Much of the outrage targeting pharmaceutical companies over the past year has been focused on what many view to be the ugly side of free markets.
As a result, many consumer advocates have pushed for the government to impose greater restrictions on the drug industry to prevent rapacious actors such as Martin Shkreli from putting profit over people.
But a new report from Harvard claims that it's government policies that protect and accommodate pharmaceutical companies that has led to such high prices.
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The study, published in JAMA, points a finger at the 20-year patents that drugmakers are granted by the government when they develop a new medicine.
The policy is intended to encourage research and innovation and allow the company to recoup the costs of the millions or billions of dollars it spent developing the drug, but companies have often convinced the government into extending the patent well beyond the original timeline.
Pharmaceutical companies will make innocuous changes to their meds, including changing the coating, to convince regulators to grant them a new patent.
In other instances, they simply pay off generic drugmakers that have standing to sue them over their monopoly. The impact of that tactic is dramatic, finds the study. The first generic alternative that emerges on the market typically costs just over half of that of the brand name drug. When there are five generic alternatives, the average price declines to only a third of that.
The Food and Drug Administration is also apparently so overwhelmed by drug applications that it often takes years for generic drugs to be approved to sell.
But another problem that is more familiar in political discussions is the fact that major government health programs do not negotiate drug prices with pharmaceutical companies and generally do not refuse to cover certain drugs, guaranteeing a revenue stream to pharmaceutical companies.
In other countries with single-payer health programs, the government does not expect to pay whatever the pharmaceutical company demands. It negotiates the price and will refuse to cover certain medications it considers unnecessary or too expensive.
The fact that the study was published in JAMA, the journal of the American Medical Association, the nation's largest physician organization, is significant, notes Kaiser Health News. It signals an increasing willingness among doctors to consider the costs of drugs they prescribe to their patients.
Indeed, in the past year the American College of Physicians officially endorsed prescribing generics whenever possible, and another study showed that doctors are increasingly unwilling to engage with pharmaceutical sales representatives.
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