Today is the second class in our new four class set. We will begin class with a casual conversation. Our reading material this week is about a Japanese business. Our listening material is about prescription drugs in America.
Click HERE for the reading
AUDIE CORNISH, HOST:
High drug prices are a favorite topic among politicians from all parties.
(SOUNDBITE OF MONTAGE)
PRESIDENT DONALD TRUMP: Prescription drug prices are out of control.
BERNIE SANDERS: Why do drug companies charge so much?
ELIZABETH WARREN: The high cost of prescription drugs is a huge problem.
UNIDENTIFIED PERSON: The common-sense things necessary to drive down the cost of drugs.
CORNISH: And a new lawsuit alleges prices of generic drugs are higher than they should be because of an industry-wide conspiracy to fix prices. NPR's Selena Simmons-Duffin is here to explain. Welcome to the studio.
SELENA SIMMONS-DUFFIN, BYLINE: Thank you.
CORNISH: What does this lawsuit say?
SIMMONS-DUFFIN: It's a whopper. More than 40 states are suing 20 companies. The suit is over 500 pages long. It was filed on Friday in the U.S. District Court in Connecticut. And that state's attorney general, William Tong, held a press conference today and gave a little personal anecdote.
(SOUNDBITE OF PRESS CONFERENCE)
WILLIAM TONG: I have a little rosacea. And so I take Doxycycline, which a lot of people take every day. And I take one pill every day of Doxycycline. "60 Minutes" reported that over a one or two-year period, Doxycycline shot up 8,000%.
SIMMONS-DUFFIN: So the suit says this type of price jump was coordinated across competing manufacturers. So sometimes one company would decide to raise prices on a particular drug, and then the other companies would follow suit. And other times, one company was allowed to take a certain share of the market. So the suit alleges this type of thing has been happening for years and that companies would avoid creating evidence by making agreements on golf outings or a girls' night out or sending text messages.
CORNISH: So what evidence do they have then?
SIMMONS-DUFFIN: Well, the suit describes several cooperating witnesses that were involved in the price fixing. And then there are text message exchanges and phone call logs. So as an example from previous filing - Nystatin, which is an antifungal tube of medication - it's been around since 1954. And there were three main drugmakers. And then the lawsuit alleges that executives began calling each other in 2013 and 2014. And so a tube of Nystatin was available in 2011 for $9.15, and in 2014, it cost $103.88.
CORNISH: Have consumers been seeing these price jumps at the pharmacy?
SIMMONS-DUFFIN: It kind of depends. If you don't have insurance, you're definitely going to see the price jump because you're paying everything. But Stacie Dusetzina, who's a professor at Vanderbilt who studies drug pricing, says that even with insurance, people can feel the impact.
STACIE DUSETZINA: More people than ever before are paying based on the price of the drug. So that means that they're paying a deductible where they pay for price until they reach a certain level of spending, or they pay a percentage of the drug's price. We call that a coinsurance.
SIMMONS-DUFFIN: But even if you only pay a copay, like $5 for every prescription, if your insurance company is paying more for prescription drugs, they're going to pass those costs on with higher premiums. So she says that what this lawsuit alleges is really disappointing, that consumers put up with the high price of branded drugs because of the promise that a generic is coming and it's going to bring the price down.
But that doesn't happen automatically. It relies on competition and market forces. And she says if there's only one generic, that drug maker can put the price at pretty much the same as the brand name. And you really need more companies in the market to see those prices go down.
CORNISH: What do drug makers say about all this?
SIMMONS-DUFFIN: The main one in the suit is Teva, which is an Israeli company. A Teva spokesperson sent me a statement that they're reviewing the allegations internally and that the company, quote, "has not engaged in any conduct that would lead to civil or criminal liability." The company has also said basically there's nothing new here.
It's true that this is similar to past lawsuits, although this is very thorough. And the Connecticut attorney general, William Tong, has emphasized that the investigation is ongoing. And given the amount of political appetite there is to bring prices down, there are more lawsuits to come.
CORNISH: That's NPR's Selena Simmons-Duffin. Thanks for your reporting.
SIMMONS-DUFFIN: Thank you.