10/14/2013 02:50 pm ET Updated Jan 23, 2014

We Need a Revolution in the Pharmaceutical Drug Industry!

Imagine you live in a small village in Africa and your child is dying of a treatable disease. It is brought to your attention that the drug used to treat your child's disease costs less than $1 to produce but you would have to pay more than $1,000 to purchase it (an amount that is impossible for you to pay). Tragically, you watch your child die as you are consumed with grief, confusion, and resentment for global pricing structures.

Of course, pharmaceutical drugs cannot be free. Companies need incentives to conduct research and to increase research and development. Without this incentive, unfortunately, we cannot be assured that the industry would advance as quickly and effectively as we would hope, or come to have relied upon. But there must be some limit here.

A U.S. Senate Committee once found that the profit margins for pharmaceutical companies were four times those of other companies. The report also showed that pharmaceutical drug price inflation was six times that of the general rate of inflation (between 1980-1992).

American law has abetted the dramatic increase in prescription drug costs. Medicare Part D, an unfunded mandate passed during the Bush administration in 2006, offered prescription drugs to Medicare beneficiaries for the first time. However, under this law, the federal government is forbidden from negotiating drug prices with pharmaceutical companies. As a result, Americans are compelled to pay the highest prices in the world for prescription drugs. While there are measures that would change this policy, it is unlikely to pass the Republican-controlled House or a Senate filibuster.

Consider the consequences of America's policies for the consumer:

• The average American spent nearly twice as much for prescription medicine in 2009 as in 1999.

• An estimated 48 million Americans were financially unable to afford prescription medicine in 2010.

• For 30 popular prescription drugs, the American consumer pays about twice as much as consumers in the United Kingdom, France, The Netherlands, and Australia.

• About 1 million Americans travel to Canada to purchase prescription (and over-the-counter drugs unavailable in the United States) drugs due to the cost differential; under American law, it is illegal to import such drugs into the United States, ostensibly because the quality of these drugs cannot be confirmed.

• Mexico is experiencing, what they refer to as, medical tourism. Mexican pharmacists estimate that about 70 percent of their business comes from U.S. tourists who cannot, or do not wish to, pay the exorbitant prices of prescription medication.

Sometimes, pharmaceutical companies are allowed to stretch their profits even further, especially for "blockbuster" drugs that bring in billions of dollars annually. Pharmaceutical companies usually have a 10-year proprietary license to market their drugs in the United States, free from competition, on the grounds that it enables pharmaceutical companies to recoup the money they spent conducting research for the drug. After those 10 years have passed, other companies may begin to produce generic (and much cheaper) versions of the same active drug. However, if a large pharmaceutical company can make a deal (or launch a legal proceeding that they know will fail) that delays the production of a generic equivalent, the company can then continue to earn up to billions of extra dollars per year.

There are some fortunate trends, however. Many pharmaceutical companies have realized that the expense of their proprietary drugs has literally caused people to reject prescriptions for these medications. They have employed various discounts and coupons (e.g., co-pay assistance) that have made available some new, promising drugs to people for as low as a few dollars a month. Other pharmacies offer free antibiotics and anti-diabetic medications (generic versions). In addition, the Affordable Care Act ("Obamacare") authorizes the U.S. Food and Drug Administration (FDA) to allow for the licensing of generic biotech drugs that target specific sites in the body to combat diseases from rheumatoid arthritis to cancers and anemia, among other conditions. These measures are necessary because the drugs were developed after federal law authorized generics for existing drugs in the 1980s, and now a year of treatment with these drugs can amount to $100,000-200,000 annually per patient. Currently, more than half a million people in the world have taken one of these drugs. For example, Humira (adalimumab), a biotech monoclonal (tumor necrosis factor) antibody drug used to treat various autoimmune disorders such as rheumatoid arthritis, can cost over $20,000 per year (and has earned its manufacturer, Abbott, tens of billions of dollars). A generic equivalent of this antibody drug would greatly help patients who have been prescribed Humira (adalimumab). Without the Affordable Care Act, and without a commitment to allow the FDA to establish a clear path to generics, these drugs will remain outside the reach of most people worldwide, who simply cannot afford to treat their infirmities.

The Ramban (Torat ha-Adam, Inyan ha-sakanah, 44-45) actually taught that one is forbidden from profiting like this when it comes to healing. He teaches that providing medication for one in need is a fulfillment of the mitzvah hashavat aveida (to return a lost object to another) and fulfills hashavat gufo (returning one's body to them). The halakhic authorities (Tur, Shulchan Aruch, Aruch HaShulchan) follow this approach. Rabbi Hayyim David HaLevi, on the other hand, taught that one has the right to a comfortable salary, including those working in the pharmaceutical industry (Tashlum Sekhar ha-Rofeh ba-Halakhah, Shevilin 1977).

Another serious problem in the drug industry is the prioritization of research for common diseases and lack of research and development for rare diseases. This is simply explained by profit motives. Hollis and Pogge, two professors, have estimated that about six billion dollars a year would be needed to sufficiently fund drug company incentives to register products that target diseases that commonly plague the poor. Peter Singer has argued for this imperative, suggesting that "affluent nations would also benefit from cheaper drugs and from medical research that was focused on reducing disease rather than on maximising profits."

There is some reason to be hopeful. According to the New York Times:

New approaches are saving millions of children's lives each year. In 1990, more than 12 million children died before the age of 5. Now that figure is down, close to 6 million. Bill Gates, whose foundation with his wife, Melinda, pioneers the development of the vaccines and medicines saving these lives, tells us that in his lifetime the number will of children dying before they reach the age of 5 will drop below 1 million.

I hope and pray that we can find a just balance: We must raise the necessary costs to develop ideal, targeted therapy that uses the latest knowledge and technology to optimize pharmacotherapy, but we also need to provide optimum treatment for the sick, regardless of how rare their disease is or what their income level is. It is unequivocally and morally wrong to condemn people to death because they cannot afford to pay for medicine.

Rabbi Dr. Shmuly Yanklowitz is the Executive Director of the Valley Beit Midrash, the Founder & President of Uri L'Tzedek, the Founder and CEO of The Shamayim V'Aretz Institute and the author of "Jewish Ethics & Social Justice: A Guide for the 21st Century." Newsweek named Rav Shmuly one of the top 50 rabbis in America."

Subscribe to the Lifestyle email.
Life hacks and juicy stories to get you through the week.