drugs healthcare

Drug Prices: Blame Regulation

Some argue that it was too much regulation, not too little regulation that has caused the FDA to reject competing drugs due to existing patents. In a sense, this is good so that pharmaceutical companies can recoup R&D costs to create new drugs. On the other hand, the patients need to be able to afford the existing drugs (Fox, 2016). The industry tries to remediate this catch 22 by issuing patents. These temporary monopolies allow Big Pharma to set the price; then upon patent expiration, competition ensues. Because of this current model, a new type of a drug company is emerging: a drug company doesn’t create drugs, but rather takes advantage of existing drugs with expired patents. Perhaps a solution to the drug pricing problem is to increase competition.

When consumers go to a pharmacy counter, they expect to be met with kind customer service, knowledgeable staff, and swift delivery. Customers don’t expect that the smiling face behind the counter is sleeping with their insurance company. The standard practice of insurance companies that offer drug plans is if the total drug cost (TDC) is less than the plan’s copay, the patient would be expected to pay the total drug cost. However, this introduces an easy point of opportunity: the dug plan could charge the full copay. This is known as a clawback. Recently, Walgreens was sued over their copay policy on generic drugs (Schencker, 2017). Around 16 other lawsuits have been filed in early 2017 regarding these clawbacks. It has also been exposed that there are “gag clauses” that seek to prohibit pharmacists from disclosing that it may be cheaper to bill prescriptions without insurance (Hopkins, 2017). The fact that there is a name for this intimate practice is indicative of guilty behavior.

By the time a change is made in Washington DC and trickles through the regulatory maze of the Department of Health and Human Services and finally reaches the health plan, the consumer could have made a few steps to reduce the cost of their own medication. Consumers can initiate their own cost savings. They have the power to choose generic medications, research the policy of their insurance plan, seek manufacture coupons, and manually cut pills when it’s deemed safe by the pharmacist (Marsa, 2017).


Fox, J. (2016). The Strange Case of Off-Patent Drug Price Gougers. Bloomberg View. Retrieved from

Hopkins, J. (2017). Pharmacy ‘Clawbacks’ Targeted in Latest State Law Aimed at PBMs. Bloomberg Businessweek. Retrieved from

Marsa, L. (2017). What you can do: Ways to reduce your own medication costs. AARP Bulletin. Retrieved from

Schencker, L. (2017). Lawsuit alleges Walgreens overcharges customers with insurance for generic drugs. Chicago Tribune. Retrieved from