Skip to main content
Containers of prescription medication

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

Dana Brown

Dana Brown

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

Director of the Next System Project more

Thomas Hanna

Thomas Hanna

Director of Research at The Democracy Collaborative more

More related work

Pharmaceutical products on shelves

Medicine For All: The Case for a Public Option in the Pharmaceutical Industry

Democratic, public ownership of pharmaceutical development, production, and distribution in the U.S. is necessary to combat the increasingly harmful impacts of Big Pharma which decades of regulation have failed to counteract. read more
Tools are hung on a wall of a workshop with different colors overlapping over them.

Election-year debate: “Wish-list economics” or necessary transformation?

The Democracy Collaborative weighs in on “wish-list economics,” making the case that in the face of extreme crises radical solutions are practical solutions. read more
Economic Update host Richard Wolff interviews John Duda

Worker co-ops rising

Democracy Collaborative communications director John Duda explains in this edition of “Economic Update with Richard Wolff” how worker cooperatives have become a rising movement that is shaping mainstream economic development strategy around the country. read more