wealth and not public health. But the truth is that the pricing question is more complicated than that, especially in the United States, whose citizens pay the highest prices for the same drugs used throughout the world. The process by which drugs are developed, manufactured, distributed, and priced in the United States is the very focus of this book, although we will look abroad for comparison purposes and potential ideas on how certain adjustments could benefit the American consumer without destroying the industry dedicated to advancing human healthcare. For instance, we will discuss a particularly creative experiment underway in Germany where legislation has been introduced to reward innovative new medicines that provide clear medical benefits, while controlling the prices of less innovative or nonbeneficial drugs.