July 19, 2019

State AGs Taking Generic Drug Manufacturers to Court for Collusion to Raise the Costs Prescription Drugs.

A few weeks ago, over 40 State Attorney Generals launched a class-action lawsuit against most of the generic-drug manufacturers who have been colluding to increase the costs of otherwise old drugs. Over 9-thousand percent in some cases! Do you take Doxycycline for your skin? Insulin for your diabetes? You are a victim of this greed. Why are American Moms joining Insulin Caravans to London, Ontario, Canada to get Insulin for their children? 

Clear evidence of drug company communications fixing drug pricing has been mapped out in great detail and we may be on the cusp of uncovering the largest antitrust event in US history in terms of costs. Over 90% of US drug-prescriptions are for generic drugs and these prescriptions are the largest single driver of health insurance premium increases over the last 20 years. The millions of Americans that have been potentially harmed by this practice is shocking. From older antibiotics that have gone suddenly from $20 per bottle to over $1000 per bottle, to even Insulin. These price increases you have likely seen on the evening news. 

     Many biochemists make human proteins, like Insulin, in bacteria using recombinant DNA technology. For about $400, using your credit card, you can order the circular DNA plasmid with the correct DNA sequence from several companies that synthesize the DNA for you in about 2 weeks. 1-week if you pay for a rush job. Using a simple 15 second heat shock at 42°C, the bacteria take up the plasmid DNA and they will make the protein endoded by the plasmid. Such as Human Insulin protein. The protein is purified and this allows us to make the human version of a protein in great amounts. Insulin was traditionally purified from farm animal pancreas for many decades, but by 1985 its manufacture in bacteria ( E. Coli ) was well underway. 

     Biotechnology, to improve for the supply of Insulin with the actual Human version of the Insulin protein's amino-acid sequence. Scientists, technicians, engineers had to work and get paid to develop the large scale production process, and yes that took millions of dollars. Yet it is also safe to say that development costs were recovered in a matter of several years. After that point, the increasing numbers of diabetics moving from animal-sourced to recombinant Insulin, and improvements in the efficiency of production, offset even most of economic inflation's effect on cost. Certainly relative to current wages and salaries. 

     Making proteins in bacteria in 2019 is no longer the new and difficult process it was in the early 1980s. In 2017, my lab developed a method to make a different human protein in E. Coli. That required tens of thousands of dollars, mostly supporting wages of technical workers over two years, part-time. As a scientist, I cannot see any reason for Insulin to be so expensive for only Americans. Something fishy is going on. 

     Indeed, it turns out that the biggest generic-drug manufacturers have been colluding to fix prices for all of us who rely on common medications. Over 90% of all prescriptions written in the United States are for generics. Collusion is making all of us, and our employers, poorer as we pay higher health insurance rates. Price-fixing is simply and firmly against the law. Who has uncovered this and is moving to protect you and me from this damage? Our Federal Government has moved a wee bit, but not much. Leave it to our State Governments. Public regulators. So, this is a clear example of why the concept of "no government regulations" would be quite simply bad for society. 

Have you seen CBS's 60 Minutes: read Bill Whitaker's report from May 12th for more information on the current generic-drug lawsuits this week from US States AGs. If you did not see this report, watch it or read the story. It will make you quite angry, and well you should be if you take any prescription medications, including insulin:

     The reason for collusion? The reason seems to be pure profits. Once a company starts to get really big, it is often managed by executives that may not even have a specialty background in the company they manage. The CEO of an aircraft manufacturer may not have been a pilot and the CEO of a drug company may never have been a scientist, industrial chemist or even a physician who cares. Sometimes companies put profit before human decency. A decade ago GM saved 50 cents on each ignition switch, looking only at the bottom line and many Americans died or were injured seriously. Being sued and NTSB investigations are all that stopped that morally bankrupt corporate behavior. So there is a place for government oversight when it concerns the very lives of us and our children. In 2019, drug company collusion is another glaring example of corporate greed, which in this case is causing most of the increased costs of health insurance you and I. 

As always, think like a scientist, even if it is not your day-job and good luck out there,
Ken Mitton

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