SOTU Response: The Misconception About the Cost of Prescription Drugs


The following was submitted last week as a letter to the editor:

This week, President Trump delivered his first state of the union address, where he discussed some of his priorities moving forward, including reducing the cost of pharmaceuticals. The President’s remarks perpetuate a misconception that the cost of prescription drugs is set by the pharmaceutical industry and that by reducing or restricting the manufacturers list price, the cost borne by patients will go down.

What patients pay for prescription medications is determined by a complexity of factors, including their healthcare plans, employers, wholesalers, pharmaceutical benefit managers (PBMs) and other variables. With the PBMs, for instance, pharmaceutical manufacturers provide discounts and rebates to reduce list prices on branded drugs. IMS Quintiles estimates these discounts reduce the list price of drugs by $127 billion, but just how much of these discounts are passed on to patients versus held on as profits for the insurance companies and PBMs?

It sounds simple, but policies to control pricing can have unintended consequences, not the least of which is thwarting the vital research and innovations that save lives and manage chronic illness.

It is important to also address the subtext of the President’s remarks, which implies that the pharmaceutical industry cares more about profits than patients. Illinois is home to over 45,000 researchers, doctors, lawyers and business women and men in the biopharma industry who have an unwavering commitment to improving patient lives. And our companies make patient access to life-saving medications a priority. Last year, Illinois-based companies helped over 400,000 patients receive the medication that they needed through their patient assistance programs.

The pharmaceutical and biologic companies are often the bad guy in the story, but without us, there is no story. People forget the years of work, effort and expertise that goes into maintaining good health and good quality of life.  But we don’t. It is our dedication and mission every day. We call on our local elected officials to support policy that expands patient access while improving patient safety and promoting an innovative economy.

For more information about how prescription drug costs are determined and how policy can impact patient costs, visit

John Conrad
Interim President & CEO
Illinois Biotechnology Innovation Organization

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