The price of brand-name drugs has skyrocketed over the past several years, leading increasing numbers of Americans to switch over to cheaper generic drugs. But even those generic drugs are also increasingly costing Americans more money, as chain pharmacies across the country hike their prices to charge up to 18 times the drugs’ original cost. There’s one clear winner in this equation: the giant pharmaceutical companies that are raking in the profits.

Over the past decade, the 11 largest global drug companies reaped about $711 billion in profits, according to a new analysis from the Health Care for America Now (HCAN) advocacy group. In 2012 alone, the drug companies’ annual profits totaled nearly $84 billion. The organization’s analysis credits much of these profits to the federal policy that prevents Medicare from negotiating directly with drug companies — which allows Big Pharma to price gouge the government program’s prescription drug benefit, known as Medicare Part D:

Medicare’s prescription drug coverage is essential for seniors — and since Obamacare has helped ensure that more prescription drugs are now covered under Medicare Part D, millions of seniors have saved $6 billion on the medication they need. But, since Medicare is unable to negotiate bulk purchasing discounts, Big Pharma continues to overcharge the federal program for those drugs. HCAN points out that pharmaceutical profits soared around 2006, when Medicare Part D was first put in place.

Pharmaceutical companies often claim their huge profits are necessary because that money goes toward innovative drug research and development. But one recent study found that drug companies actually spend 19 times more on advertising their products than they do on investing resources to develop new ones. And some areas of scientific research, like the development of new vaccines to replace some old antibiotics that have become increasingly less effective over time, have largely stalled because Big Pharma isn’t as willing to invest money in less-profitable ventures.

While companies should obviously make some kind of profit from their products, HCAN points out that Big Pharma’s prices far exceed what people in other countries are paying for the exact same drugs. The United States’ per capita drug spending is about 40 percent higher than in Canada’s, 75 percent higher than Japan’s, and nearly three times higher than Denmark’s.

On Monday, India’s Supreme Court rejected a patent application by pharmaceutical giant Novartis for Veenat, a generic version of the company’s top-selling cancer treatment drug Gleevec. As the New York Times reports, public health advocates cheered the decision as a major victory for the country’s low-income population, as continued access to the affordable generic could save millions of lives. But the underlying differences in how intellectual patents function in India versus the U.S. also reveals a major source of Americans’ inflated prescription drug costs.

India, which exports $10 billion worth of generic medications every year, didn’t pass a robust intellectual property patent law until 2005. This law allowed for patents on medications discovered after 1995. At first glance, that would appear to qualify Novartis to pursue a patent on Veenat. But as the Times explains, the Indian justices concluded that an older, patented Gleevec version was too similar to the post-1995 version to qualify the later iteration as a “new” drug — a heightened standard of scrutiny that the U.S. does not share:

In 1993, Novartis patented a version of Gleevec that it later abandoned in development, but the Indian judges ruled that the early and later versions were not different enough for the later one to merit a separate patent. [...]

Anand Grover, a lawyer who argued the case on behalf of Cancer Patients Aid Association in India, said the ruling had a sweeping effect since it confirmed that India has a very high bar for approving patents on medicines.

“What is happening in the United States is that a lot of money is being wasted on new forms of old drugs,” Mr. Grover said. Because of Monday’s ruling, “that will not happen in India.”

Indeed, the vast majority of drug patents given in the United States are for tiny changes that often provide patients few meaningful benefits but allow drug companies to continue charging high prices for years beyond the original patent life.

In a classic example, AstraZeneca extended for years its franchise around the huge-selling heartburn pill, Prilosec, by performing a bit of chemical wizardry and renaming the medicine Nexium. Amgen has won so many patents on its hugely expensive erythropoietin-stimulating drugs that the company has maintained exclusive sales rights for 24 years, double the usual period.

This culture of Big Pharma companies reauthorizing U.S. drug patents by instituting negligible changes to the “inactive ingredients” in their products perpetuates high costs for both the American people and public insurance plans that must subsidize the price of expensive, brand name drugs. Pharmaceutical companies’ ability to extend their intellectual property protection (IPP) is a consequence of a series of laws that were passed beginning in the 1980s. While these laws were meant to encourage drug innovation, they have also had the adverse effect of extending patents on certain drugs’ active ingredients to as many as 20 years, as this data compiled in a National Institute for Health Care Management (NIHCM) Foundation report shows:

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According to a new Consumer Reports investigative study published Thursday, there is rampant variation in the price of generic drugs as large U.S. pharmacy chains — including CVS, Rite Aid, and Target — mark up the prices of generic drug versions for common medications by as much as 18 times what wholesale chains like Costco charge. That price variance ends up costing Americans, who spend an average of $758 out-of-pocket on drugs every year, hundreds of dollars in unnecessary spending each month.

Consumer Reports compiled the data by contacting hundred of pharmacies throughout the country and asking what their drug prices were for generic versions of Lipitor, Plavix, Actos, and other common medications. The results were striking, with pharmacy representatives claiming that the higher prices were necessary for covering overhead, and considering that selling medication constitutes most of their revenue and profit margins:

Costco was the least expensive overall, and you don’t need to be a member to use its pharmacy. A few independent pharmacies came in even cheaper, though their prices varied widely, as did grocery-store pharmacies. The online retailers Healthwarehouse.com and FamilyMeds.com also had very low prices. On the other end of the spectrum, CVS, Rite Aid, and Target had the highest retail prices. [...]

A representative of CVS told us that its retail drug prices reflect other services offered by the chain, including drive-through windows, automated prescription refill systems, free outreach programs to help make sure patients are taking their prescriptions correctly, and 24-hour pharmacies. Costco pharmacies, the cheapest overall, are open only from 10 a.m. to 7 or 8:30 p.m. and are typically closed on Sundays.

“Big-box stores such as Costco and Walmart use the pharmacy as a traffic builder for their stores, whereas traditional chain stores, such as CVS, Rite Aid, and Walgreens, make the majority of their revenue and profits from the pharmacy,” says Stephen W. Schondelmeyer, Ph.D., Pharm.D., a professor of pharmacy economics at the University of Minnesota.

The study’s full findings are illustrated in this chart:

The use of generic drugs — rather than their brand name counterparts — actually drives down spending on medications, consequently lowering Americans’ out-of-pocket costs and government spending on public insurance programs such as Medicare and Medicaid. But the Consumer Reports investigation suggests there are significantly more savings to be had.

This isn’t the first time generic drug makers have been in the news this week. On Monday, the Supreme Court took up Federal Trade Commission (FTC) v. Actavis — which one expert dubbed “the health care reform case of 2013″ — a case centering on the legality and antitrust implications of so-called “pay for delay” arrangements in which brand name drug makers pay off their generic drug counterparts to delay a drug’s generic version from entry into the market. If the FTC winds up winning that case, it could save Americans and the government billions of dollars on drug costs every year. But as this new report demonstrates, they could save much more if pharmacies stopped jacking up their rates to startling degrees.

In addition to the high-profile cases on marriage equality that are slated for consideration this week, another crucial legal battle that begins on Monday could have huge implications for the future of the health care industry. Federal Trade Commission (FTC) v. Actavis could save consumers and the government hundreds of billions of dollars in health care spending, prompting one plaintiff to dub it “the health care reform case of 2013.”

The case centers on the widespread and arguably collusive practice of “reverse payment” settlements — commonly referred to as “pay for delay” — between brand name drug manufacturers and their cheaper generic drug counterparts. Such arrangements involve brand name drug makers paying off generic manufacturers to delay a generic drug’s release into the market, allowing the brand name producers to further profit off of their significantly more expensive drugs:

Congress saw the difference that generic drugs could make in health care spending when in 1984 it passed the Drug Price Competition and Patent Term Restoration Act, also known as the Hatch-Waxman Act.

That law, together with amendments passed roughly 20 years later, encouraged generic drug makers to challenge the patents protecting lucrative brand-name drugs.

But a loophole in the law has turned the theory of patent infringement on its head, allowing a brand-name company to pay the generic drug maker to keep its low-price version off the market for a given number of years. That is the opposite of how a patent-infringement case is usually settled, with the generic infringer paying the brand-name patent holder. Thus, the deals are known as “reverse payment” settlements.

These schemes cost American consumers as much as $3.5 billion every year by delaying access to relatively cheap generic drugs and keeping prescription drug costs unnecessarily high, despite recent drops in drug spending driven by the greater use of generics. In fact, brand name drugs only constituted “18 percent of the total prescriptions written by doctors in 2011 but 73 percent of consumer spending,” and Big Pharma companies use the massive profit margins produced by that dynamic to effectively silence their competitors by offering a deal that’s too good to refuse. Brand name and generic drug makers — who both have plenty to gain financially through the shoddy arrangements — argue that such deals are actually beneficial for the consumer, as expensive patent lawsuits between the two industries could end up delaying a generic drug’s release even further.

But that argument is a smokescreen that ignores Congress’ original intent in passing the Drug Price Competition Act. It is an unintended consequence — as confirmed by none other than bill author Rep. Henry Waxman (D-CA) himself. In an amicus brief filed with the Court urging the justices to side with the FTC, Waxman wrote, “The Hatch-Waxman Amendments’ intention was to promote competition by generic drug manufacturers. The possibility of agreements such as those involved in this case is an unintended consequence of the legislation. Hatch-Waxman was never intended to foster such agreements, still less to render the antitrust laws’ prohibition of anticompetitive agreements among competitors inapplicable to agreements allowing generic manufacturers to exact a potion of a brand-name manufacturer’s monopoly profits in return for withholding entry into the market.”

Prominent global health groups — the World Health Organization (WHO) and the Global Fund to Fight AIDS, TB and Malaria — are warning that they need “significant funding” to combat the deadly strains of drug-resistant tuberculosis (TB) that are spreading around the world.

In a joint statement, the two agencies explained that global health experts “urgently” need another $1.6 billion in annual support to help them track down and treat resistant forms of tuberculosis in developing nations, where millions of people still fall ill from TB every year:

“We are treading water at a time when we desperately need to scale up our response to multi drug-resistant TB,” said Margaret Chan, the WHO’s director general.

TB is often seen as a disease of the past — but the emergence of strains that can not be treated by various drugs has turned it into one of the world’s most pressing health problems over the past decade. Of all infectious diseases, only HIV (the human immunodeficiency virus that causes AIDS) kills more people.

In 2011, 8.7 million people fell ill with TB and 1.4 million died of the disease. The WHO says as many as 2 million people may be suffering from drug-resistant strains by 2015. [...]

The WHO and the Global Fund said they had found an anticipated gap of $1.6 billion in annual international support for the fight against TB in 118 low and middle income countries. If this gap were filled, it could mean 17 million patients with TB and multi drug-resistant TB could be fully treated, saving about 6 million lives between 2014 and 2016, they said.

Treating TB is already complicated and costly, since patients need to take a cocktail of several antibiotics for a six-month period. Many patients don’t complete the full six-month treatment course — which has fueled the rise of deadly TB strains that are resistant to the drugs typically used against it, since the improper administration of antibiotics can render them less effective.

The WHO and its partner health agencies also recommended an additional $1.3 billion in funding to bolster TB research and encourage the development of new vaccines that will be more effective against the bacterial infection. Since it’s less profitable for the pharmaceutical industry to invest in developing new drugs, scientific innovation in this area often lags behind. But there’s still much work to be done when it comes to researching new TB treatments. Last month, a highly-anticipated TB vaccine trial, which scientists hoped could signal promise for the first new tuberculosis vaccine in 90 years, failed to achieve its desired results.

Unfortunately, tuberculosis isn’t the only global health threat of its kind. The treatments for common infections like gonorrhea, E. coli, and penicillin are also losing their effectiveness — and since new drugs aren’t being developed quickly enough to replace them, public health experts warn that an impending “antibiotic apocalypse” could eventually make them incurable.

A new report by Express Scripts Holding Co. finds that, while the total costs of U.S. drug payments rose slightly last year, 2012 was the first time in two decades that spending on drug treatments for common ailments such as high cholesterol and diabetes declined. That drop is largely due to Americans’ increasing use of generic — rather than brand name — medications to treat the conditions.

As Reuters reports, brand name companies have the freedom to charge higher rates on their prescription drugs for a set period of time before their patents lapse into the public domain, allowing expanded use of less costly generic drugs — a practice that is also encouraged by Obamacare:

The lower prices for common drugs came after the patents on branded versions ran out, putting cheaper generic competitors onto the market. Big pharmaceutical companies like Pfizer Inc and Merck & Co hold the patents on drugs for about a decade after they start selling them. Then competitors like Teva Pharmaceuticals Ltd can start selling their own generic versions.

President Barack Obama’s healthcare overhaul law rewards the use of generic drugs as a way to decrease healthcare spending, which rose about 4 percent last year and accounts for about 17 percent of gross domestic product.

The patent for Pfizer’s Lipitor, a cholesterol treatment that was once the world’s best-selling drug, expired in November 2011. Cheaper generics hit the market soon after, which sharply reduced spending on treatments in 2012.

“The move towards lower-cost generic alternatives has had a tremendous impact,” said Sharon Frazee, vice president research and analytics at Express Scripts.

Falling drug prices can have a tangible impact on Americans’ treatments for obesity-related illnesses that take a particularly large toll on the nation’s health. For example, the cost of high cholesterol medication fell by 10 percent for a 30-day supply — which quickly adds up for Americans who have chronic conditions like excess cholesterol and diabetes.

But Americans are denied the full benefits of falling generic drug prices due to the abundance of so-called “pay-for-delay” schemes between brand name and generic drug companies — when brand name drug companies pay off generic drug manufacturers in exchange for their consent to delay the release of a drug’s generic version into the market, a method of maximizing the brand name drug’s profitability. The Supreme Court is set to take up a case — Federal Trade Commission v. Watson Pharmaceuticals — to determine whether or not such schemes violate consumer protections and antitrust laws.

And the outcome of that decision could have a significant impact on U.S. health care expenditures. Considering the fact that the new report found the overall increase in national drug spending was driven by the high costs of specialty drugs for arthritis, cancer, and hepatitis C, which “accounted for 24.5 percent of the nation’s total spending on prescription drugs,” encouraging the production of generic prescription drugs could go a long way towards lowering health care costs.

Health care settings like hospitals and nursing homes need to make preparations to prevent the spread of a rare “superbug,” the CDC is warning. There’s recently been a sharp jump in the number of reports of the potentially deadly bacteria, which is resistant to all last-resort antibiotic treatments — and the CDC is prompting health officials to act now to contain a future outbreak of the superbug:

Reports of unusual forms of CRE have nearly doubled in the U.S., the Centers for Disease Control and Prevention reported this month. Of 37 cases of rare forms of CRE, including the alarming NDM — New Delhi metallo-beta-lactamase — 15 have been reported since last July.

“This increase highlights the need for U.S. health care providers to act aggressively to prevent the emergence and spread of these unusual CRE organisms,” the CDC said in a health advisory.

CREs are part of a family of drug-resistant germs that have shown up in growing numbers of U.S. health care settings. They’re named for their ability to elude carbapenem antibiotics, the big guns in the medical arsenal. They usually strike people who are already ill and require devices such as ventilators or catheters or who have been taking antibiotics for a long time. But they can infect any patient.

The CDC is calling for stricter precautions in health care settings, including increasing screening of patients and immediate isolation of patients who may be at risk for spreading the bacteria. “Our main objective is to slow or stop the spread in places where we can identify them,” Dr. Alex Kallen, an outbreak response coordinator for the CDC, told NBC News. “Right now, the therapeutic options are very limited.”

Health officials have been concerned about CRE superbugs for the past decade, particularly after an outbreak near Washington, DC killed seven people last summer. CRE infections are especially serious public health threats because they have a mortality rate of up to 40 percent, much higher than other infections — and people who are carrying the CRE bacteria may not display symptoms for up to a year, which means they could unknowingly pass the infection to countless people they come into contact with.

The CDC is attempting to raise public awareness about the superbug, as well as bring the issue to the forefront of health providers’ minds. But the CRE superbug may be just the tip of the iceberg when it comes to the rise of antibiotic-resistant diseases. As vaccine development has slowed over the last several decades — partly due to the fact that developing new antibiotics isn’t as profitable for Big Pharma — medical experts have begun to see a rise in drug-resistant bacteria, and warn that an impending “antibiotic apocalypse” could soon make even common infections deadly.

A breakthrough in cancer treatment could potentially have a big impact on women who are battling advanced stages of breast cancer. The New York Times reports that the Food and Drug Administration (FDA) has approved a new drug that, when used in conjunction with the popular breast cancer treatment drug Herceptin, will more effectively kill cancerous cells and appreciably extend late-stage metastatic breast cancer patients’ life expectancy while possibly alleviating some of the chemotherapy’s more debilitating side-effects:

The main clinical trial leading to approval of Kadcyla involved 991 patients with metastatic breast cancer that was worsening despite treatment with Herceptin and a taxane chemotherapy drug, like paclitaxel. Half the women were given infusions of Kadcyla and the other half took two pills now commonly used for such patients: Tykerb, also known as lapatinib, and Xeloda, also known as capecitabine.

The patients getting Kadcyla lived a median of 30.9 months, compared with 25.1 months for those getting the two pills. The median time before the disease worsened was 9.6 months for those getting Kadcyla, compared with 6.4 months for those getting the other drugs.

While having greater efficacy, Kadcyla also had fewer side effects. About 43 percent of patients on Kadcyla had serious side effects compared with 59 percent of those getting the two pills.

Kadcya is a first-of-its-kind drug for Americans suffering from more advanced and aggressive breast cancers, and holds great potential for increasing patients’ longevity and reducing suffering. But the drug is likely to cause considerable sticker shock, as “it would cost about $9,800 a month, or $94,000 for a typical course of treatment” — twice the amount of money that treating advanced breast cancer with Herceptin alone would cost.

The fact that Kadcya is so expensive underscores the importance of early testing and prevention efforts, hopefully before diseases worsen and health care costs spiral out of control. The exorbitant cost of American medical care — including staggering fees for everything from simple blood work, to drugs, and to more advanced procedures — makes preventative care more important than ever.

But engaging in that sort of forward-thinking and preventative care is particularly difficult in the face of conservative lawmakers’ war on women’s care facilities such as Planned Parenthood, which is one of the main resources for breast and cervical cancer screenings — particularly for low-income women. While Obamacare mandates that mammograms and similar preventative screenings be provided free of charge, American women may have a difficult time finding adequate resources for such services in the absence of adequate facilities providing them.

This week’s issue of Time Magazine takes a deep dive into Americans’ medical bills and the roots of the U.S. health care industry’s rampant inflation — costs that force one in four American seniors into bankruptcy and over one in three Americans to forgo care.

The investigative piece highlights the exorbitant costs of the most commonplace procedures and medications, and how insurance coverage often falls through for Americans who encounter unaffordable out-of-pocket costs due to the rising price of health care technology and services. Furthermore, it is often impossible for patients to ascertain why they are being charged what they are for care — a pricing opacity that is truly unique to the service-centered health care industry. Here are the three biggest takeaways from the Time exposé on the unsustainable foundations of American health care costs — and some ideas for shifting the U.S. medical landscape towards a more equitable system:

Even though Obamacare’s birth control rule helps expand access to affordable contraception, ongoing right-wing attacks on reproductive services still threaten to prevent women from accessing the birth control they need. Particularly since the U.S. still uses an outdated system of tying birth control prescriptions to annual check-ups — rather than joining most other countries around the world and making contraception available over the counter — some women run into roadblocks as they attempt to fill their prescriptions. But some Democratic lawmakers are hoping to change that with new legislation aimed at standardizing pharmacies’ procedures for dispensing birth control.

Sen. Frank R. Lautenberg (D-NJ) and Rep. Carolyn Maloney (D-NY) are spearheading the “Access to Birth Control (ABC) Act,” the same bill they have attempted to get through previous legislative sessions. The politicians reintroduced their measure on Thursday, explaining that they hope to strengthen the birth control provision in the health care reform law by ensuring that pharmacists cannot obstruct women’s access to contraception:

“This legislation would prevent a pharmacy from interfering in the personal medical decisions made by a patient and her doctor,” Sen. Lautenberg said. “Birth control is basic health care for women and Obamacare has removed financial hurdles for millions of women; we can’t allow other obstacles to be placed in their way. By guaranteeing that women can access birth control at every pharmacy in the country, we can ensure that women are never denied the right to make responsible decisions about their reproductive health.” [...]

The Access to Birth Control (ABC) Act strikes a balance between the rights of individual pharmacists who might have personal objections to contraception and the rights of women to receive their medication. The bill protects the right of individual pharmacists to refuse to fill a prescription, but also ensures that pharmacies will fill all prescriptions, even if a different pharmacist has to do it. In addition, if the requested product is not in stock, but the pharmacy stocks other forms of contraception, the bill mandates that the pharmacy help the woman obtain the medication without delay by the method of her preference: order, referral, or a transferred prescription.

Some pharmacies have recently taken it upon themselves to update their contraception policies to ensure their employees won’t let their own attitudes about birth control prevent them from fulfilling their jobs. But, considering the fact that the National Women’s Law Center has tracked issues with pharmacists refusing to fill birth control prescriptions in at least 24 states across the country, the industry’s self-regulation isn’t enough.

Just seven states currently mandate that pharmacies must fill women’s birth control prescriptions — and on the other hand, some states like Kansas and Illinois actually allow pharmacists to deny contraception from women simply because of their own personal beliefs. The ABC Act would implement a national policy across all states to ensure that, in pharmacies ranging from national chains to local mom-and-pop stores, women will never have to worry about getting the reproductive services they need when they need them.