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US Pharma’s Business Model: Why It Is Broken, and How It Can Be Fixed

May 22, 2017

Price gouging in the US pharmaceutical drug industry goes back more than three decades. In 1985 US Representative Henry Waxman, chair of the House Subcommittee on Health and the Environment, accused the pharmaceutical industry of “gouging the American public” with “outrageous” price increases, driven by “greed on a massive scale.” Despite many Congressional inquiries since the 1980s, including the case of Gilead Sciences’ extortionate pricing of the Hepatitis-C drug Sovaldi since 2014, the US government does not regulate drug prices. UK Prescription Price Regulation Scheme data for 1996 through 2008 show that, while drug prices in other advanced nations were close to the UK’s regulated prices, those in the United States were between 74% and 152% higher. Médecins Sans Frontières (MSF) has produced abundant evidence that US drug prices are by far the highest in the world.

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