The prominence of high drug prices among current American grievances derives from three recent episodes. In 2014 Gilead Sciences brought out Sovaldi, a drug that cures hepatitis C within twelve weeks but costs $1,000 a pill, making the price of a full course of treatment $84,000. In 2015 Turing Pharmaceuticals, a new company headed by Martin Shkreli, a hedge-fund manager, acquired Daraprim, the sole treatment available in the United States for a life-threatening parasitic infection, and raised the price per tablet from $13.50 to $750. (Shkreli is now serving a prison sentence for fraud unrelated to drug prices.) And in 2016 Mylan Pharmaceuticals, which had a stranglehold on the market for EpiPens (used to counter allergic shock), began selling them wholesale for $284 apiece, a 600 percent increase over the wholesale price in 2007, and offering them only in packages of two.
The three companies appeared to be emblematic of the entire pharmaceutical industry. Between 2008 and 2016, the price of new prescription drugs doubled, and the cost of some older drugs rose many times faster than the annual inflation rate. A significant number of Americans, especially seniors, reportedly could not afford their medications.
…Through much of the nineteenth century, as the historian Joseph Gabriel observes in his immensely informative book Medical Monopoly, drug monopolies were largely blocked by patent law and by an ethical code that both physicians and even a number of drug companies embraced. Monopolies could in principle be obtained through patents, but most medicines then consisted of plants, which, along with their extracts, were considered ineligible for patents because they were made by nature rather than by man. Medicinal fabricators nevertheless packaged and bottled a variety of concoctions composed of minerals, metals, and even plants and sold them in shops as “patent” medicines, although most were not legally patented. They protected their products from competitors by keeping the ingredients secret.
– The New York Review of Books