Prop 61 is on the table in California.
Basically, if California voters decide to go “yes” they will cap pharmaceutical drug prices purchased by state agencies to the amount the Department of Veterans Affairs pays. And the VA pays the lowest prices among any agency, state or federal. Although there are questions on whether VA necessarily publicizes what it pays for certain drugs and whether California agencies would be even able to see them.
On the Real Time with Bill Maher episode that aired Oct. 14, Bernie Sanders, the bane of corporate America, showed up and after calling Big Pharma “crooks” talked up the need to negotiate drug prices and hence the value of Prop 61.
To which, probably predictably, conservative columnist Andrew Sullivan, who was also on the show, remarked:
“Don’t you think capping the prices would hurt innovation and new drugs coming out?”
The septuagenarian senator from Vermont, ironically with a large millennial following, replied, by agreeing with Maher, “It is bullshit.”
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
And then he raised his right hand and retorted:
“Innovation money? They are spending, as I understand it, a $100 million right here in California to beat this proposition. $100 million….They are spending far more money in marketing and advertising than they do in research and development.”
To which Sullivan mustered up a wry smile.
The $100 million is what several news accounts report as what the pharmaceutical industry is on track to spend to defeat the ballot measure up on Nov. 8.
But what of Sanders’ claim that the industry spends more money on sales and marketing than on R&D already? For that, one has to turn to a 2015 article on Washington Post that referenced John Oliver’s weekly comedy show on the issue of drug pricing. Here is the data presented in an infographic that the article references that shows in 2013, the following were what the top 10 pharma companies spent on sales and marketing, and R&D.
Only Roche Diagnostics, based on these 2013 numbers, spent more on R&D than on sales and marketing. So the merits or demerits of Prop 61 aside, the innovation argument seems a trifle hollow.
Photo: Jeff Mitchell, Getty Images
Update: The data used in the infographic was based on data from market research firm GlobalData.
