New episode! Why drugs cost so much, 101: Medicine monopolies

Hey there —

We’re always asking: Why do drugs cost so freaking much?

In surveys, more than 20 percent of people in the US report having to skip their meds because of the cost. How did that happen?

There are a bunch of reasons, to be sure — and we’ve looked into a lot of them. And of course there’s the most obvious one (uh, no universal health care system).

But more than anything, experts we’ve met have cited one root cause of this problem more than any other: The pharmaceutical industry has gamed the patent system to ward off generic competition and keep us paying top dollar.

So in today’s new episode, we’re presenting a 101-level crash course in how that came to be.

It’s part history class — we trace this issue back more than 50 years. But mostly it’s a profile of a guy whose wild life story put him at the center of it all.

Al Engelberg helped shape America’s pharmaceutical marketplace, using the skills and street smarts he learned as a teenager working on the Atlantic City boardwalk.

Now 86 years old, Al has spent most of the last 30 years trying to patch the holes in a system he helped create.

Almost as soon as we began talking, he told me that within the pharma world, “half the people think I’m dead, and the other half wish I was.”

Class is in session.

I’m really glad Dan and I got to talk with Al. I appreciated his candidness almost as much as his Jersey accent, and I hope you will, too. Go ahead and listen.

You can read more of Al’s story — plus his prescription for fixing the crisis of high drug prices — in his book, Breaking the Medicine Monopolies: Reflections of a Generic Drug Pioneer.

Check out our earlier reporting on drug patents

In these two 2023 episodes (part one and part two), we spoke with author and YouTube megastar John Green about his campaign to get Johnson & Johnson to release their patents on a lifesaving TB drug. And we met Tahir Amin, a lawyer and patent researcher on a mission to fix the global patent system (whose upcoming book I just pre-ordered).

And all the way back in 2019, one of Dan’s very first Arm and a Leg episodes traced the history of insulin and its outrageous cost.

This NYT debate is kind of wild

On Tuesday, The New York Times published a 40-minute debate between a surgeon who went viral for her videos chronicling insurance nightmares, and a former insurance company executive.

You don’t see a lot of insurance bigwigs willing to subject themselves to something like this, so I had to watch.

My take: Each of them made some points. Both of them frustrated me by leaving some important things out. And the insurance guy made one very bold statement I keep thinking about.

First, some background: Dr. Elisabeth Potter specializes in breast reconstruction and runs a surgical center in Austin, TX. In January of last year, she says she was pulled out of the operating room mid-surgery to take a call from UnitedHealthcare, who didn’t want to pay for one of her other patients’ overnight stay.

When she posted an Instagram reel about it, United threatened legal action if she didn’t take it down. She kept the video up — but she feared the fallout would bankrupt her. A bunch of folks messaged us about it, and we’ve been following her ever since.

Dr. Troyen Brennan is also a physician — but one whose colleagues he says accused him of having gone to the “dark side” by becoming chief medical officer at CVS Caremark, Aetna’s behemoth parent company. His claim to fame: getting CVS drugstores to stop selling cigarettes.

Each took turns drawing cards from a pile with questions like “Do insurance companies prioritize profit over patient care?” and “The biggest problem with our health care system is __?”

The most surprising answer to me came in response to the question “The best way to get health care costs under control is __.”

To Potter, the answer lies in transparency. Let patients know the price of things upfront, and let them shop for the best deal.

But here’s how Brennan responded:

Brennan doesn’t go so far as to advocate for Medicare for All or anything. And he is a former insurance exec. But it left me wondering how many other insurance higher-ups share this pessimism.

And if they’re not betting on a long-term future for commercial insurance (you know — the insurance you get from work, or get from Obamacare, or don’t get at all because premiums are too high), what are they betting on?

Did you watch the video? What were your thoughts?

Re: Who HSAs really work for

In our last First Aid Kit, we shared a story from Popular Information about the country’s largest administrator of health savings accounts. And we offered a quick takeaway: Unless you’re making six figures, an HSA probably won’t save you money.

Within minutes we received a forceful rebuttal from a reader named Stephanie Lee, a financial coach and tax preparer. Her email starts

Stephanie shared a bunch of interesting links and food for thought. We’re looking forward to taking a close look and reporting back. Because if there’s a way to save money and avoid getting ripped off, we want to share it with you.

Do you use an HSA? What’s been your experience?

That’s all for today! Hope you enjoy this “101 class.” We’ll be doing some more of these in the next couple of months, and we’re really psyched.

— Emily