Skip to main content
Containers of prescription medication

It’s Time for a Public Option in the Pharmaceutical Industry

Dana Brown

Dana Brown

Deputy Director of the Next System Project more

Thomas Hanna

Thomas Hanna

Director of Research at The Democracy Collaborative more

Public Planning Democratic Ownership Health & Wellbeing

Drug companies are hated for a reason—they exist to maximize profits, not make us healthier. It’s time to put them under public control.

Drug companies are among the most widely despised businesses in America. Infamous for generating incredible profits at the expense of the sick and dying while leveraging their enormous economic power to evade regulations (to say nothing of their role in the opioid epidemic), they are often seen as a textbook profiteer. Already, many Americans report not filling prescriptions, cutting pills in half or skipping doses due to costs. In the world’s most expensive healthcare system, more than 10 percent of total healthcare costsand 21 percent of employer healthcare benefits are attributed to pharmaceuticals. Research shows that “drug spending is growing faster than any other part of the health care dollar.”

During Friday’s long-awaited speech on drug prices, President Trump blamed “foreign freeloaders”, the drug lobby and “middlemen” for rising prices, promising once again to put American patients first. However, experts predict the plan—which focuses on private sector competition and negotiation—will have little effect on the industry or its practices.

In many cases, the profits extracted by drug companies represent a form of double-taxation, given that public funding underpins pharmaceutical research and development (R&D). For instance, publicly-funded research contributed to the development of the cholesterol-lowering medication Crestor. Yet, U.S. taxpayers spent billions more (either out of pocket, through rising insurance premiums or through Medicare or Medicaid) to take the drug at marked up prices while Pharma giant AstraZeneca pulled in over $16 billion in profits on Crestor alone over a three-year period.

And that’s not all. We pay a third time when we lose revenue through tax breaks and loopholes that allow pharmaceutical companies to market their drugs to us tax-freeand operate vast networks of off-shore subsidiaries to avoid paying taxes.

In this context, and with increasing pressure to keep healthcare costs down as the population gets older, isn’t it time to consider a public option in the pharmaceutical sector? 

Read the rest of this article at In These Times

Dana Brown

Dana Brown

Deputy Director of the Next System Project more

Thomas Hanna

Thomas Hanna

Director of Research at The Democracy Collaborative more

More related work

Cover of book, superimposed on a map of the US

Our Common Wealth: The return of public ownership in the United States

Public ownership is more widespread and popular in the United States than is commonly understood. Re-envisioned as participatory and responsive to community needs, it could be a critical piece of a democratic economy. read more
Overhead views of New York and LA with a bank icon superimposed across them

The Campaign for Public Banks, From Coast to Coast

David Jette, the co-founder and legislative director of Public Bank LA, and Juleon Robinson, a program associate at the New Economy Project working on a campaign to establish a municipal bank in New York City, discuss the nationwide movement to establish public banks, including a landmark ballot measure in Los Angeles. read more
Element of the democratic economy: Public bank

Public Banks

How financial institutions owned by and accountable to the people help create a nonextractive economy. read more