Why Prescription Drugs Cost So Much | Michael Rea | TEDxKC

Why Prescription Drugs Cost So Much | Michael Rea | TEDxKC


Translator: Ivana Krivokuća
Reviewer: Ellen Maloney Has your life ever been changed
by one question? Maybe it was, “Will you marry me?”
or “Do you want the job?” For me, working as a pharmacist eight years ago, that question came from a sick,
elderly woman named Betty. She asked, “Which two of my eight
prescriptions can I skip this month?” I became a pharmacist to help people, so when I confess to you that I didn’t get
why she was asking me this question, I still feel naive. I knew that she was diabetic, with high blood pressure
and high cholesterol. So I asked her why she would
endanger her life by skipping any of her medications. We all know why she would do that;
she couldn’t afford them. Did you know that 30 percent
of prescriptions written are never filled? The reason for that is nearly always cost. Prescription drug prices are rising
more than four times faster than wages in this country. I know, because I’ve spent
the last eight years of my life hacking the system, turning it upside down and trying to shake money
out of its pockets for consumers. And the reason I do that, instead
of dispensing drugs as I used to do, is because of Betty. Betty left my pharmacy that day
with enough medication to get by, and I spent that night
researching her problem. Six hours later, I had some answers, but my research had raised
many more serious questions. How is it that the two people
in the best position to help the patient, – the prescriber and the pharmacist – have so little power to do so? Is the system rigged,
deliberately complex and opaque? Trying to solve Betty’s problem
was like trying to solve a Rubik’s cube, when you can only look
at one of its sides. I was sure her doctor
would be as surprised as I was to learn that the cost
of an oral blood pressure medication that could be used to treat her condition could range in price from as low as four dollars
a month on one end, to on the high end
more than 577 dollars a month. Other variables combine to present more
than 100,000 different potential outcomes at the pharmacies near her home. I’ve seen mothers coming
to the pharmacy so relieved, finally having gotten the diagnosis
for a problem with the sick child, only to find out that they can’t afford
the prescribed medication. People’s lives can be transformed by getting the right medication
at the right time. And the difference between them
isn’t just economic status; it’s often just luck. One family prescribed
an affordable drug, one family not. And with no clear way
on how to get better information, a better shake from the system. We live in a world
where institutional capital can wield information like a weapon. Remember a few years ago,
when The Wall Street Journal reported that Orbitz was caught steering
its users to price your hotel rooms if they booked using a Mac
rather than a PC? They assumed that Mac users
weren’t as price sensitive and they used that information
to target them. But more than bad profits
in the healthcare system, I just see a lack of innovation. Why is it that we can book travel
to any city in the world, find every flight and price
in a matter of seconds, but we can’t just as quickly and easily
compare options and prices for managing a medical condition? For example, a few months ago,
I had a rash on my arm, and my doctor prescribed a generic cream
that had two active ingredients in it. Shortly after he electronically sent
that prescription to the pharmacy, my phone buzzed
with a text message telling me that it was going to cost me 103 dollars, which seemed way too high to me. Now, what if I’ve received
a second notification, letting me know that these two creams with the exact same
ingredients sold separately could be purchased for six dollars, and if I apply the two creams
the same way, I get the same result, and I’d save 94 percent of my money? But we’ve set up this system
like a hardware store, where you could buy a bolt for a dollar
and a nut for a dollar, but then somebody packages
the nut and the bolt together, and now the price is 50 dollars. And you can’t find that old
dollar display anywhere. If we flip back to the travel
analogy for a moment, when booking a flight from say,
Kansas City to New York, there are many routes
that you can choose from. You can fly direct;
you can stop in Chicago, or Atlanta, or Cincinnati; you can even fly west,
clear around the globe to New York City. You can pay more or less
for things like business class, exit rows, or seats with varying legroom. Similarly, how you make
your pharmaceutical journey from illness to wellness
should be your choice. And you should be able
to see your options quickly and clearly. It shouldn’t take you six hours, like it did the first time
I went looking for answers. Betty, by the way, followed
through on my suggestions, went through them all with her doctor,
and came back to tell me that she could afford
all of her medications. She would now be able to save more
than 3000 dollars a year on her medicines. She no longer had to choose
between paying rent and buying her medications. Her life changed, and my life changed. Having seen that it could be done, I saw an opportunity to help
so many others with the same problem. Ending the unsustainable rise
in prescription drug cost requires turning patients
from passive consumers into active, informed participants. It means giving people
like Betty the power to see all of their medication options and the associated prices in seconds, without ever stepping foot in a pharmacy. It’s why I was inspired to start a company
dedicated to serving this need. Today, people in all 50 states
are saving money using this software. The research I did for Betty
over a six-hour period now happens in a tenth of a second. And it works. Using our tools, Berkshire Hathaway Media Group
reduced their pharmacy spend despite record levels
of drug price increases nationally. The company and its 5000
health plan members save more than 515,000 dollars
in the first 18 months of use. And while some may focus
on just the institutional savings, I think about one of our members, a mother of a fifth grader
who wrote and told me about the day she was finally able
to afford the medication prescribed to treat her child’s ADHD. She shared her story, that they were able to celebrate
a positive report card that just a few months before
had seemed impossible. Like this mother, with access to the right information
at the right time, our healthcare system can be simpler,
cheaper, and more effective. It should be. It needs to be. And I’m going to stay mad
that it’s not until it is. Thank you. (Applause)

39 Comments

  1. onlythewise1 says:

    evil= greed

  2. onlythewise1 says:

    Obama failed you all ,  and the people are failing themselves , people need to work togather your all smart enough for that

  3. Amanda Walker says:

    Insulin has gone from $60 a bottle to $325 in the U.S…

  4. M.C Mole says:

    only 6000 views?

  5. MyLittleHecarim says:

    i see me

  6. LordTimCahill says:

    homeboy had a good talk until he mentioned how he crusaded to help a mother put her kid on speed (adhd meds).

  7. Jonie Isenberg says:

    You can thank the Pharmaceutical Benefit Managers for for these prices. Their profits have increased 1001% since 1987. They started out helping people, then realized they could get rich without doing anything at all. Just dom't pass along the discounts to the pharmacy and the customer. They keep the discounts and rebates and make their annual multi-million dollar salaries easier to achieve. Ask any Congressman.

  8. Godson - Gaming says:

    Inflation for drugs and people choose to continue living unhealthy and eating junk food

  9. Briggs Hightower says:

    This really didn't get much at why the costs of drugs were so high? I mean yeah it talked about the different cost variations on the same drug, but it didn't go in depth into why they are priced that way to begin with.

  10. Angel Salinas says:

    All the these politicians and news stations are all owned be Big drug companies. So sad, that not even the current generation don't care enough to change the current situations. They also have cures for diseases that they have but they prefer to give a pill that you need for the rest for your life. Wake of People!!!!!!!!!! or be a victim of there big Parma greed. In Cuba, there drugs a dirt cheap and they are communism!! WTF.

  11. Kenneth G says:

    He never answered the question!?

  12. John Dow says:

    Smoke some weed is a real pain killer. Proweed

  13. John Dow says:

    Comes a point when u say fuckem and do what is best for u if u want to live. If I have to hav it a live ill take it by force if need be.

  14. Larry Wolf says:

    The simple fact of the matter is, pharmaceutical companies excessively gouge for all their medicines at a ridiculous rate and they buy out the government so it doesn't interfere. We know this for a fact, because when governments don't play ball with them and actually fight for their citizens' health, we see a price drop in almost every drug by almost as much as 99% in most cases.

    Things that cost in the hundreds and thousands in America and Canada? $5.00 in New Zealand and most of Europe.

    While this guy's service no doubt finds the cheapest drugs around, it doesn't change the fact that almost every single one the drugs he was talking about in this talk is ridiculously overpriced anyways and WE ARE ALL BEING GOUGED. People are DYING for shareholder profits and our governments are being BRIBED.

  15. 4wheelerDJ says:

    How much of the 30% unfilled prescriptions are for mental illness meds??

  16. Jonie Isenberg says:

    SHOULDN'T ALEX AZURE HAVE AN ANSWERS BY NOW? ARE YOU A Pharmaceutical Benefit Manager?

  17. ohmusicsweetmusic says:

    Ah TedeX once again refusing to speak against anything always perpetuating the status quo….

  18. OhSun Kang says:

    Prices for products only drop significantly when the consumer actually deals with them.

  19. bhoumik4 says:

    FDA regulations also add a lot to cost of drug production. Therefore, companies are forced to price drugs very highly.

  20. Melody Liu says:

    My left ear enjoyed the beeping halfway through the talk.

  21. Lil Plum says:

    My penicillin was 0.30

  22. Joydeep Burman says:

    Your mission is an extremely noble one

  23. Commando303X says:

    A terrible video: Sentimentalistic statement of a problem, as a prelude to an advertisement.

  24. Angie M says:

    what is the name of the app?

  25. RawhideProductions1 says:

    Always shake my head when people say its profits. Profits on pharma are in the 15% range in good years. That means my $500 medication would only cost…..drum roll…$455.

  26. RawhideProductions1 says:

    The huge deductibles on insurance plans since Obamacare passed are actually having an unintended good consequence. Patients are now acting more like consumers and making such choices as if they are shopping for flat panel TVs. Hospital companies are struggling to meet the downward pressure in prices as a result. They've never experienced people asking what an MRI will cost and how the clinic across town will do it for $100 less. They will adapt though and just like the computer and cell phone models, price will go down and quality will go up.

  27. Joan Sudec says:

    This is an advertisement. Don't be fooled by the headline.

  28. Vikas Luthra says:

    You call India corrupt this is hight of corruption

  29. Kyn Chan says:

    But most prescription drugs need testing phase 1 – animals, phase 2 – small cohort sick people, phase 3 – healthy people, phase 4 – large cohort of sick people. As the phases increase the cost of testing rises exponentially. If a drug fails phase 4 then it is very bad for the company – costs go into the hundreds of millions of dollars. Drugs to treat whatever condition may have to come back to the drawing board many times over eg failing at phase 1. The average drug takes about 10 years to get approval from the regulating body (eg FDA) from 1st development, phases, back to drawing board, back to phases for instance.

    A generic drug maker does not need to do any of the phase testing. They find a polymorph of the drug, that the original maker has already completely tested, but not patented and sell it, thereby avoiding hundreds of millions of dollars in testing and all that time delay. (Polymorph is a different crystalline form of a chemical eg many different shapes of snowflake but it is still water. A company is unlikely to have patented every different crystalline form of their drug – could be thousands of different crystalline forms. The generics company only needs to find one unprotected one, patent it, manufacture and sell at a fraction of the price.)

    There should be laws that force the generic drug makers to pay for part of the testing or a large portion of their profits goes towards the tester.

    If generic just copy there is no profit left for the drug tester. Who wants to do the testing at all? But without it a drug can't be legally sold.

  30. Chetna Patel says:

    Is there any medicine to remove human microchip from inside the head

  31. 2000Betelgeuse says:

    He doesn’t really offer anything just sad stories

  32. T Mox says:

    My husband is a scientist who has worked for four different pharmaceutical companies. The price has to cover R&D. We have to pay for the failures – which is 90% of drug research. This does not mean that the price hiking is justifiable. Any drug company ceo who is rich is doing it wrong.

  33. Jeffrey Rivers says:

    Only reason meditation costs SO much is the insurance and big pharma are in bed with each other…. they are both inflated prices that steal from us at both ends!

  34. Michael k says:

    They never tell you why other countries pay so much less for the same drugs

  35. John Smith says:

    I wonder what happened to all those herbalist that created natural cures and medicine??? supposedly they committed suicide. Damn murderers!!

  36. Ava Martinez says:

    How sad some people gave this a thumbs down.

  37. Keith Moore says:

    If objectivity is maintained then it is clear that drug discovery is inherently expensive and so costs are inherently high. It is also clear the US health system vs other countries is also inherently inefficient with various intermediaries taking a cut and adding to prices (not costs, these are different). This is true across the US healthcare sector, of which drugs is only a small part compared to hospitals, diagnostics, doctors salaries etc. These are the facts. The point of debate is more emotive and subjective — should Apple be able to charge market rate for an iPhone but the Pharma companies not for life saving drugs? Should food companies charge market rates for life giving food? Or clean water? Or housing? Or education? Rhetorically, should everything "essential" not then be free? If so, who pays? Is this then communism or capitalism? So, let's separate objective fact from subjective opinion.

  38. Jonah Benson says:

    This said nothing about why cost is high

  39. Jamie Leeper says:

    A company on an incredible mission to change the lives of millions of Americans who face financial failure due to out of control medication prices. Keep an eye on this development in the coming years, lots of even more amazing things to come!

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