Big Fat Pharma and the “Free Market”

The United States government, through its National Institutes of Health (NIH), supports thousands of drug trials each year, and spends about $40 billion per year on research. 

At the same time, it continues to grant legal monopolies to companies in the form of patents. These patents are supposed to last 20 years, but some of the biggest pharmaceutical companies take advantage of the patent system by extending these 20-year terms over and over, locking in their monopolies and their fixed drug prices.

The pharma industry spends about $70 billion on research in a year. I doubt they’d be able to afford this luxury without the monopoly guarantee granted them by the USPTO. Which is guaranteed by taxpayers. Which is us.

Right, so in other words:

1. We, as consumers, pay these pharamaceutical companies outrageous sums for medicines

2. We, as taxpayers, give these pharmaceutical companies monopoly control (which they gain via cheating on their patents) so that we end up

3. Continuing to pay prices that are 256 percent above the free market price for our medicines.

One way to reform is by redirecting the money: directly fund pharmaceutical research through the NIH, instead of granting companies a monopoly in what we like to think is a “free market.” This is described in a recent op-ed at

 Another way is through a bill called the Prescription Drug Price Relief Act, sponsored by Bernie Sanders, Elizabeth Warren, and others, which would require the Secretary of Health and Human Services to “make sure that Americans don’t pay more for prescription drugs than the median price in five major countries: Canada, the United Kingdom, France, Germany and Japan. If pharmaceutical manufacturers refuse to lower drug prices below that level, the federal government would approve cheaper generic versions of those drugs, regardless of any patents or market exclusivities in place.”

The bill was introduced last January and is co-sponsored by Elizabeth Warren, Cory Booker, Kamala Harris, Richard Blumenthal and Kirsten Gillibrand.

(Originally published Jul 12, 2019. Update, Feb 2024: the bill is still in committee.)

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