Looking for Loopholes... Politicians and Big Pharma - Granite Grok

Looking for Loopholes… Politicians and Big Pharma

Looking for Loopholes

Gene Fowler went to visit W. C. Fields shortly before his death. Upon arriving he found his ailing crony sitting in the garden reading the Holy Bible. What are you doing Fowler asks? “I’m looking for loopholes,” Fields responds… Looking for loopholes.

Politicians on drugs

One of the issues in Senate races this election cycle will be the prescription drug industry. The issue is expensive prescription drug prices. Some say “What we’ve seen is abuse of loopholes and a variety of different behaviors once the initial (drug) patent has expired.”

To that let me ask this: How do we get a loophole? You cannot abuse loopholes unless there are loopholes. You don’t get loopholes unless government creates them in the first place. How do we avoid abusing loopholes? That’s the easy part. We get the government out of the economy. The purpose of government does not include creating loopholes.

We are slow but we do get it

Americans know drug companies are making deals behind closed doors. We understand that our government is corrupt. Abusing the system is how Senators and Congress people raise campaign money. Drug companies and any other company big enough to have money to spend in D.C. to buy privilege get to play the game.

This is not a Big Pharma issue. This is a return the government to the people issue. Sure the legislative branch made a bunch of laws, which on the surface were initially meant to keep drug companies in line. But that’s not what happened then and it certainly isn’t what’s happening today. Today the business model is to pay the politicians for the right to set prices as an oligarchy. The way we fix that is to end the regulation and let competition take over.

The game

Take for example the pay-for-delay patent “settlements” drug companies use to keep cheaper generic drugs off the market. When a pharmaceutical company creates a drug, they get a patent for it that generally lasts about 20 years, but the exact time period can vary.

During that time, no other company can manufacture that drug, including generic drug companies. After the patent expires, other drug manufacturers can make the same drug and usually offer it for a much lower price. This will often drive the price the original drug company can charge for the drug way down, cutting into their profits.

More game

So here’s a common play to keep drug prices high. A pharmaceutical company with a patent goes to a generic drug company with a competing product and no patent. The two agree the patent holder will not create a bunch of expensive legal headaches for the generic companies. In exchange for the agreement to delay putting a generic version of their drug on the market.

The longer the delay of the generic, the longer consumers are forced to pay high prices for the patented prescription drugs. Profits go up as a result. There are more funds to pay for creation of more loopholes. Do you see the relationships here? The politicians make the Loopholes and the Drug companies are looking for loopholes.

The latest attempt to help

The federal government estimates the pay-for-delay scheme costs American consumers $3.5 billion annually Some goes to the pharmaceutical companies and some goes to the politicians who created the loopholes. The happy spot for the politicians is they get to blame the drug companies for abusing the system so you will donate to their reelection campaigns.

Here’s another loophole. Insulin, a drug that the 7.5 million diabetics require. The price of the three most popular insulin products increased 117 percent, 118 percent and 150 percent from 2012 to 2017.  These aren’t new drugs. They have been on the market for almost a century. Is there a reason for their price to increase so dramatically in such a short period of time?


Elections are the time when people should hold their elected officials accountable. Will you demand action? What action will you demand? Your Senator is part of the game with Big Pharma. She’s been at it for over a decade. This actually isn’t a Republican or a Democrat issue. The issue is getting government out of the economy so the companies don’t have to go to D.C. to pay to play in the loophole game.