Book Review: Drugs, Money and Secret Handshakes

One thing’s for sure. There has perhaps never been a better time to be strategizing how to devise patents, distribution channels, rebates and commercial arrangements to maximize revenue or market share in the US drug market. The current hue and cry over prices and rebates has, if little else, paralyzed policymakers and healthcare buyers as they attempt to anticipate which way drug policy is going to go in the furious debate in Washington and elsewhere.

That thought is perhaps one of the unintended consequences of reading Drugs, Money and Secret Handshakes, a newly published book from Robin Feldman, a professor at the University of California Hastings School of Law. She had previously written another book, Drug Wars: How Big Pharma Raises Prices & Keeps Generics Off the Market, and between that title and the newest one, her animus against pharma marketing and pricing policies is pretty clear. At this point in 2019, however, even the pharma industry itself is questioning how to proceed in an orderly fashion in the US healthcare landscape; and the other players—wholesalers, pharmacy benefit managers and insurers, are equally up in arms.

So, to some extent, the value of Drugs, Money is as a review or survey of the many ways the marketplace for pharmaceuticals is distorted, counterproductive and unfair. Besides using the advantage of monopoly pricing, the pharma industry is also artificially extending patent exclusivities; gaming the PBM rebate system; suppressing generic competition; and above all, preventing transparency in pricing practices. Some of this is in the industry’s control; much of it is a reaction to the practices of pharma’s trading partners and institutional buyers. (I appreciate the insightfulness of the book’s subtitle: The Unstoppable Growth of Prescription Drug Prices, which recognizes that a “prescription” price isn’t necessarily a “manufacturer’s” price.) If you’re a player in this game, it’s good to know what the other players are doing.

Feldman concludes the book with a chapter on solutions, pointing out that there are readily accessed changes in policy—Medicare price negotiation, mandated price transparency, and revised patent law, among others—that could change the dynamics of today’s drug market. “… If we lack the political will to face the issues head one, we will have ourselves to blame…,” she concludes.

Drugs, Money and Secret Handshakes: The Unstoppable Growth of Prescription Drug Prices, Cambridge University Press, ISBN: 978-1108482455. 186 pages.