Why drugs cost so much, 101: Medicine monopolies

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

And it’s a complicated question. There are a bunch of reasons — to be sure. But in our reporting over the years, like our stories on insulin and tuberculosis drugs, experts cited one big reason over and over again:

The pharmaceutical industry wages sophisticated legal battles to keep monopoly control over their best selling, most lucrative drugs — blocking generic competition, and increasing their prices along the way.

How did it come to be this way?

In this first episode of a new series – what we’re calling An Arm and a Leg 101 – we’re doing a crash course in the history of the drug patent system.

And the rags-to-riches story of one amazing guy is going to help us do it.

Al Engelberg got schooled in the Art of the Hustle at a young age, collecting dimes at an illegal bingo game on the Atlantic City boardwalk.

Later, he’d put those street smarts to use as he sat at the negotiation table in Washington D.C., hashing out the details of a law that would usher in the generic drug industry as we know it. Then made millions from the rules he helped write.

And as he admits, his legacy is mixed.

On the one hand: The rules Al Engelberg helped write — a grand bargain between generic drugmakers and patent-holding brand pharma companies— unleashed the power of generic drugs to save Americans money.

Nine out of ten prescriptions written today get filled with a generic.

On the other hand: In the process of making his fortune, Al Engelberg discovered loopholes, gaps, and perverse incentives in that grand bargain.