Ways to make Prescription Drugs more Affordable and Available

We need to consider many different ways to manage Prescription Drug costs and the availability of low-volume and older generic drugs.  There are a number of soon-to-be-formed new Not-for-Profit or Non-Profit Consortium’s that plan on owning, manufacturing and distributing prescription drugs, with the goal being to keep down prices and make older and little used drugs more affordable and more available for hospitals and for people.

However, there are many details that still need to be addressed on how these organizations would operate for the benefit of all.  One possible solution is for them to operate by adopting historical models of Regulated Industries that have limits on their Profitability.  This means that the Government limits their ability to generate Profits or enrich those that operate those Consortium’s.  There are several models that exist today that can adopted; so consideration should be given to adopting a model that is best for the benefit of all.  The other major issue is how these Consortium’s would acquire the Patents and/or Licenses to manufacture and distribute these drugs throughout the Country.   

Alternatively, “new” prescription drugs that are developed using “Public” dollars, either partially or entirely, through funding provided by Non-Profit, Not-for-Profit or Government Grants, should have price limits, as the risk of development is either partially of fully paid by “Public” dollars.  These issues are best handled through Government Regulations.

By choosing an appropriate model, the main result would be more and lower cost drugs available to everyone.  One approach, to address all these major issues, could be for the Government to issue two (2) major regulations, related to drug patents/licenses and to manufacture and distribution.

  • Allow the current patent owners and licensors of the prescription drugs to either donate or license, at no cost, to the new Non-Profit Consortium’s any prescription drug for which they control the rights “in exchange for” an ongoing and reasonable tax deduction/credit that they can use to offset profits from other drugs.
  • Limit the profitability of the Not-for-Profit or Non-Profit Consortium’s, as was historically done in Regulated Industries, to a multiple of the “actual cost of manufacturing” the prescription drug, not including S,G&A expenses (Salary, General and Administrative), or limit the S,G&A expenses to no more than 30% of the manufacturing cost of the drug.