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Big Pharma is buying off members of Congress to encourage an end to "March-in" and block any efforts to regulate the cost of drugs or let Medicare negotiate prices. (Photo: Chris Potter/Flickr/cc)

We Are Being Robbed Blind by Big Pharma

Big Pharma's obscenely-priced drugs developed with tax dollars will continue to drain working people of income, savings, and—ultimately—their health until America recognizes healthcare as a right.

Thom Hartmann

Molnupiravir is the new pill that's been all over the news recently because it can cut hospitalizations and deaths of unvaccinated Covid-infected people by as much as half and doesn't require folks to go to the hospital or an infusion center, like the monoclonal antibody remdesivir. Just take a pill every day for five days and you're good.

It was originally developed by Emory University to treat horses infected with Venezuelan equine encephalitis with a $10 million grant from the Department of Defense and $19 million from the National Institutes of Health. In other words, its invention was paid for with your tax dollars.

Emory University passed along the patent on molnupiravir to a small company, Ridgeback Biotherapeutics, which in turn passed it along to the pharmaceutical giant Merck. Manufacturing cost for molnupiravir, according to a report from researchers with the Harvard School of Public Health, is around $17.74 for a 5-day course of treatment. Merck just signed a contract with the federal government to sell 1.7 million treatment courses for the government to distribute to infected people for … wait for it … $712.00 each. 

This price-gouging hustle was both made possible—and, ironically, perhaps made illegal—by a piece of legislation passed back in 1980 that gave universities the ability to sell patents to inventions funded with federal money to non-profit organizations and small businesses…but not to major corporations. Since then, small businesses like Ridgeback have served as middlemen handing off profitable pharmaceuticals developed with our tax dollars to giant corporations like Merck.

Back in 1980, Senators Birch Bayh and Bob Dole got passed, over then-President Jimmy Carter's objections (it was first shot down and only passed during the lame duck session by being attached to must-pass legislation) the Patent and Trademark Law Amendments Act, now usually referred to as Bayh-Dole.  Industry and trade groups loudly sing its praises, although they're worried about a provision of the law (that's apparently never been used) called "March-in Authority."

"March-in" allows the federal government to say, essentially, "We paid to develop this drug so you have to sell it to us at a reasonable price; we think you're ripping us off right now so we're going to claw back that patent from you and assign it to somebody else."

As professors Peter Arno and Michael Davis wrote in The Washington Post:

"Bayh-Dole is a provision of U.S. patent law that states that practically any new drug invented wholly or in part with federal funds will be made available to the public at a reasonable price. If it is not, then the government can insist that the drug be licensed to more reasonable manufacturers, and, if refused, license it to third parties that will make the drug available at a reasonable cost."

So Big Pharma called up their lobbyists and Trump's billionaire Secretary of Commerce, Wilbur Ross (who Forbes magazine said "could rank among the biggest grifters in American history"), jumped into the act.

In the last year of the Trump administration, Ross's Commerce Department began the process of stripping "March-in" out of Bayh-Dole so Big Pharma could rip off the US government as much as it wanted, whenever it wanted.  In the Federal Register it was phrased this way:

"(7) Clarify § 401.6 to include a provision that march-in rights shall not be exercised by an agency exclusively on the basis of business decisions of a contractor regarding the pricing of commercial goods and services arising from the practical application of the invention."

The issue is still live before the Biden Commerce Department, so watch this space.

Meanwhile, Big Pharma is buying off members of Congress to encourage an end to "March-in" and block any efforts to regulate the cost of drugs or let Medicare negotiate prices. 

That little provision draining billions every month from the Medicare fund, along with the privatization of Medicare through the Medicare Advantage Scam, came to us courtesy of the George W. Bush administration, after Bush tried and failed to entirely privatize both Social Security and Medicare.

Most recently, when legislation was before the House of Representatives to allow Medicare to radically cut their expenses by negotiating drug prices (just like the VA and major insurers do), it was shot down in committee by every single Republican joined by three paid-off "Problem Solver" Democrats: Scott Peters of California, Kathleen Rice of New York and Oregon's Kurt Schrader.

Drugs have become a huge rip-off of the American people, making Big Pharma's executives and shareholders fabulously rich and generating a huge pot of money that 5 conservatives on the Supreme Court ruled, in Citizens United, drug companies are welcome to use to corrupt politicians.  A recent study found:

  • "For 17 of the 20 top-selling drugs worldwide, drugmakers made more money from U.S. sales than from sales to all other countries in the rest of the world combined.
  • "For 11 of the 20 top-selling drugs worldwide, U.S. sales revenue was double or more the revenue for sales in the rest of the world."

We are, uniquely in the world, being robbed.

As Congressman Ro Khanna told The Daily Poster, "The pharmaceutical lobby is very savvy. They pick the one or two people they need to block things, on the relevant committees or at the relevant time." And this time, they've "picked" Senator Kyrsten Sinema, pouring a flood of cash into her pockets so she will block any efforts to control drug prices in Biden's reconciliation Build Back Better legislation.

As I lay out in my new book, The Hidden History of American Healthcare: Why Sickness Bankrupts You and Makes Others Insanely Rich, until America joins the rest of the developed world in considering healthcare a right rather than a privilege, these giant, multi-billion-dollar-a-year scams like Medicare Advantage and obscenely-priced drugs developed with our own tax dollars will continue to drain working people of their income, savings, and—ultimately—their health.

This article was first published on The Hartmann Report.

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

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