I have united health care through AARP and on my monthly printout it shows what deductions they got from Drug companies why can Medicare do the same? Secondly talking about high prices I use SPIRIVA, drug name to help me breath better, I guess I do need to breath and it costs about $400.00 per month, just to breath, I think breathing is an important part of life in order to stay alive. Even with discount I still pay $100.00 per month. So clearly drug costs need to be addresses and limited in cost. Even with Medicare we cannot expect them to pay such high prices for medication, so how can we control the costs of drugs?
11
Simply put, the drug companies are currently squeezing the American people. They look and they act an awful lot like the "other" drug cartels. The evidence is easy to find. A prescription drug I use regularly cost $240 in my local drug store. The exact same drug can be purchased over the counter in Thailand for $28. The same drug is $32 over the counter in Chennai India. Using my US doctor's prescription I have also bought the same exact drug at a pharmacy in Frankfurt Germany for $32. When i told the pharmacist how much it costs in Seattle, she didn't believe me. Maybe the most unfair aspect of this egregious larceny, is what it does to my peace of mind. I always buy 3 or 4 of this drug whenever I travel anywhere beyond the US border. I always feel like it's me who is doing something illegal or unethical by bringing it back into the USA.
28
I believe all the cancer drugs listed are for late stage cancers and may add a few months to an inevitable demise. Those few months are extremely costly and contribute to the fact that most Medicare expenditures are incurred in the last few months of life. It is in the general interest that medications to prolong life for a very expensive couple of months not be widely used. If drugs like these are not widely viable, I think that's a good thing. And I have no problem with billionaires being the only ones who can afford a couple of extra months of misery.
12
Recently the government has required drug companies to reproduce testing for drugs that have been on the market for decades. The result has been that the drug companies are using this stupid federal requirement to double and triple the price for drugs that have been in use for decades. The FDA under Obama has gifted billions of dollars to the drug companies at the expense of poor sick people.
6
It is well documented that Drug Companies spend almost on advertising and suborning doctors as it does on creating new drugs. Europe does not allow the Drug Companies to advertise. I don't think it is a coincident that the same designer drugs are sold in Europe for for a fraction of the US prices. We should outlaw drug advertising and allow Medicare and Obama care to negotiate drug prices.
26
Your tax dollars at work:
1: The National Institutes of Health grant large sums of taxpayer dollars to fund university research for fundamental breakthroughs in disease treatment.
2. That research (if, hopefully, successful) results in patentable drug compounds.
3. Big Pharma acquires rights to those patents and brings the drug to market... and then...
4. ... charges said taxpayers exorbitant sums of money for the drugs that were discovered using said taxpayer money in the first place.
1: The National Institutes of Health grant large sums of taxpayer dollars to fund university research for fundamental breakthroughs in disease treatment.
2. That research (if, hopefully, successful) results in patentable drug compounds.
3. Big Pharma acquires rights to those patents and brings the drug to market... and then...
4. ... charges said taxpayers exorbitant sums of money for the drugs that were discovered using said taxpayer money in the first place.
38
Part of Obamacare, which Ezekiel knows all to well, was to give in to the drug companies for their support and keep other countries (Canada, etc.) out of the marketplace.
Bad idea.
Bad idea.
10
More advice from the Grim Reaper?
I read this doctor's work and suddenly I'm transported to 1910, where social Darwinism, eugenics, sterilizations, and other "modern" beliefs were practiced.
I read this doctor's work and suddenly I'm transported to 1910, where social Darwinism, eugenics, sterilizations, and other "modern" beliefs were practiced.
6
I've got a great way to slash how much Americans spend on drugs, as well as health care costs in general. My way will make you happier, feel younger, improve virility, and lead to an overall better quality of life. And, it costs next to nothing!!! What is this wonderful, magical solution??? I'll tell you:
Exercise, eat smaller portions, don't drink too much, don't smoke, and for G-d's sake America, stop putting bacon on EVERYTHING.
Exercise, eat smaller portions, don't drink too much, don't smoke, and for G-d's sake America, stop putting bacon on EVERYTHING.
14
I expected an article entitled "The Solution to Drug Prices" to at least offer some ideas, but Dr. Emanuel offers none. In fact, his closing sentence is "We must come up with a comprehensive solution now."
In between, Dr. Emanuel proceeds to tell us that there is not much the Government can do to fix the problem that the Government itself created by law in 2003. Additionally, he does not explore how the Government could fix it, also by law. If this had been a term paper, the good vice provost of the University of Pennsylvania would have flunked it.
A start might be to make it illegal for the pharmaceutical companies to waste countless billions of dollars in advertising of prescription drugs. Only two countries in the world allow them: the United States and New Zealand.
Other than the pharmaceutical companies, only the Italian mafia could or even would extort you to sell your house in exchange for extending your life for an average of 3.2 months with Opdivo . This is but one example of extortion that would be criminal in most other countries.
The solution to drug prices is really very simple: make sure that you elect representatives with a basic social conscience.
In between, Dr. Emanuel proceeds to tell us that there is not much the Government can do to fix the problem that the Government itself created by law in 2003. Additionally, he does not explore how the Government could fix it, also by law. If this had been a term paper, the good vice provost of the University of Pennsylvania would have flunked it.
A start might be to make it illegal for the pharmaceutical companies to waste countless billions of dollars in advertising of prescription drugs. Only two countries in the world allow them: the United States and New Zealand.
Other than the pharmaceutical companies, only the Italian mafia could or even would extort you to sell your house in exchange for extending your life for an average of 3.2 months with Opdivo . This is but one example of extortion that would be criminal in most other countries.
The solution to drug prices is really very simple: make sure that you elect representatives with a basic social conscience.
22
Wait! Wasn't Dr. Emanuel the one who said we should stop getting medical care and die at age 75? Maybe he's changing his mind...
Anyway, I actually agree with him this time (as opposed to the age 75 thing). Drug companies may spend a lot on R&D, but they spend a heck of a lot more on advertising and "drug detailing" to doctors. I think direct-to-consumer advertising should be abolished, and the overall cost of drugs lowered accordingly.
Anyway, I actually agree with him this time (as opposed to the age 75 thing). Drug companies may spend a lot on R&D, but they spend a heck of a lot more on advertising and "drug detailing" to doctors. I think direct-to-consumer advertising should be abolished, and the overall cost of drugs lowered accordingly.
17
My wife and I live here in Spain where I'm a dual national and receive my healthcare from the Sistema Nacional de Salud de España and my wife has an excellent private insurance which cost about $1200 per year with dental. We take a few drugs that int he US are all prescription, including 600 mg of ibuprofen for the occasional ache or pain. From statins to the ibuprofen all are over-the-counter. I have a topical cream for a skin condition that when I went to purchase in US costs $250 and said no thank you, in Spain $6 and over-the-
counter.
counter.
18
While in Ecuador a few years ago I had need of a common prescription antibiotic. In Quito it was over-the-counter and about half the price as in the US. Exactly the same stuff!
8
This unnecessarily confusing excursion into the world of drug prices can be brought down to one central observation: in almost all advanced industrial nations, irrespective of their putative ideological character, people believe that there is a collective national interest in health care and are not made afraid by hectoring to express this through government. We stand alone amongst "advanced" nations in our perverse unwillingness to recognize this fact.
19
Ezekiel Emanuel omits several possibilities. For example, consumers could be allowed to buy drugs from other countries, fostering competition, yet Democrats and 'free-market' Republicans oppose this. Does anybody seriously believe the lies of the pharmaceutical manufacturers that drugs in Canada or France or Germany are less safe? Indeed, it is the US where poorly regulated makers of generics (still often priced higher than brand drugs abroad) have been found to be adulterating their products.
The economist Dean Baker and the Center for Economic and Policy Research offered several proposals for reducing prices over 10 years ago. (PDF at http://www.cepr.net/documents/publications/intellectual_property_2004_09...
Research could be better funded by the federal government. Government could purchase patents at auction. Government could compel sale of the patents at a price based on calculation of the quality and extent of use of a drug. Companies could be barred from re-engineering drugs in minimal ways solely to extend patent protection.
Why so few alternatives from Ezekiel Emanuel?
The economist Dean Baker and the Center for Economic and Policy Research offered several proposals for reducing prices over 10 years ago. (PDF at http://www.cepr.net/documents/publications/intellectual_property_2004_09...
Research could be better funded by the federal government. Government could purchase patents at auction. Government could compel sale of the patents at a price based on calculation of the quality and extent of use of a drug. Companies could be barred from re-engineering drugs in minimal ways solely to extend patent protection.
Why so few alternatives from Ezekiel Emanuel?
18
The difficulty that will arise as a consequence of any of these approaches is that the U.S. now accounts for essentially all pharmaceutical industry profit margin so that achieving the same cost savings as any of the EU memberswill bring the industry to a screeching halt. For the U.S. to achieve reasonable drug pricing for drugs still on patent will require everyone else paying a bit more.
2
Not only are drugs cheaper than the USA, but the Australian government sets a price limit on medication for those on low income. $6.10 each and after 52 per year the rest is free. I think the USA is one of the few nations that is allowed to advertise perscription medication on TV.
11
In answer to a question posed by some:
"The fact that Medicare is forbidden in the law that created Medicare Part D to negotiate lower prices is no accident. The drug lobby worked hard to ensure Medicare wouldn’t be allowed to cut into the profits which would flow to big Pharma thanks to millions of new customers delivered to them by Part D. Even some Republican House members (this was a GOP sponsored bill), including Rep. Walter Jones from North Carolina and Rep. Dan Burton from Indiana, were aghast at the whole process:..."
http://www.ncpssm.org/EntitledtoKnow/entryid/2061/negotiating-for-lower-...
"The fact that Medicare is forbidden in the law that created Medicare Part D to negotiate lower prices is no accident. The drug lobby worked hard to ensure Medicare wouldn’t be allowed to cut into the profits which would flow to big Pharma thanks to millions of new customers delivered to them by Part D. Even some Republican House members (this was a GOP sponsored bill), including Rep. Walter Jones from North Carolina and Rep. Dan Burton from Indiana, were aghast at the whole process:..."
http://www.ncpssm.org/EntitledtoKnow/entryid/2061/negotiating-for-lower-...
12
Emanuel says we are paying too much for prescription drugs. Maybe he is right, but how does he arrive at that conclusion? He doesn't offer a shred of evidence or analysis to support polls showing that Americans are fed up with high drug costs. We all love free lunches a free lunch, but it's only recently that Americans have come to think they are entitled to them.
The Times recently stated that pharma accounts for 10% of our health care spending. Research by Frank Lichtenberg suggests that between one-third and three-quarters of recent increases in our life expectancy are attributable to pharmaceutical innovation. In other words, pharmaceuticals accounts for 1/10 of our health care budget but get us 1/3 to 3/4 of the benefits.
That seems like a bargain, at least as compared with, say, our medical profession. Maybe he can tell me how I have got my sums are wrong.
The Times recently stated that pharma accounts for 10% of our health care spending. Research by Frank Lichtenberg suggests that between one-third and three-quarters of recent increases in our life expectancy are attributable to pharmaceutical innovation. In other words, pharmaceuticals accounts for 1/10 of our health care budget but get us 1/3 to 3/4 of the benefits.
That seems like a bargain, at least as compared with, say, our medical profession. Maybe he can tell me how I have got my sums are wrong.
2
The issue with healthcare costs in this country seems to always return to an unhealthy relationship/fear of death. In what world does a $150,000/year cost of a drug in order to return 3.2 months of increased lifespan ever make sense? Until we as a society decide to start having rational discussions about death and dying and what costs are reasonable to be borne by the public, we'll never be able to eliminate waste. The demagogues have controlled the debate for long enough.
13
When Teva Pharmaceuticals is approved to buy a generic drug company it is many times supported by the US Government regulators.
When Teva turns around and increases the prices on inexpensive pills that have been available for years, I believe this is contrary to the spirit of why the US government allows Teva to buy a generic drug company and the tax payers and consumers lose.
When Teva turns around and increases the prices on inexpensive pills that have been available for years, I believe this is contrary to the spirit of why the US government allows Teva to buy a generic drug company and the tax payers and consumers lose.
10
Pharmaceutical prices are just one consequence of the unique American health care system that puts profits first and patients last. Without the "socialist" regulation that exists in other civilized countries (which regard health care as a basic human right rather than a source of shareholder value), we have a crazy quilt of drug companies and insurers perverting the market as they fight for their share of the profit. And when titans battle, mortals get trampled.
It's not just cutting-edge treatments that carry absurd price tags. I was recently prescribed a topical steroid cream. The drug itself has been around for over 40 years. That patent has long expired, and the costs of R&D and FDA approval have long been amortized. But the cream, now manufactured by an Indian company in India, carries a list price of $795. Fortunately, my employer's pharmaceutical benefit manager has used its considerable clout to negotiate a more favorable price: $640. My out-of-pocket cost should thus be a "reasonable" $128. But because I have reached my out-of-pocket maximum for the year (due to even more expensive drugs), my cost was zero. Still, my self-insured employer paid $640 for an Indian version of a 40-year-old drug.
On the other hand, the CEO of the company would clearly be derelict in his duty to shareholders if he did not lavishly gouge American patients and their third-party insurers. Especially since a bit of research reveals that the cream costs 318 rupees in India, about $5.
It's not just cutting-edge treatments that carry absurd price tags. I was recently prescribed a topical steroid cream. The drug itself has been around for over 40 years. That patent has long expired, and the costs of R&D and FDA approval have long been amortized. But the cream, now manufactured by an Indian company in India, carries a list price of $795. Fortunately, my employer's pharmaceutical benefit manager has used its considerable clout to negotiate a more favorable price: $640. My out-of-pocket cost should thus be a "reasonable" $128. But because I have reached my out-of-pocket maximum for the year (due to even more expensive drugs), my cost was zero. Still, my self-insured employer paid $640 for an Indian version of a 40-year-old drug.
On the other hand, the CEO of the company would clearly be derelict in his duty to shareholders if he did not lavishly gouge American patients and their third-party insurers. Especially since a bit of research reveals that the cream costs 318 rupees in India, about $5.
29
So says one of the architects of ACA. Why wasn't this addressed by that monstrous law?
6
So the Republicans wouldn't block the whole ACA immediately.
5
The miracle is that we have at least the ACA, your "monstrous law," as ugly as it is, instead of nothing, as the right-wingers would like. Get on the single payer system bandwagon, or don't complain.
13
The real solution to excessive drug prices is the patent system, which should require patented medical technology to be individually affordable to the patient or the parents of a minor patient.
There is currently the TRIPS 31 system, which allows for compulsory licensing of patents. That is probably the best way to keep prices reasonable. Music is subject to compulsory licensing. A reasonable royalty rate might be payable by the patient and equal to the federally expected college financial aid contribution. If you can pay $6,000 to send Connie to college you can pay $6,000 in royalties to save Connie's life (or you can buy a cheaper drug if available).
Another option is to have a drug market system on the federal health insurance exchange. People at various percentages of federal poverty level would pay various percentages of a manufacturer set price. Say at 50% of FPL, 5% of the manufacturer price. At 200% of FPL, 25% of the manufacturer price. Above 400% of FPL, buyers on the federal exchange would have to pay the manufacturer price. The federal government would match what Americans above 200% of FPL pay, subsidizing discounts to poor folks.
Drugs with less than 10,000 US citizen patients per year might be eligible for federal subsidies set by a federal board.
There is currently the TRIPS 31 system, which allows for compulsory licensing of patents. That is probably the best way to keep prices reasonable. Music is subject to compulsory licensing. A reasonable royalty rate might be payable by the patient and equal to the federally expected college financial aid contribution. If you can pay $6,000 to send Connie to college you can pay $6,000 in royalties to save Connie's life (or you can buy a cheaper drug if available).
Another option is to have a drug market system on the federal health insurance exchange. People at various percentages of federal poverty level would pay various percentages of a manufacturer set price. Say at 50% of FPL, 5% of the manufacturer price. At 200% of FPL, 25% of the manufacturer price. Above 400% of FPL, buyers on the federal exchange would have to pay the manufacturer price. The federal government would match what Americans above 200% of FPL pay, subsidizing discounts to poor folks.
Drugs with less than 10,000 US citizen patients per year might be eligible for federal subsidies set by a federal board.
2
Pharma Income:
40% on commercials telling you not to trust your doctors history and physical and discussion but to , "ask your doctor if our drug is right for you"
13% spent on R & D
What a subsidized scam.
40% on commercials telling you not to trust your doctors history and physical and discussion but to , "ask your doctor if our drug is right for you"
13% spent on R & D
What a subsidized scam.
19
The author mentions the importance of targeting antibiotic-resistant infections for drug companies. Drug companies are not interested in this line of research because it's bad for the bottom line. Why spend lots of money on a one-shot cure when you can research a drug you have to take for years. The fat profits in antibiotics are not there.
6
Zeke Emmanuel has been wrong repeatedly about health industry economics. Why, exactly, is anyone listening to him?
6
Why expect solutions from one who is so patently part of the problem?
2
Why was this topic not assigned to Dr. Marcia Angell of Harvard? Or, when does she get her equivalent op-ed space here?
3
If you want a comprehensive solution, the focus needs to be on the total cost of health care, not just prescription drugs. Time Magazine (Steven Brill) published a superb cover story showing hospital systems routinely massively overcharge everyone. Bitter Pill Feb 20, 2013 Why is it that hospital systems get a free pass?
Elisabeth Rosenthal wrote a great piece in the NY Times about the cost of hip implants 8/3/13. Implants that cost $350 to make are sold for $13,000, and private insurers are billed 2-3 times that amount according to the article.
So while you are correct the cost of drugs is outrageous, focusing only on drugs ignores the larger cost drivers such as hospitalizations.
Health care costs are never going to moderate as long as the legislators passing the laws are allowed to take campaign contributions from Big Pharma, Big Medicine, and Big Device Maker. Of course they're not going to allow Medicare to negotiate reduced prices, because reduced prices = lower campaign contributions.
The media's obsession with pseudo-issues, like whether Obamacare is good or bad, and who pays for what, has shifted the focus away from where it should be..why are prices so high?
Finally it must be remembered the the Federal Reserve has been printing money and keeping interest rates at zero in a desperate attempt to create inflation, the very thing we are hoping to avoid in healthcare. While not the main driver its is a factor.
Elisabeth Rosenthal wrote a great piece in the NY Times about the cost of hip implants 8/3/13. Implants that cost $350 to make are sold for $13,000, and private insurers are billed 2-3 times that amount according to the article.
So while you are correct the cost of drugs is outrageous, focusing only on drugs ignores the larger cost drivers such as hospitalizations.
Health care costs are never going to moderate as long as the legislators passing the laws are allowed to take campaign contributions from Big Pharma, Big Medicine, and Big Device Maker. Of course they're not going to allow Medicare to negotiate reduced prices, because reduced prices = lower campaign contributions.
The media's obsession with pseudo-issues, like whether Obamacare is good or bad, and who pays for what, has shifted the focus away from where it should be..why are prices so high?
Finally it must be remembered the the Federal Reserve has been printing money and keeping interest rates at zero in a desperate attempt to create inflation, the very thing we are hoping to avoid in healthcare. While not the main driver its is a factor.
5
"For instance, Australia’s more than 60-year-old Pharmaceutical Benefits Scheme has been the single purchaser of drugs for the country, making drugs available at fixed prices that are now listed online."
Why is it every other country's single-buyer system works, but somehow Medicare cannot serve the same purpose in the US?
The solution is quite simple. So of course we never see it proposed:
1. Change the law. Require drug companies sell to Medicare at the same price as the lowest negotiated price of any developed country. Publish those prices on the Web.
2. Change the law. Expand Medicare to become a single buyer. Let it re-sell drugs to private entities -- insurers, hospitals, pharmacies -- at a modest mark-up, say 5%.
Problem solved. Medicare need not "negotiate" because it's guaranteed the lowest price by law. Resellers can compete as they already do, on convenience and price. The American consumer stops subsidizing the rest of the world while still allowing the drug companies to set their own prices.
Why is it every other country's single-buyer system works, but somehow Medicare cannot serve the same purpose in the US?
The solution is quite simple. So of course we never see it proposed:
1. Change the law. Require drug companies sell to Medicare at the same price as the lowest negotiated price of any developed country. Publish those prices on the Web.
2. Change the law. Expand Medicare to become a single buyer. Let it re-sell drugs to private entities -- insurers, hospitals, pharmacies -- at a modest mark-up, say 5%.
Problem solved. Medicare need not "negotiate" because it's guaranteed the lowest price by law. Resellers can compete as they already do, on convenience and price. The American consumer stops subsidizing the rest of the world while still allowing the drug companies to set their own prices.
2
An electrician gets called to a house in an "average" area to change a light switch. He presents the owner with a bill for $180, which the owner refuses to pay as it is too high. They negotiate the bill down to $100. Later that day the same electrician goes to a house in a wealthy area and charges the same $180 for the same work, which the owner pays without question. Is the lower fee paid by the "average" home owner being subsidized by the wealthy owner? No. The electrician made more because he could get away with it.
The American consumer is not subsidizing the rest of the world. Drug makers are making profit in Canada, England, Australia, etc. Americans are getting ripped off. There's no one else to blame but yourselves for letting it happen.
The American consumer is not subsidizing the rest of the world. Drug makers are making profit in Canada, England, Australia, etc. Americans are getting ripped off. There's no one else to blame but yourselves for letting it happen.
5
Dr. Emanuel has a tremendous CV except he is wrong on this issue. The fact
is that the drugs he mentioned have new mechanisms that have not been
available to the public. Emanuel is well aware that not every patient will receive
these new agents, depending on their age, physical condition, and insurance. The pharmaceutical industry has problems pricing its products. Thalidomide comes immediately to the front, but another drug, bendamustine, an alkylating agent used for lymphomas was developed in East Germany years ago but only recently became available to the U.S.
No easy answers, hard economic problems. The government has to make
decisions and develop guidelines.
is that the drugs he mentioned have new mechanisms that have not been
available to the public. Emanuel is well aware that not every patient will receive
these new agents, depending on their age, physical condition, and insurance. The pharmaceutical industry has problems pricing its products. Thalidomide comes immediately to the front, but another drug, bendamustine, an alkylating agent used for lymphomas was developed in East Germany years ago but only recently became available to the U.S.
No easy answers, hard economic problems. The government has to make
decisions and develop guidelines.
1
An example of poor Medicare administration on drug prices?
Because of one therapy I no longer produce Testosterone. Medicare willingly pays $650 per month for a manufactured testosterone product. The cost along with my other prescription puts me in the doughnut hole by April.
I can get the testosterone compounded at any on of three compounding pharmacies here for $80 per month but Medicare will not pay for compounded prescriptions so I pay out of pocket which means I have until August before I go into the doughnut hole. But, I am actually saving myself money that way.
I have talked to other Medicare recipients and they don't understand this policy either.
Because of one therapy I no longer produce Testosterone. Medicare willingly pays $650 per month for a manufactured testosterone product. The cost along with my other prescription puts me in the doughnut hole by April.
I can get the testosterone compounded at any on of three compounding pharmacies here for $80 per month but Medicare will not pay for compounded prescriptions so I pay out of pocket which means I have until August before I go into the doughnut hole. But, I am actually saving myself money that way.
I have talked to other Medicare recipients and they don't understand this policy either.
1
"Almost all developed countries — including those run by very conservative governments — have an effective solution for drug prices..."?
EXCEPT the USA...
Once again, evidence that the USA is not a "developed" or "First World" nation, any more that it's a democracy any more.
Sad... Much here is like a Third World kleptocracy...
EXCEPT the USA...
Once again, evidence that the USA is not a "developed" or "First World" nation, any more that it's a democracy any more.
Sad... Much here is like a Third World kleptocracy...
6
Sure... let the government set pricing/'negotiate' on cutting-edge rare disease drugs....
I can't possibly envision anything going wrong with that approach.
I can't possibly envision anything going wrong with that approach.
1
Your thoughts about clinical utility and economy of scale make sense....but how to change a system in which the pharmaceutical and insurance companies give so much money to our politicians who write the laws?
2
Given the comments, SOMEBODY'S got to point out that not the least of our problems with drugs and drug costs is that far too many Americans believe far too devoutly that they'll live forever with the right pills, that whatever they're taking isn't the problem, that they are qualified to decide which drugs they need, and that their handful of quack pills and patent nostrums is just as good as that there fancy science.
10
Yes, we’re paying far too much for prescription drugs. We regularly hear from Americans who skimp on their medication or go without it due to cost. This can lead to expensive ER visits and serious health complications.
A recent Kaiser Family Health Foundation poll found that 72 percent of Americans think drug prices are unreasonable. There’s also strong popular support for: transparency in drug pricing, allowing Medicare to negotiate drug prices, limiting the price of specialty medicine, and allowing for importation from Canada.
Senator Bernie Sanders is introducing legislation aimed at addressing all of the above. It’s heartening to see this important public health issue gaining traction with the media and in the political arena. Because what good is a drug if it isn’t affordable?
A recent Kaiser Family Health Foundation poll found that 72 percent of Americans think drug prices are unreasonable. There’s also strong popular support for: transparency in drug pricing, allowing Medicare to negotiate drug prices, limiting the price of specialty medicine, and allowing for importation from Canada.
Senator Bernie Sanders is introducing legislation aimed at addressing all of the above. It’s heartening to see this important public health issue gaining traction with the media and in the political arena. Because what good is a drug if it isn’t affordable?
9
Maybe there is a good drug for corporate greed that's not to expensive. A drug for megalomania and narcissism.
10
Good point !!
Let's get to the real problem !!!
Let's get to the real problem !!!
Causing it or curing it?
Ezekiel has been dead wrong on almost all facets of health care for which he has suggested solutions.
The only solution to Drug Prices is to integrate and standardize all medical records and tabulate and reveal outcomes for all these drugs prescribed according to all the variables in patients charts.
Outcomes are the only product which is manufactured and produced by physicians with their patients using these drugs. Therefore, it's intuitively obvious that the cost and clinical utility of these drugs in producing outcomes were to be revealed, the pharmaceutical industry would be forced to compete capitalistically based on the quality and price of their drugs.
Until then, it'll be more of the same, the emperor of pharmaceutical marketing wears no clothes with sales based on massive direct to consumer marketing and no revelation whatsoever on outcomes.
What a subsidized scam.
The only solution to Drug Prices is to integrate and standardize all medical records and tabulate and reveal outcomes for all these drugs prescribed according to all the variables in patients charts.
Outcomes are the only product which is manufactured and produced by physicians with their patients using these drugs. Therefore, it's intuitively obvious that the cost and clinical utility of these drugs in producing outcomes were to be revealed, the pharmaceutical industry would be forced to compete capitalistically based on the quality and price of their drugs.
Until then, it'll be more of the same, the emperor of pharmaceutical marketing wears no clothes with sales based on massive direct to consumer marketing and no revelation whatsoever on outcomes.
What a subsidized scam.
3
It's an incomplete analysis to just say that Opdivo adds an average of 3.2 months of life to lung cancer patients. Long-term survival and the potential for cure in a small but not insubstantial number of patients suggests that these immuno-oncology drugs may be the foundation upon which routine cures for cancer will be built. Yes, they are expensive and should probably cost less, but they should not be directly compared for cost-effectiveness with chemotherapy and targeted agents that merely postpone disease progression and death. Ongoing research will refine the use of I-O in oncology, promising gains that just 5 years ago were inconceivable.
The one dominant fact in this whole discussion but not noted so far in the comments I have read is that about a decade ago Big Pharma surpassed Big Oil as the most dominant, well funded and well connected lobby in Washington. Until this elephant in the room fact is addressed it is all yammer no action on this file.
4
Yes, it continually makes you wonder. If Big Pharma is so adamant about its position about the cost of R and D and outrageous pricing, why do they have to continually bribe politicians with vast amounts of money to essentially maintain the status quo?
Predatory Capitalism is a suckers game, and it's a game that America has fully embraced and defended. It pits sociopathic predatory personalities on the same "playing field" as the elderly, the poor, the infirm, and average Americans who don't live their lives with money as their reason for existence.
It also makes problem solving less important than making a lot of money. We are constantly bombarded in the media with ads for all sorts of snake oil that will cure your every ill. These aren't meant to dolce problems, they are meant to make money.
It's a jungle out there.
Let the buyer beware, hopefully with some help from Elizabeth Warren and others like her.
It has been said that the pharmaceutical companies don't create cures, they create customers.
The "free market" has no place in medicine and health care.
It also makes problem solving less important than making a lot of money. We are constantly bombarded in the media with ads for all sorts of snake oil that will cure your every ill. These aren't meant to dolce problems, they are meant to make money.
It's a jungle out there.
Let the buyer beware, hopefully with some help from Elizabeth Warren and others like her.
It has been said that the pharmaceutical companies don't create cures, they create customers.
The "free market" has no place in medicine and health care.
4
It's just another manifestation of the inherent weaknesses of the for-profit healthcare system. Why does the doctor in hospital A charge $40,000 for an appendectomy, when the doctor in hospital B charges $20,000? Because he/she can. It's really just a question of how much profit do you want to make. There is nothing stopping the federal government - other than the drug lobby - from establishing nation-wide bulk pricing for all Americans, whether on medicare or private insurance plans. It would benefit the entire system. Here in Ontario, Canada, we don't have a general public drug plan, and many people have drugs partially or fully covered by employer-sponsored plans, or through individual private plans. Lower drug prices negotiated between the government and drug makers helps keep this framework manageable and affordable. And generic drugs are a big part of that. Many plans only pay for the generic version of a drug if one exists. Too bad some commentators think the real problem is other countries paying too little, rather than acknowledge the reality that the U.S. system is imperfect and they're simply being gouged.
5
Understand that many Americans honestly think that ALL of the drug companies are located in the U.S. hence, the misguided notion that THEY are subsidizing the rest of the world.
There are those who believe the higher profits available in the USA market help subsidize the lower cost of the same products in other markets around the world.
The difference is that in the USA regulating any business activity is worse than any disease for which there is a drug, while in other places businesses can operate only within allowable boundries.
The difference is that in the USA regulating any business activity is worse than any disease for which there is a drug, while in other places businesses can operate only within allowable boundries.
I’m not sure Dr. Emanuel’s logic adds up. He says that the high risks of drug development and high costs of research and development do not justify the current high drug prices, pointing to the high overall profits of drug companies. But drug companies do not make decisions to pursue development of a given drug based on overall company profit. Rather, they compare the risk/cost of development to the revenue expected if the drug makes it to the market. That is why drug companies don’t develop drugs for orphan diseases (unless the Orphan Drug Act makes it economically worthwhile) and why no new class of antibiotic has been brought to market in the last 15 years. Antibiotics are a low revenue type of drug because patients only need to take them for a brief time and (for now) only small percentage of people get infections that require a new class of antibiotic. This small market means a low revenue stream for antibiotics. And this has led all major drug companies to ignore development of new classes of antibiotics.
I agree that drug companies should not make as much profit as they do, and I agree that some of the market inefficiencies that Dr. Emanuel points out are allow drug companies to generate such profits. But any system or policy to fix the drug price problem should also take care to add incentives and mechanisms for development of the drugs we will need in the future.
I agree that drug companies should not make as much profit as they do, and I agree that some of the market inefficiencies that Dr. Emanuel points out are allow drug companies to generate such profits. But any system or policy to fix the drug price problem should also take care to add incentives and mechanisms for development of the drugs we will need in the future.
1
It sounds a bit like they are not developing the antibiotics because "there's no money in it".
As long as we live in a world where we don't solve problems because money is more important, we are in trouble.
A recent article in the Times pointed out that few industries would be profitable if they had to be accountable for their negative impact, such as big oil and it's pollution.
At some point, we may need to solve problems for the sake of solving problems.
Our economic system is far too arbitrary and barbaric.
The great minds among us need to come up with something more equitable and overall beneficial.
There must be a better plan than "survival of the fittest".
As long as we live in a world where we don't solve problems because money is more important, we are in trouble.
A recent article in the Times pointed out that few industries would be profitable if they had to be accountable for their negative impact, such as big oil and it's pollution.
At some point, we may need to solve problems for the sake of solving problems.
Our economic system is far too arbitrary and barbaric.
The great minds among us need to come up with something more equitable and overall beneficial.
There must be a better plan than "survival of the fittest".
Of all the issues raised, the statutory restriction on Medicare negotiating drug prices is the one most easily fixed, and the one most offensive to all.
As a small businessman I do business with the government under a GSA Schedule-it's the only way to do business with the government. Part of a GSA Schedule involves swearing, under penalty of law, that the government gets the lowest price for any product or service I sell. This applies to everything, from toilet paper to parts for Stealth Fighters.
Big Pharma money, contributions to reelection campaigns of all branches of government, made it possible for them to get an exception to this constraint, a constraint that applies to probably 99% of government contracts. In fact, they had it codified in law - Medicare is prohibited for negotiating prices.
All it would take to save that $15B in Medicare drug costs would be to hold Big Pharma to the same rules as everyone else: You charge the government no more than you charge anyone else.
As a small businessman I do business with the government under a GSA Schedule-it's the only way to do business with the government. Part of a GSA Schedule involves swearing, under penalty of law, that the government gets the lowest price for any product or service I sell. This applies to everything, from toilet paper to parts for Stealth Fighters.
Big Pharma money, contributions to reelection campaigns of all branches of government, made it possible for them to get an exception to this constraint, a constraint that applies to probably 99% of government contracts. In fact, they had it codified in law - Medicare is prohibited for negotiating prices.
All it would take to save that $15B in Medicare drug costs would be to hold Big Pharma to the same rules as everyone else: You charge the government no more than you charge anyone else.
9
I work in the biopharmaceutical industry, and I'd like to clarify a few misconceptions about how drug development is done.
1. Drugs are developed in academia and funded by taxpayer dollars: This is not true. Academic labs are often the starting point for new discoveries that eventually become successful therapeutics, but the lion's share of the costs and risks are born by private companies, often small entities, that license the rights to early discoveries, develop the therapeutic, and often sell it to big pharma.
2. Big pharma is highly profitable so new development will not be hindered by lower prices: Not entirely true. Big pharma mostly licenses new therapeutics after they have been significantly de-risked by smaller entities that are funded by venture investors. A quick look at life sciences investment in the past decade shows that a huge number of investors have abandoned the sector in favor of tech investment, even with existing price structures. There's just too much risk and too many failures.
The key to maintaining innovation is to target the so-called 'valley of death.' This is the unknown territory between an initial discovery in an academic lab and a promising therapeutic entering clinical trials. If translational research had more funding opportunities, the pipeline to pharma would be maintained even if profits on the back end were reduced. As it stands, the real risk-reward calculus is based on how much pharma will pay for a potential new drug.
1. Drugs are developed in academia and funded by taxpayer dollars: This is not true. Academic labs are often the starting point for new discoveries that eventually become successful therapeutics, but the lion's share of the costs and risks are born by private companies, often small entities, that license the rights to early discoveries, develop the therapeutic, and often sell it to big pharma.
2. Big pharma is highly profitable so new development will not be hindered by lower prices: Not entirely true. Big pharma mostly licenses new therapeutics after they have been significantly de-risked by smaller entities that are funded by venture investors. A quick look at life sciences investment in the past decade shows that a huge number of investors have abandoned the sector in favor of tech investment, even with existing price structures. There's just too much risk and too many failures.
The key to maintaining innovation is to target the so-called 'valley of death.' This is the unknown territory between an initial discovery in an academic lab and a promising therapeutic entering clinical trials. If translational research had more funding opportunities, the pipeline to pharma would be maintained even if profits on the back end were reduced. As it stands, the real risk-reward calculus is based on how much pharma will pay for a potential new drug.
6
As soon as we limit the grotesque profits of financiers, movie studios and sports figures, we can then limit those of drug companies, which produce things that save and extend life.
2
I haven't bought a movie ticket in over 30 years.
Comcast and Verizon send me mail nearly every day. I cut Comcast off in 1997 and Verizon about two years ago.
Try $19/month total for home Internet Verizon/Comcast or forget it.
What ever happened to the promise of $14.95/month?
I suspect it was to keep others from entering the market.
I've never bought a sports ticket.
My stock broker charges a tolerable price.
As for hedge funds, American sourced funds should have rate caps of maybe .003% per day. We shouldn't allow financiers to fleece the pension funds of teachers and police officers.
Just because a pig is eating up my neighbor's garden is no reason another pig should be allowed to eat up the veggies in my garden.
Harry Truman made a name for himself during WW2 in reining in defense contractor profiteering. We needed the weapons of war to beat Hitler and Tojo, but at a fair price. Ditto drugs.
Comcast and Verizon send me mail nearly every day. I cut Comcast off in 1997 and Verizon about two years ago.
Try $19/month total for home Internet Verizon/Comcast or forget it.
What ever happened to the promise of $14.95/month?
I suspect it was to keep others from entering the market.
I've never bought a sports ticket.
My stock broker charges a tolerable price.
As for hedge funds, American sourced funds should have rate caps of maybe .003% per day. We shouldn't allow financiers to fleece the pension funds of teachers and police officers.
Just because a pig is eating up my neighbor's garden is no reason another pig should be allowed to eat up the veggies in my garden.
Harry Truman made a name for himself during WW2 in reining in defense contractor profiteering. We needed the weapons of war to beat Hitler and Tojo, but at a fair price. Ditto drugs.
The Patient Protection and Affordable Care Act aka Obamacare was partially paid for by President Barack Obama aka Don Obama and his consigliere and capo the Emanuel Brothers-Rahm and Ezekiel- guaranteeing to the private Big Pharmaceutical Drug companies that there would be no public option nor effective price controls nor alternative to drugs other than them.
5
I seriously doubt there have been any independent audits of actual R & D expenses for drug development or specifically, what level of contributions input from government or university research has made to contribute toward drug development.
Drug treatment 6 figures? It shows the electorate are mindless. Trump is right, we are a bunch of stupid suckas.
Drug treatment 6 figures? It shows the electorate are mindless. Trump is right, we are a bunch of stupid suckas.
1
It's not just the new drugs that are outrageously expensive. Ivermectin is a product that has been used in humans and animals quite safely for decades. It's very cheap (except in prescription heartworm medicines for dogs.) Yet a new product for a particular skin condition whose active ingredient is 1% ivermectin costs approximately $300 for 1.5 ozs of skin medicine whose I get that FDA approval isn't cheap, but to charge $300 for a medicine whose active ingredient probably costs about 5 cents is price gouging humans.
Ivermectin happens to be the active ingredient in guinea worm medicines in Africa. It's safe and effective, its tolerances for humans have long been determined, and the medicines used in Africa are cheap as dirt. Why does it suddenly become so expensive for dermatological use in America?
Ivermectin happens to be the active ingredient in guinea worm medicines in Africa. It's safe and effective, its tolerances for humans have long been determined, and the medicines used in Africa are cheap as dirt. Why does it suddenly become so expensive for dermatological use in America?
6
It is difficult to sustain prices in the face of economic realities. But the one reality is these people are making money on the backs of ill individuals, where we are grateful (I have Hepatitis C) but we have the notion that we are causing a burden to the disgruntled taxpayer. Difficult to be in the middle as the ill person--unless massive amounts of private cash reserve are your lot.
2
Physician, heal thyself. At 10% of total healthcare spending, pharmaceuticals represent an extraordinary value for consumers and a relatively small target for system cost reduction. In contract, physicians and the hospitals where they treat patients represent about 50%. The culprit for healthcare costs is not drug pricing; it is over-utilization of health resources of all forms, particularly near the end of life. That over-utilization results primarily from a dysfunctional reimbursement system that decouples price from value but it is also reinforced by physicians who order diagnostics that are not required, perform unnecessary procedures and prescribe branded drugs where generics will work. We agree that heath care costs are a crisis but the problems and potential solutions are far more complex than just blaming "big pharmaceutical companies."
2
A lot of limited information here, and misleading too. Australia isn't buying Keytruda for its patients. Australia can surely create its own state-run pharma company and fund its own research. That it doesn't speaks to the prohibitive cost of drug development.
No industry is more pilloried than pharma. People imagine that as soon as a drug is developed it should be given away. It speaks to a moral issue of our care for each other, I understand that.
But we do not sponsor pharma development as a country, and no other country does. We put those risks on the investor, and then expect the investor to act like a charity.
No industry is more pilloried than pharma. People imagine that as soon as a drug is developed it should be given away. It speaks to a moral issue of our care for each other, I understand that.
But we do not sponsor pharma development as a country, and no other country does. We put those risks on the investor, and then expect the investor to act like a charity.
1
Someone like you never seems to learn. If what you say is correct, why do the drug companies spend more money on advertising than they do on actual R and D? Think of all that extra money they would have lying around if they did not spend a considerable amount of it continually advertising Cialis and Viagra? Unless one has been living on Pluto for the last 10 years or so, we pretty much know by now what these two particular drugs are for and how to get them.
For the record, despite what they may want you to believe, most new drugs are not necessarily developed by one source or company, they are often collaborative efforts among a number of institutions and companies throughout a number of different countries throughout the world where the development cost is spread.
By the way, the most successful Ebola virus vaccine thus far was developed by an institution in Winnipeg, Manitoba, Canada, one primarily funded by the Canadian Government.
For the record, despite what they may want you to believe, most new drugs are not necessarily developed by one source or company, they are often collaborative efforts among a number of institutions and companies throughout a number of different countries throughout the world where the development cost is spread.
By the way, the most successful Ebola virus vaccine thus far was developed by an institution in Winnipeg, Manitoba, Canada, one primarily funded by the Canadian Government.
2
What do you think a fair profit margin would be?
In Florida we regulate the price of electric power.
When I get home tonight FPL electricity will power my LCD light bulbs.
When I get home tonight FPL electricity will power my LCD light bulbs.
2
Our laws are ensuring that drug companies charge too much for their products and the third party status of patients in our insurance industry controlled medical care system assure that it cannot be corrected easily. The quickest fix would be to allow Medicare and Medicaid to negotiate the prices for drugs to seek the lowest prices for the greatest number of patients which they cover. The next best would be to encourage any drug companies which can be assured to be safe and reliable suppliers to compete for their business. Another big help would be to eliminate insurance companies power to decide which treatments and medications that they will cover. They abuse the privilege in the current arrangement, interfering with physicians treatment of patients not according to the better outcomes for patients but according to their notions of what would help their profitability. It feeds a race to the bottom process amongst insurers that cannot be remedied. If all must address the same standards of care according to best practices as determined by medical professionals and continual research and review, all insurers would be able to provide the best care and compete effectively for business -- nobody could get away with providing less and force everyone else to do the same to remain competitive.
3
One possibility is to have each insurer set aside a Congressionally percentage of premiums for FDA designated drugs.
Each insurer would determine a percentage of all premiums it would pay for each FDA designated drug on an all the doctors prescribe basis.
If the drug company accepts the insurer set percentage, the drug would get covered for every patient of the insurer. If the drug company refuses the insurer set percentage, the insurer would reallocate the money to other drugs in the same class (anti-depressant, recombinant auto-immune, AIDS protease, etc.)
Alternately, a government board could set a percentage schedule.
Consumers would pay co-pays of up to say the following to cover manufacturing costs:
1. high volume recombinant drugs - $1,000/year or 9.5% of income
2. low volume recombinant drugs - $3,000/year or 9.5% of income
3. chemical factory drugs - insurer set amount
Each insurer would determine a percentage of all premiums it would pay for each FDA designated drug on an all the doctors prescribe basis.
If the drug company accepts the insurer set percentage, the drug would get covered for every patient of the insurer. If the drug company refuses the insurer set percentage, the insurer would reallocate the money to other drugs in the same class (anti-depressant, recombinant auto-immune, AIDS protease, etc.)
Alternately, a government board could set a percentage schedule.
Consumers would pay co-pays of up to say the following to cover manufacturing costs:
1. high volume recombinant drugs - $1,000/year or 9.5% of income
2. low volume recombinant drugs - $3,000/year or 9.5% of income
3. chemical factory drugs - insurer set amount
Dr. Emanuel is missing the forest for the trees. The main problem is the socialist nature of our payment mechanism, Insurance. Ill informed consumers make costly decisions while the rest of us pay the price.. insurance companies being an inefficient middleman. There is no cost - benefit analysis done at the point of purchase. People need to pay for their own medicines rather than passing the cost onto society.
Cardinal rule for sellers is: Charge the maximum amount the market can bear. Since almost no consumer can afford $150,000 an year for a drug, pharma companies would reduce prices dramatically or risk going out of business. Right now, insurance companies have deep pools of money that the pharma companies compete for. Mr. Emanuel's Obamacare has actually made things worst by lifting the million dollar lifetime payout cap most insurance companies had per customer. With the cap lifted the sky is the limit, the money pit is bottomless.
Our system is not free market, that is just a veneer. A truly capitalist system would improve health outcomes when consumers demand remedies in exchange of their hard earned dollars rather than just expensive maintenance regiments. The free market have reduced the costs of everything, from uninsured medical treatments (like plastic surgery) to televisions to cellular phone to airfares. Its time we adopted policies that demonstrably work, not more well intentions but
Cardinal rule for sellers is: Charge the maximum amount the market can bear. Since almost no consumer can afford $150,000 an year for a drug, pharma companies would reduce prices dramatically or risk going out of business. Right now, insurance companies have deep pools of money that the pharma companies compete for. Mr. Emanuel's Obamacare has actually made things worst by lifting the million dollar lifetime payout cap most insurance companies had per customer. With the cap lifted the sky is the limit, the money pit is bottomless.
Our system is not free market, that is just a veneer. A truly capitalist system would improve health outcomes when consumers demand remedies in exchange of their hard earned dollars rather than just expensive maintenance regiments. The free market have reduced the costs of everything, from uninsured medical treatments (like plastic surgery) to televisions to cellular phone to airfares. Its time we adopted policies that demonstrably work, not more well intentions but
6
It would also be WAY more efficient to just let those old weaklings suffer or simply drop dead and stop wasting good money on them. Those costly sick babies, too - they'll just grow up to need more treatment.
There is NOTHING as important as money, the getting and the spending. You're right.
There is NOTHING as important as money, the getting and the spending. You're right.
The entire drug industry has been in a depression-preparation mode for decades. It’s the same thing that happens every time there’s talk of passing gun legislation. Gun owners go into a buying and hording mode because they fear new laws will depress their access. In some circles, that’s considered an overreaction.
Drug companies and their shareholders overreact the same way. Envisioning their profit margins being depressed, they’re hording by pushing up prices every chance they get, even though the price has no relationship to the cost or value of the drug. The problem is that they’ve been hording for so long, any reduction in profits seems like a depression. Adding to the issue is the problem of spotty restraints on pricing. When one market pushes their profit margin down, companies react by forcing someone else to make up the difference… plus some, because of fear of potential profit-margin reductions down the road.
Dr. Emanuel has presented some excellent thoughts on the topic. Whatever the solution, it can’t be one that holds down prices in one area, only to have companies raise prices somewhere else. Other market sectors do fine with lower profit margins… drug could do fine, too, once they adopted more realistic expectations.
Drug companies and their shareholders overreact the same way. Envisioning their profit margins being depressed, they’re hording by pushing up prices every chance they get, even though the price has no relationship to the cost or value of the drug. The problem is that they’ve been hording for so long, any reduction in profits seems like a depression. Adding to the issue is the problem of spotty restraints on pricing. When one market pushes their profit margin down, companies react by forcing someone else to make up the difference… plus some, because of fear of potential profit-margin reductions down the road.
Dr. Emanuel has presented some excellent thoughts on the topic. Whatever the solution, it can’t be one that holds down prices in one area, only to have companies raise prices somewhere else. Other market sectors do fine with lower profit margins… drug could do fine, too, once they adopted more realistic expectations.
2
Although there are definite outliers of crazy pricing, the problem is really with the high prices of drugs used for common diseases like diabetes and hypertension. While it would be nice to see a government-based database with comparisons of how effective drugs are compared to price, let's start with the low-hanging fruit.
Medicare, the largest payer of drugs in America, should be able to negotiate pricing just Medicaid and the VA can. Congress would have to reverse the no-drug-price-negotiation gift to Big Pharma in the Medicare Drug Law but it must be done.
Medicare, the largest payer of drugs in America, should be able to negotiate pricing just Medicaid and the VA can. Congress would have to reverse the no-drug-price-negotiation gift to Big Pharma in the Medicare Drug Law but it must be done.
3
Every Medicare Part D insurer tries hard to negotiate good prices.
What might be done is to encourage Medicare Part D insurers to team up.
The federal government might add 1% to its Part D payment if more than 10 million seniors but not more than 60% are covered by a Part D negotiating team. There might be two private industry Part D teams negotiating all the prices for America's Part D insureds.
Why do you expect a federal government to get a good negotiated price when it pays $600 for a hammer?
The VA deals are basically drug company charity. Drug companies can afford to give a few percent of beloved Americans good deals. Don't be misled by the VA deals.
If the percentage of the market subject to negotiation is 100% or nearly so, then it's pay up for "miracle" drug or the needy old folks will die.
If a potential employer doesn't want to pay me $20/hour, the employer has other people he can strike a deal with.
With many patented drugs, there is no other competitor. Pay the drug maker what he wants or negotiate with undertakers.
Drug prices need to be set under law and not a pretty please "negotiated" basis.
In France, the French government sets what it believes is a fair drug price. If the drug company accepts, the drug is covered by all insurance. If the drug company refuses to accept the official government set price, it can sell the drug to consumers on a true market basis. The French government doesn't haggle.
What might be done is to encourage Medicare Part D insurers to team up.
The federal government might add 1% to its Part D payment if more than 10 million seniors but not more than 60% are covered by a Part D negotiating team. There might be two private industry Part D teams negotiating all the prices for America's Part D insureds.
Why do you expect a federal government to get a good negotiated price when it pays $600 for a hammer?
The VA deals are basically drug company charity. Drug companies can afford to give a few percent of beloved Americans good deals. Don't be misled by the VA deals.
If the percentage of the market subject to negotiation is 100% or nearly so, then it's pay up for "miracle" drug or the needy old folks will die.
If a potential employer doesn't want to pay me $20/hour, the employer has other people he can strike a deal with.
With many patented drugs, there is no other competitor. Pay the drug maker what he wants or negotiate with undertakers.
Drug prices need to be set under law and not a pretty please "negotiated" basis.
In France, the French government sets what it believes is a fair drug price. If the drug company accepts, the drug is covered by all insurance. If the drug company refuses to accept the official government set price, it can sell the drug to consumers on a true market basis. The French government doesn't haggle.
Several comments have focused on the fact that drug spending represents only 10% of overall healthcare spending. Ok, but that portion is what this piece is focusing on. It doesn't mean the rest is ok. We can all agree that the entire system is a mess; and pricing is opaque throughout it. There is no discernible relationship between cost/value and price - not for drugs, not for medical care. I had to visit the ER (thankfully all ok) - the billed cost was over $12K. The negotiated price with my private insurance was less than 10% of that. When I check drug prices online to find the best deal there are often vast variations. This is the normal status of our current system. The only silver lining is that it must be unsustainable (I do hope) and will eventually lead to a more sane approach (single payer!!!).
4
Posting an article berating the drug companies for NY Times readers is like chumming for sharks. Too easy, too simplistic.
2
Big Pharma makes billions because tax payers pay billions for the research from which the corporations reps the benefits of new drugs! They get tax benefits for alleged R&D mush of which is spent on self servicing studies not development. Once the drugs go on the market shout an objective review of side effects and risks, Americans pay billions more for those drugs. It is a nasty business in which Congress participates with abandons and takes billions in "campaign funding" and members look forward to lobbying positions with those same companies. It is sickening.
2
The U.S. is the most lucrative drug market in the world. Every drug manufacturer wants to be a part of it. That's why they jump through any hoop the FDA or other regulatory agencies hold up. However the lack of price regulation is what makes the American market so desirable to drug companies. Where else can their products be sold to make up for the lost profit selling in European, Asian and Pacific countries? Yes, prices are exorbitant in the U.S. precisely because companies make business decisions to offset losses in other markets by overcharging where they can, i.e, in America.
3
Think back to 2010 and the Democratic Party ACA bill, part of the “deal” was to keep Big Drugs from opposing the bill was no importation of drugs from Canada and other countries. I suspect that Medicare drug pricing was in the “deal” as was the AMA. Maybe the Demo’s should have read the bill.
1
The pharmaceutical industry, as we all know, does not exist in order to heal the sick; it exists in order to enrich the elite at the expense of the sick. Sick people and their families will go to great lengths to preserve life and health, and that makes them easy targets for the greedy.
That's your "free" market at work, and if a few (million) poor sick people die needlessly and a few (million) more are bankrupted, that's just the price we pay to keep greedy billionaires profitable.
Profit is the priority, is it not? And for the greedy and powerful the system is working beautifully. As long as that's the case, it will be exceedingly difficult to come up with a comprehensive solution - ever.
That's your "free" market at work, and if a few (million) poor sick people die needlessly and a few (million) more are bankrupted, that's just the price we pay to keep greedy billionaires profitable.
Profit is the priority, is it not? And for the greedy and powerful the system is working beautifully. As long as that's the case, it will be exceedingly difficult to come up with a comprehensive solution - ever.
9
Key phrase: "Almost all developed countries."
Almost because, as so often, America is not among them.
Alone among developed countries, we fail to provide universal health care.
Alone among developed countries, we lock up a huge proportion of adults.
Alone among developed countries, we support the death penalty.
Along among developed countries, we fail to provide paid maternity leave.
Alone among developed countries, we waste years on elections.
Alone among developed countries, we regard women as legally inferior.
Alone among developed countries, we let the rich choose our leaders.
Alone among developed countries, we refuse to learn other languages.
Alone among developed countries, we reject the metric system.
Alone among developed countries, we worship violence.
Alone among developed countries, we sell guns to the sick and dangerous.
Alone among developed countries, we worship the deadly sport of football.
Alone among developed countries, we fail to regard education as a right.
Alone among developed countries, we waste billions on "defense."
Alone among developed countries, we let our leaders lie us into war and fail to hold them accountable.
Alone among developed countries, we claim our judges cannot consider foreign law.
Alone among developed countries, our legislators want to shut down the government.
Alone among developed countries, we have 17 presidential candidates who want to take us back to the 1800's.
Alone among developed countries, we are a sick and sorry mess.
Almost because, as so often, America is not among them.
Alone among developed countries, we fail to provide universal health care.
Alone among developed countries, we lock up a huge proportion of adults.
Alone among developed countries, we support the death penalty.
Along among developed countries, we fail to provide paid maternity leave.
Alone among developed countries, we waste years on elections.
Alone among developed countries, we regard women as legally inferior.
Alone among developed countries, we let the rich choose our leaders.
Alone among developed countries, we refuse to learn other languages.
Alone among developed countries, we reject the metric system.
Alone among developed countries, we worship violence.
Alone among developed countries, we sell guns to the sick and dangerous.
Alone among developed countries, we worship the deadly sport of football.
Alone among developed countries, we fail to regard education as a right.
Alone among developed countries, we waste billions on "defense."
Alone among developed countries, we let our leaders lie us into war and fail to hold them accountable.
Alone among developed countries, we claim our judges cannot consider foreign law.
Alone among developed countries, our legislators want to shut down the government.
Alone among developed countries, we have 17 presidential candidates who want to take us back to the 1800's.
Alone among developed countries, we are a sick and sorry mess.
37
jmb: If you find America so oppressive, you could always move to Syria or some other garden spot. Of course we're not perfect, but very average people do better here than in most of the world's economies.
1
And yet people clamor to come here......why? Perhaps because they see that we are also almost alone in providing opportunity to all...something I assume you do not see....
I remember watching Congressional hearings for Medicare Part D. There was much discussion as to whether or not Medicare should be allowed to negotiate drug prices. One of my state representatives stood up with a chart showing the various drug prices between the VA, Walmart (or some other provider) and Medicare. The drug examples were commonly prescribed ones. The range of cost was amazing. It blew my mind that even when presented with the huge difference between 'negotiated prices' and 'non-negotiated prices', there was opposition by congressional members to allow negotiated pricing. I and other friends wrote letters advising our representatives to stand firm. Then when AARP (led by Grover Norquist) threw it's backing to the Part D plan sans negotiated prices, it was all over. Thousands of people dropped their AARP membership in protest. But it was too late. Big Pharma and their friends in Congress got their way. So now when friends make a trip to Canada, I have them pick me up some therapeutic gel for joint pain where it is an OTC drug up there vs an RX here and it costs about 1/3 the price even with my insurance co-pay. Even with health insurance (not Part D) the costs for some prescriptions are mind blowing.
8
Samylu
You write that during the debate over Part D:
"One of my state representatives stood up with a chart showing the various drug prices between the VA, Walmart (or some other provider) and Medicare."
Medicare at the time did not cover self-administered drugs at the time and if your state representative was comparing Part B drugs, that was meaningless (not to mention that you cannot get Part B drugs at Walmart). So are you just kind of winging it? Certainly I highly doubt that Grover Norquist ever lead the far left wing AARP?
You write that during the debate over Part D:
"One of my state representatives stood up with a chart showing the various drug prices between the VA, Walmart (or some other provider) and Medicare."
Medicare at the time did not cover self-administered drugs at the time and if your state representative was comparing Part B drugs, that was meaningless (not to mention that you cannot get Part B drugs at Walmart). So are you just kind of winging it? Certainly I highly doubt that Grover Norquist ever lead the far left wing AARP?
Dr. Emanuel neglects to mention that the R&D costs of most drugs are borne by the government in its grants to academic institutions where the innovative drug research is actually done. The cost of drug advertising is the largest cost of drug manufacture and sales.(Source: Dr. Marcia Angell's great book "The Truth About Drug Companies"). Also missing is any reference to cost control through generic drugs. In New Zealand the government underwrites the cost of drugs after they have negotiated a low price from generic manufacturers. An average prescription for a standard hypertensive med like Prinovil, is $4 USD for a three months supply. That -- not at all by the way--will be threatened when New Zealand signs on to the Trans Pacific Partnership Agreement which both lengthens patent protections for big Pharma and allows drug companies to sue for lost profits from their non-generics. Big Pharma does not practice capitalism in the old-fashioned sense. It's syndicalism with governmental collusion. Why average middle class Americans, conservatives or liberals put up with this is a mystery. Grandma should not have to choose between paying for her food or her meds.
10
"Dr. Emanuel neglects to mention that the R&D costs of most drugs are borne by the government in its grants to academic institutions where the innovative drug research is actually done"....I worked in drug research for a major pharmaceutical company for 30 years. Give me one example where the R&D cost of a drug was borne by the government in grants to an academic institution where the innovative research was actually done. I note that you said most drugs, but I only ask that respond by naming one.
What is it with all this drug advertising on TV? Is a layman equipped to analyze the efficacy of that particular drug? Of course not, which makes this another example of how money is wasted in our system of medical care. But hey, the media companies are more powerful than our emasculated government, thanks to the Republican Party.
There are 2 reasons to advertise Rx drugs (aka "ethical pharmaceuticals" - wonder who thought up that term - someone worried about snake oil?):
It can work as a "push", encouraging patients to ask their doctors, or even insist, to prescribe something by name. However well this works, it must work somehow or the expensive campaigns wouldn't continue.
The other reason: support of maker's stock price through enhanced corporate/product awareness. A subset: there is a way to deduct as a selling expense the millions spent.
So yes - it can pay to advertise a product your audience cannot go out and buy.
It can work as a "push", encouraging patients to ask their doctors, or even insist, to prescribe something by name. However well this works, it must work somehow or the expensive campaigns wouldn't continue.
The other reason: support of maker's stock price through enhanced corporate/product awareness. A subset: there is a way to deduct as a selling expense the millions spent.
So yes - it can pay to advertise a product your audience cannot go out and buy.
I believe that until we decouple the delivery of healthcare of all kinds from the profit motive that drives our current healthcare system, we are wasting our time and will continue to pay the highest health care costs in the world for mediocre results.
As an earlier commentor noted, about 30% or each dollar spent on healthcare in the US goes to administrative overhead including advertising.
Dr. T.R. Reid in his book "The Healing of America..." (August, 2010)
also noted the excessively high administrative overhead that comes with
the labyrinthine, incredibly complex and frustrating maze that is the US healthcare system. The money wasted in trying to navigate our system is money that could be used to insure the uninsured and pay for better healthcare for all.
As the author of this column notes, other countries have found effective means for controlling drug costs and other healthcare costs. Unfortunately,
learning how to do things better from the experiences of other countries is not something we citizens of the US are likely to do, believing that we are
exceptional, and, f it wasn't invented here, it can't be any good. We will continue to pay the price for our hubris until we learn how to learn.
As an earlier commentor noted, about 30% or each dollar spent on healthcare in the US goes to administrative overhead including advertising.
Dr. T.R. Reid in his book "The Healing of America..." (August, 2010)
also noted the excessively high administrative overhead that comes with
the labyrinthine, incredibly complex and frustrating maze that is the US healthcare system. The money wasted in trying to navigate our system is money that could be used to insure the uninsured and pay for better healthcare for all.
As the author of this column notes, other countries have found effective means for controlling drug costs and other healthcare costs. Unfortunately,
learning how to do things better from the experiences of other countries is not something we citizens of the US are likely to do, believing that we are
exceptional, and, f it wasn't invented here, it can't be any good. We will continue to pay the price for our hubris until we learn how to learn.
15
The core of this problem of high pharmaceutical prices is the financial markets, the M&A's and the moral pathology that drives it. Mr. Emanuel's own words seem to belie a symptom of the disease. He posits that "People aren't upset about price - they're upset about value. If I considered medicine to be a business and people to be a commodity, that would be true.
But in fact, the fact that an important drug to stop an epidemic, is so expensive - makes me much more indignant. It means that financiers and investors are engaged in financial armed robbery.
The financial sector in this country needs to be taken down. They should consider themselves lucky if they only see pitchforks, because the longer this fraud and moral pathology continues, the more severe the correction will be.
But in fact, the fact that an important drug to stop an epidemic, is so expensive - makes me much more indignant. It means that financiers and investors are engaged in financial armed robbery.
The financial sector in this country needs to be taken down. They should consider themselves lucky if they only see pitchforks, because the longer this fraud and moral pathology continues, the more severe the correction will be.
19
Which epidemic, exactly, are you talking about? Ah, you're making it up as you go along. First to the pitchfork no doubt.
It's hard to buy the R&D excuse. Pharma is producing billions in profits yearly...actually, quarterly.
This is what a free market system is. The more desirable the drug is - like prevention of cancer, the higher the dollar amount companies can arbitrarily inflate prices.
Take excessive profiteering out of healthcare.
This is what a free market system is. The more desirable the drug is - like prevention of cancer, the higher the dollar amount companies can arbitrarily inflate prices.
Take excessive profiteering out of healthcare.
15
I totally agree.
Not to mention effective drugs not being brought to market in the name of protecting profits.
Not that that would ever happen, of course.
Not to mention effective drugs not being brought to market in the name of protecting profits.
Not that that would ever happen, of course.
1
They have to keep the shareholders happy with those high dividends and we all know that shareholders rate higher than patients.
1
Ezekiel J. Emmanuel ignores some of our best and worst public policy choices, to pharma's advantage.
Reforming our patent system of financing drugs development would obviate Ezekiel's claims we must accept drugs prices are not as important as drugs value, and require Austraiilan or Swiss price controls and caps. Ezekiel also ignores that reforming our patent system of financing drugs development would allow us to produce generics in parallel to our patent system without changing it. It would also reduce incentives to mislead on safety and effectiveness, reduce incentives to hold back innovation and compeition, incentives to buy laws like Senator Thom Tillis' 1137 to exempt dubious drugs from challenge, bribe doctors to influence FDA approval and reduce safety standards (21st Century Cures passed in the House), reduce incentives to treat people with less effective patented drugs (Eg generic chemotherapy for ovarian cancer), reduce the incentive for trade treaties to allow pharma to force governments to pay for more expensive patented treatments no more effective then generics (ISDN), incentives to invent diseases like Low-T and prescribe harmful drugs including those for unapproved uses, and reduce incentives to deliberately conceal evidence that a drug is less effective than claimed or even harmful (Ezekiel ignores just 5 such drugs have caused damage equal to all pharma spent on research).
http://www.cepr.net/publications/reports/financing-drug-research-what-ar...
Reforming our patent system of financing drugs development would obviate Ezekiel's claims we must accept drugs prices are not as important as drugs value, and require Austraiilan or Swiss price controls and caps. Ezekiel also ignores that reforming our patent system of financing drugs development would allow us to produce generics in parallel to our patent system without changing it. It would also reduce incentives to mislead on safety and effectiveness, reduce incentives to hold back innovation and compeition, incentives to buy laws like Senator Thom Tillis' 1137 to exempt dubious drugs from challenge, bribe doctors to influence FDA approval and reduce safety standards (21st Century Cures passed in the House), reduce incentives to treat people with less effective patented drugs (Eg generic chemotherapy for ovarian cancer), reduce the incentive for trade treaties to allow pharma to force governments to pay for more expensive patented treatments no more effective then generics (ISDN), incentives to invent diseases like Low-T and prescribe harmful drugs including those for unapproved uses, and reduce incentives to deliberately conceal evidence that a drug is less effective than claimed or even harmful (Ezekiel ignores just 5 such drugs have caused damage equal to all pharma spent on research).
http://www.cepr.net/publications/reports/financing-drug-research-what-ar...
4
To some extent, insurance companies have themselves to blame.
Use an app such as GoodRx. Search down several Brand price vs. generic prices at your local pharmacy set. How on Earth can Brand Big Pharma potentially charge orders of magnitude more for the same med??
Sure, some tiny number of pts will respond better to Brand vs. generic-- and vice versa, lets be honest-- but mostly the disparity is because insurance companies cap the co-pay so that the cost of Brand is very little if any more than generic-- so most people either slide along not changing, or prefer Brand because it "might be better" (due to marketing if nothing else!). However, the insurance company is likely paying much more for the Brand even after price negotiation. Brand negotiates enough of a discount to keep the insurance companies from bestirring themselves to change the system. Regardless, the marquee before-negotiation numbers are used to justify stratospheric prices for Rx that have no competition.
Use an app such as GoodRx. Search down several Brand price vs. generic prices at your local pharmacy set. How on Earth can Brand Big Pharma potentially charge orders of magnitude more for the same med??
Sure, some tiny number of pts will respond better to Brand vs. generic-- and vice versa, lets be honest-- but mostly the disparity is because insurance companies cap the co-pay so that the cost of Brand is very little if any more than generic-- so most people either slide along not changing, or prefer Brand because it "might be better" (due to marketing if nothing else!). However, the insurance company is likely paying much more for the Brand even after price negotiation. Brand negotiates enough of a discount to keep the insurance companies from bestirring themselves to change the system. Regardless, the marquee before-negotiation numbers are used to justify stratospheric prices for Rx that have no competition.
1
Dr. Emanuel points to the absolute need for this. But he leaves out one essential point about what "price controls" do work now in our system. Although Medicare doesn't control prices, most payors pattern their reimbursements from Medicare. It is common practice for insurers to use a "Medicare less [X] percent" system to set reimbursements for procedures, products and services.
As a result, the government does control a very large part of the costs in our system. And, to overlook a process to control drug costs that is already working in our healthcare system, is probably a mistake. Adopting other countries' processes is valid- although our societal hubris probably gets in the way of their practical adoption.
Using a process that already is at work in our system is more likely to be adopted. Of course, overcoming the drug industry's leverage over Congress is an entirely different matter.
As a result, the government does control a very large part of the costs in our system. And, to overlook a process to control drug costs that is already working in our healthcare system, is probably a mistake. Adopting other countries' processes is valid- although our societal hubris probably gets in the way of their practical adoption.
Using a process that already is at work in our system is more likely to be adopted. Of course, overcoming the drug industry's leverage over Congress is an entirely different matter.
5
Dr. Emanuel speaks truth and begins an important dialogue. Drug costs in America are wildly overpriced compared to ALL other nations. Problem isn't drug prices its Congress. Politicians bought and paid for by big Pharma will never act in consumers interest. Can you imagine the drum beat and sound bites blaring night and day about socialized medicine? Dear gawd Fox News will go into overdrive. Sadly, many of my fellow Americans appear dumb as rocks to the reality and practices of the drug industry.
13
As in all things medical, its about 'cost shifting', nationally and globally. So, the solution is a fixed global price. Try that for a solution, In the end that would benefit the US. An additional benefit would be research for new drugs would go global, adding many new jobs in countries that now are not in the game.
5
The reason other countries have lower pill costs is because the pharmaceutical companies that sell them the pills are allowed to gouge their consumers living in the USA. So, if the USA upsets that applecart by forcing the pharmaceutical companies to throw away their profit from selling inside the USA someone will pay the price. And it won't be the pharmaceutical companies.
Surprisingly, one other factor left out that drives up both price and demand of drugs is direct to consumer advertising. The "ask your doctor" ads that are a constant staple on television and radio drive up demand for drugs that may, in fact, not be necessary. And advertising and ad buys are expensive, also driving up drug prices. A good start that would not impact consumers (but would undoubtably hurt advertising agencies and their employees) would be to repeal direct to consumer ads. Pharmaceutical advertising budgets dwarf r & d budgets. This, combined with strong centralized pricing controls would help make drugs more affordable to the citizens of this country, regardless of insurance status.
3
"Pharmaceutical advertising budgets dwarf r & d budgets."....Can you cite a reference. Too often claims are made and repeated without ever identifying the original source. Because I can count Ph.D.s, I can make a pretty good guesstimate that the big Pharmas are spending in the neighborhood of 1 to 2 $billion annually on R&D. Are they really spending more than that on advertising?
The article unfortunately puts too many misconceptions in people’s heads who are confused as it is.
1. Pharma as industry is very high risk and not necessarily always high profit… drugs R&D and manufacturing is not some golden dig as many think and as reflected in P&L statements of drug makers all over the world… Profits if any are not out of balance to risks otherwise their valuations and dividends would be much higher
2. Drug pricing is influenced by non other than patent expiration that no other industry has… Drug makers need to recoup the money spent on the drug itself as well as sustain research on many drugs that turned out not as successful. Cost of bringing a single drug to the market is nearly a billion dollars… If we want to enjoy low cost generics in 12 years after it introduced that’s the price to pay…
3. European single payers sometimes have shortage of most advanced drugs or they may not even be available… Some Euro Gov’ts like Greece are in billions of dollars in debt to drugmakers and have supply pressures that they transfer onto their consumers by denying the availability…
Hope that would be enough food for thought to those who’re quick to point fingers in only one direction… If we would have all of patents expire in 12 years on our cell phone or computer manufacturers, their products would cost a whole lot more $ prior to expiration…
1. Pharma as industry is very high risk and not necessarily always high profit… drugs R&D and manufacturing is not some golden dig as many think and as reflected in P&L statements of drug makers all over the world… Profits if any are not out of balance to risks otherwise their valuations and dividends would be much higher
2. Drug pricing is influenced by non other than patent expiration that no other industry has… Drug makers need to recoup the money spent on the drug itself as well as sustain research on many drugs that turned out not as successful. Cost of bringing a single drug to the market is nearly a billion dollars… If we want to enjoy low cost generics in 12 years after it introduced that’s the price to pay…
3. European single payers sometimes have shortage of most advanced drugs or they may not even be available… Some Euro Gov’ts like Greece are in billions of dollars in debt to drugmakers and have supply pressures that they transfer onto their consumers by denying the availability…
Hope that would be enough food for thought to those who’re quick to point fingers in only one direction… If we would have all of patents expire in 12 years on our cell phone or computer manufacturers, their products would cost a whole lot more $ prior to expiration…
The costs of research are factored in to the final costs of those drugs that do become marketable. But what is unsaid is that most basic research that eventually leads to useful drugs is done by taxpayer-financed research at NIH or with NIH grants given to investigators at academic institutions. The pharmaceutical industry is extremely adept at taking leads from discoveries made with NIH funds and developing these into useful drugs. It is a remarkably successful partnership. But it is OUR money that funds a lot of the initial basic research.
5
What you say about basic research is true. Basic research is the foundation on which drug discovery is based. But basic research is a very long way from a functional drug. You seriously underestimate the difficulty and challenge of applied research - discovery, development, and FDA approval demands science and innovation every bit the equivalent of basic research.
One still must get a prescription from physician, nurse practitioner, or physician assistant. This group of providers is targeted by Pharma most assiduously. Over the years regulations have been put in place that reduced the most egregious of sales practices and kickbacks, but a handsome or pretty young thing is still a staple of the marketing game. Yes, even in the doctor's office, sex sells, along with the complimentary pizzas, deli sandwiches, pens, notepads, wall posters bearing drug names prominently enough to get the patient's attention.
To watch national TV between the hours of 5:00-6:30 PM one gets the distinct impression that without drugs the citizenry of this country is all but ready for embalming. Am I mistaken or does advertising dwarf R&D on the spread sheet?
I am not the only person who believes we should return to the old days when advertising pharmaceuticals was illegal and shilling for cigarets wasn't. And I haven't smoked in over 30 years. Nasty habit, but it does free up a lot of money for Social Security benefits for those wise enough to never start or to quit while the quittin's good.
To watch national TV between the hours of 5:00-6:30 PM one gets the distinct impression that without drugs the citizenry of this country is all but ready for embalming. Am I mistaken or does advertising dwarf R&D on the spread sheet?
I am not the only person who believes we should return to the old days when advertising pharmaceuticals was illegal and shilling for cigarets wasn't. And I haven't smoked in over 30 years. Nasty habit, but it does free up a lot of money for Social Security benefits for those wise enough to never start or to quit while the quittin's good.
3
Having lived in London and seen how European health care works, three things have transpired to me about American healthcare.
1. Myth1: "Pharma companies spend a lot on R&D. "
See http://www.bbc.com/news/business-28212223. Well, pharma companies are in the same ball park of "R&D spending as a percentage of revenue" as FMCG companies like P&G. See http://goo.gl/BJm1kC. So, on an average, same amount of research spending is done on your shampoo as your medicine.
2. Myth2: "The cost of medicine is higher in US because we get the best drugs."
Large number of formulae which are sold in US have marginal efficacy as according to European studies. In other words, Pharma companies change the formula slightly with little or no difference to outcomes, and sell it at a huge margin over the original formula in US. That's not innovation in drug science; it is innovation in the science of ripping off people.
3. Myth3: If we regulated pharma companies, it would kill the desire to innovate and halt all progress in the industry. As the author already pointed it out that Pharma companies are taking in fat profits. If every seller is a winner, it safe to say that it isn't really an efficient capitalist market. That is more of a seller's market, where buyers are all cornered and beaten up by monopolistic enterprises.
The bubble needs to burst.
1. Myth1: "Pharma companies spend a lot on R&D. "
See http://www.bbc.com/news/business-28212223. Well, pharma companies are in the same ball park of "R&D spending as a percentage of revenue" as FMCG companies like P&G. See http://goo.gl/BJm1kC. So, on an average, same amount of research spending is done on your shampoo as your medicine.
2. Myth2: "The cost of medicine is higher in US because we get the best drugs."
Large number of formulae which are sold in US have marginal efficacy as according to European studies. In other words, Pharma companies change the formula slightly with little or no difference to outcomes, and sell it at a huge margin over the original formula in US. That's not innovation in drug science; it is innovation in the science of ripping off people.
3. Myth3: If we regulated pharma companies, it would kill the desire to innovate and halt all progress in the industry. As the author already pointed it out that Pharma companies are taking in fat profits. If every seller is a winner, it safe to say that it isn't really an efficient capitalist market. That is more of a seller's market, where buyers are all cornered and beaten up by monopolistic enterprises.
The bubble needs to burst.
12
As long as exorbitant profits are protected, then why worry?
2
Excellent article and suggestions. Is there a petition that we can all sign and send to Congress?
The drug industry is pretty much staging a nazi-like auction of life. Just replace the air in a gas chamber with money to but some drug to offer you a few months to live. It's a shame for the drug companies, the US government and Congress.
In the 50 percent profits, are also factored in pre-profit costs such as salaries and bonuses worth hundreds of millions of dollars.
There is a lot of corruption in the drug industry and this is just the tip of the iceberg. I am waiting for an article about how drug companies lobby for certain over the counters excellent cheap drugs to be banned by the FDA, ti kill competition for inferior, pricier drugs.
(one eg of many: Indometacin supositories, the best against menstrual cramps, cheap and used in the entire Europe and Canada for decades with no problems, was banned by the FDA, and replaced with more expensive and more inefficient drugs.)
The corruption of paying doctors incentives to prescribe the most expensive drugs, etc etc.
The drug industry is pretty much staging a nazi-like auction of life. Just replace the air in a gas chamber with money to but some drug to offer you a few months to live. It's a shame for the drug companies, the US government and Congress.
In the 50 percent profits, are also factored in pre-profit costs such as salaries and bonuses worth hundreds of millions of dollars.
There is a lot of corruption in the drug industry and this is just the tip of the iceberg. I am waiting for an article about how drug companies lobby for certain over the counters excellent cheap drugs to be banned by the FDA, ti kill competition for inferior, pricier drugs.
(one eg of many: Indometacin supositories, the best against menstrual cramps, cheap and used in the entire Europe and Canada for decades with no problems, was banned by the FDA, and replaced with more expensive and more inefficient drugs.)
The corruption of paying doctors incentives to prescribe the most expensive drugs, etc etc.
1
Why does the reference point in the price system of pharmaceuticals has to be one "applauded by conservatives"? Why not lay out the range of price system controls worked out in other "less conservative" countries too--and their results? And why not call the US system price system and profits of pharmaceutical companies by what it is, i.e. obscene?
3
A simple solution to how to price drugs: The FDA takes the lowest price for which a drug is available in any member country of the OECD (this to avoid unfair comparison with India and other less-developed countries), and decrees that neither Medicare nor Medicaid will pay more than 10% above that price for said drug. US drug prices would drop by many billions, and how could drug companies make the arguement that Americans should pay more than 110% of what the Swiss or Gerans or Japanese pay?
3
The problem with Zek is that he is Rahm' brother.
1
That's a totally inane comment.
The real question is "why can't the Gov't negotiate drug prices?". The answer, as stated in the article is because it's illegal. Why? Because that would benefit the American people and cost Big Pharma obscene profits, hence Congress passed the Pharma/Medicare provision of 2003 in the middle of the night amidst much lobbying and arm-twisting (from Big Pharma, of course). What to do? We just have to change the law. Now let's find out which Candidates in the next election cycle would support such a change.
3
Drug companies' complaints about the amount they spend on research and development are misleading and disingenuous. The basic research and development of many ideas leading to pharmaceuticals are paid for by the taxpayers. This should be acknowledged more often than it is in discussions of drug prices.
2
There's great complexity in the medical field. The relationship between the "physician", the patient, the pharmaceutical industry, the academics, researchers, the insurance companies and the government (with oversight, direct consumer and insurance functions) are not generally discussed when people discuss drug prices. We need to look at this from a totally different angle. Should an ordinary toilet seat cost more than what I would pay at a local home improvement store? How about a gold plated jewel-studded one? How about the last one on the shelf and two customers want it at the same time?
Did the pharmaceutical companies feel very concerned about older men and women missing out on satisfying sex life when they developed the drugs to deal with them? Or, were they concerned about the poaching of tigers and rhinos whose parts are used as aphrodisiacs?
Who pays (or doesn't pay) the heavy price of antipsychotic drugs that most of the mentally ill need but can't pay for?
Does the Devlin-McGregor portrayed in The Fugitive really exist?
Forget treatment of rare cancers. Should just the co-payment of certain eye drop prescribed to many US seniors be $80 for half a teaspoon of the drug when you can BUY its reputable generic version in another country for just a dollar?
Fairness, ethical conduct, professionalism, compassion and competence get hidden by unreasonable profits at every level. They become activated only when the right tone is used, hitting the right nerve.
Did the pharmaceutical companies feel very concerned about older men and women missing out on satisfying sex life when they developed the drugs to deal with them? Or, were they concerned about the poaching of tigers and rhinos whose parts are used as aphrodisiacs?
Who pays (or doesn't pay) the heavy price of antipsychotic drugs that most of the mentally ill need but can't pay for?
Does the Devlin-McGregor portrayed in The Fugitive really exist?
Forget treatment of rare cancers. Should just the co-payment of certain eye drop prescribed to many US seniors be $80 for half a teaspoon of the drug when you can BUY its reputable generic version in another country for just a dollar?
Fairness, ethical conduct, professionalism, compassion and competence get hidden by unreasonable profits at every level. They become activated only when the right tone is used, hitting the right nerve.
2
If you want to live in a civilized, sane, common-sense country when it comes to health care (guns, and lots of other things too), I highly recommend Australia. No prescription drug ads allowed on TV either. Did I mention sane?
1
I propose a Drug Price Parity law. It would work like this: Drug companies can charge as much as they like for any drug, but they may not charge any more in America than they do anywhere else. If they cut a deal with say Norway, that's fine, but they have to offer the drug at the same price to all buyers (private or government) in the U.S. A law like this would be easy to implement and enforce (just allow private lawsuits against companies that overcharge), and it would ensure that Americans get the best price available for all drugs.
2
One reason for the high price of drugs is the consolidation of the healthcare market. Most areas now have only one or two hospital firms, and they have increasingly come to control medical practices. We have only three major drugstore firms, and just a handful of pharmacy benefit managers, mostly owned by the drug stores. In response to hospital and pharmacy consolidation the health insurance companies have been doing the same, just to maintain bargaining parity. And consolidation is a way of life within the medical device and pharmaceutical industries. With few players, collusion is rife. Here again, we can thank the sainted Reagan: his laissez faire antitrust policies have allowed this problem to mature. Enthusiastic antitrust enforcement, along with breaking up the biggest firms, may not entirely solve this problem, but it would go a long way.
2
What do you mean Medicare can't have an approved drug list? I can't get several relatively cheap medications because they are not on my Part D provider's approved list. Medicare for prescriptions can't negotiate for prices because it is really a collection of private companies that make their own lists.
3
It seems like the best way to pay for drug R&D while limiting costs would be to find a large sugar mama country with in irrational insurance system to pay exorbitant prices for new drugs so that we can cap prices and free ride off of that investment. Oh wait...
4
The inability of government to negotiate Medicare drug prices resulted from corrupt politicians influenced by the drug companies. Look back , identify the responsible individuals, and expose them. It was mostly done behind closed doors. Then, find an honest politician, if you can, and just change that "law".
If you were buying a car, or a tv, would you create a 'law' preventing you from negotiating the price?!! Do not accept a 'law' that was produced by self-interested corrupt individuals.
If you were buying a car, or a tv, would you create a 'law' preventing you from negotiating the price?!! Do not accept a 'law' that was produced by self-interested corrupt individuals.
5
If the companies can employ cheaper labor and produce anywhere in the world for lowering their costs, why not the consumers have the same choice? Allow consumers to place their purchases from foreign sources if they are cheaper.
5
Just a point on the math - he states that Merck and Pfizer have profits of 18 percent, and talks about cutting profits by a third or a half. 18% profits mean that for every $100 in expenses, they're paid $118, and have $18 in profits. Cutting that $18 in half only save $9 for every $118 we're paying now - or just under 8% savings.
That would be nice, for sure (if cutting profits in half doesn't results in less investment in R&D, which it likely would), but 8% of an already small portion of overall healthcare spending is hardly game-changing. Even for Gilead with 50% profits, cutting profits in half would only results in a 16% drop in price.
That would be nice, for sure (if cutting profits in half doesn't results in less investment in R&D, which it likely would), but 8% of an already small portion of overall healthcare spending is hardly game-changing. Even for Gilead with 50% profits, cutting profits in half would only results in a 16% drop in price.
Inexpensive drugs, such as Midrin (for migraines), are simply taken off the market in the U.S. in an attempt to force patients to use the newer vastly more expensive drugs. (I was told this by my pharmacist.)
My doctor insisted I try 1 of the new meds. The co-pay alone was outrageous. Tried it for 3 days. Was nauseated and dizzy for 3 days AND my migraine was no better. If pharmaceuticals was a real business, I would have been able to get my money back.
My doctor insisted I try 1 of the new meds. The co-pay alone was outrageous. Tried it for 3 days. Was nauseated and dizzy for 3 days AND my migraine was no better. If pharmaceuticals was a real business, I would have been able to get my money back.
3
Midrin worked...and now it's just not available. But the more expensive and less effective drugs are! USA! USA! Such Exceptionalism!
If I understand this system correctly, the U.S. is essentially funding R&D for the rest of the planet. Pretty much every other industrialized country on Earth has some form of price controls. So let’s say a drug company develops a new drug, and they expect 1,000,000 patients will use the drug during the 14 years or so when they maintain a patent/monopoly. They estimate they will need to charge an average of $100 per patient to recoup their R&D costs plus the level of profit to which they have become accustomed. Now let’s say, due to price controls and negotiated rates, they can only receive $50 per patient outside the U.S., which will be roughly 950,000 of their 1,000,000 patients. If you do the math, that means they will have to charge U.S. patients $1,050 for the same drug people are paying $50 for in other countries. Is that more or less how this works?
66
" Is that more or less how this works?"
I think there is a lot more to the higher US prices than R&D. For one thing, the pharmaceutical industry spends more on marketing than it does on R&D.
Just to take one example, direct-to-consumer advertising is banned almost everywhere but in the United States. I don't think anyone would argue that the rest of the world should have to fund these. There is a lot of money to be saved by banning the unethical but not yet illegal practices engaged in by pharma.
As for illegal practices, pharma has paid billions in fines for illegal marketing, apparently as a cost of doing business.
I think there is a lot more to the higher US prices than R&D. For one thing, the pharmaceutical industry spends more on marketing than it does on R&D.
Just to take one example, direct-to-consumer advertising is banned almost everywhere but in the United States. I don't think anyone would argue that the rest of the world should have to fund these. There is a lot of money to be saved by banning the unethical but not yet illegal practices engaged in by pharma.
As for illegal practices, pharma has paid billions in fines for illegal marketing, apparently as a cost of doing business.
2
No, that's not how it works. Since you pulled your numbers out of thin air, let me do the same, but with more nuance and knowledge. First of all, one million global patients paying an average of $100/year works out to $100,000,000 - not sufficient for big pharma to develop. So let's multiply the global revenue by a factor of 10, to $1,000,000,000/yr. Divide the global patients into three categories: undeveloped world (e.g. Africa for AIDS drugs), developed world ex-U.S., and U.S.
Now, assume that companies will charge $50/yr to the undeveloped world and charge the ex-U.S. world one third of the U.S. price (much more realistic than charging less than 5% of the U.S. price to the developed world). That works out to $825/yr ex-U.S. and $2475 in the U.S. (or about $200/month).
So, yes, the U.S. is subsidizing drugs for the rest of the world (especially the undeveloped world), but not to the extreme that your post suggests.
Now, assume that companies will charge $50/yr to the undeveloped world and charge the ex-U.S. world one third of the U.S. price (much more realistic than charging less than 5% of the U.S. price to the developed world). That works out to $825/yr ex-U.S. and $2475 in the U.S. (or about $200/month).
So, yes, the U.S. is subsidizing drugs for the rest of the world (especially the undeveloped world), but not to the extreme that your post suggests.
2
It seems that the high cost of drugs certainly adds to the 1% vs. 99% of the population. If you are rich, you can have the advantage of taking any drug, but if you're poor, well, poor you.
4
People in foreign countries with caps on their drug prices use many of the same drugs prescribed here and sold for 2-3 times as much . Therefore US payors are essentially subsizing drugs for people in other countries.
This is without even considering the fact that most drugs are developed in the US with federal funds.
US citizens really need a break.
This is without even considering the fact that most drugs are developed in the US with federal funds.
US citizens really need a break.
4
We can look to Canada to see how they do it.
While we're at it, we can also see how their medical costs are half for the same quality.
While we're at it, we can also see how their medical costs are half for the same quality.
4
Drugs must be effective and reliable. A cancer drug that costs thousands for the patient but only prolongs life a few months certainly is not effective. When I turn on the television, and listen to drug commercials and the longs lists of side effects, I conclude that those drugs must not be reliable. Why do we have all of this TV advertisement for prescription drugs anyway? Much is spent on advertisements and certainly has nothing to do with research or production expense, but must be included in the cost of drugs passed on to insurers and the government. Surely doctors do not prescribe based upon information learned from TV ads. These adds should be eliminated.
4
It is heart-breaking to read all these excellent commentaries for this articles and all the other articles since NYT went online 20 years ago. And yet, despite all this public outcry nothing changes. This is why the voters are desperate for outliers, Sanders, Trump, Warren, and this is why the establishment spends so many billions to push us its candidates: Jeb Bush, Biden (former delaware senator where are all the banks that want lower taxes) etc. Even Obama caved in and dudded his electorate after promising to allow gov to negotiate for drugs. In a country where half the population makes between 2-3 k per month, for everything, rent, car, food, education, how can you ask for 1000 dollars for a pill? These people should be put in jaiil.
8
You can ask for $1000 for a pill because the drug has just been put on the market, the clinical trials are still being paid for, the staff attorneys and regulatory and medical people who make sure that any educational or promotional piece that is released conforms to FDA guidelines (huge fear in receiving Untitled or Warning letters from the FDA; compliance is everything, and it should be). Because that drug didn't just appear, it was researched and developed and spent years in clinical studies, and many others that were researched and developed and put through clinical studies didn't make it. And it has to be paid for.
I wish the drugs did not cost so much, but if they cure my cancer, I want that drug. And I will thank the pharma co for making it because my life is worth that much to me.
I wish the drugs did not cost so much, but if they cure my cancer, I want that drug. And I will thank the pharma co for making it because my life is worth that much to me.
How typical,an Op-Ed focussed on less than 15 cents of the healthcare dollar with not even a mention of the other 85 cents.It's informative to look at the whole.For a start,30 cents of each HC dollar go on to non medical costs including claims management,advertising and the like.Hospital stays,procedures,office visits and diagnostics make up the other 55 cents.Consider also that drugs can act as "levers" in that their use can reduce other healthcare costs.So yes,there is an opportunity to reduce UNIT drug costs.However,the much bigger opportunity lies in reducing the VOLUME of all healthcare resource utilization,including drugs.This opportunity lies in the hands of Clinicians and administrators who are usually incentivized to INCREASE the utilization of such resources,either because it benefits them personally,or because they institutions they work for expect it of them.Any while we are on the subject,Oncologists are amongst the worst offenders,given how much resource they use to pacify and "treat"families without much hope of a significant positive impact on the patient.Oops,shouldn't have gone there.
4
The point about antibiotic-resistant drugs is extremely important. Drug companies see great incentives in creating drugs that are needed for a long period of time while an effective antibiotic is one that is used only briefly. Yet there is a great need for them as bacteria develop resistance to the antibiotics we now use.
3
Not because I disagree--I don't--but just to point out the land mine in Emmanuel's rather good article, one of the things he's arguing for is conscious, deliberate decisions about priorities.
Or if you prefer, he's arguing for a kind of triage: we focus on treating the many at prices we can afford, rather than treating the few at prices we can't.
Again, I pretty much agree: when we do things like spend $300 grand to extend a terminal patient's life a couple months, we're taking money away from a hundred kids who need simple things like checkups, vaccinations, and eyeglasses.
but there are some landmines here. they start with making conscious, deliberate decisions rather than letting the Holy Market make them for us quietly.
Or if you prefer, he's arguing for a kind of triage: we focus on treating the many at prices we can afford, rather than treating the few at prices we can't.
Again, I pretty much agree: when we do things like spend $300 grand to extend a terminal patient's life a couple months, we're taking money away from a hundred kids who need simple things like checkups, vaccinations, and eyeglasses.
but there are some landmines here. they start with making conscious, deliberate decisions rather than letting the Holy Market make them for us quietly.
3
I wanted to buy 100 prednisone this morning and the druggist said that I could buy it outright for $25. Prednisone is an absolute commodity and I expected it to cost five or ten dollars. I suspect that drug companies use the benefit system to prevent commodity drugs from being priced as commodities.
2
A local pharmacy wanted to charge e $40 for 30 doses of liquid nitroglycerin. I had the doctor call it in to my mail order pharmacy for $10, still exhorbitant. One local pharmacy charged almost $2.00 for z-pak of generic azithromycin; a second charged $.38. On the other hand, if I did not have private insurance, my branded COPD meds would cost $600 or more for month or two. I now get them for $80 for three months. And, there is no longer generic albuterol, the asthmatic's go-to. Because of EPA regulations on the propellent, all are now branded and outrageously expensive. All these meds are in the realm of stuff the "normal" people take, and not just the specialty drugs for cancer or orphan diseases.
1
sh: If you think 25 cents per pill is expensive, you must really be frosted about the cost of a loaf of bread or a gallon of gasoline. Why is it that people will gladly pay multiples of your $25 for cell phones and TVs, but expect their medical care and prescription drugs to be free? Isn't your health at least as valuable to you as your gadgets?
1
For all of the people who decry the current system, I think most would be hard pressed to argue that we have not seen a golden age of development. Solvadi is an excellent example - a cure for a disease affecting millions. Whether these drugs would emerge in the absence of a profit motive can be debated until we die of old age (life expectancy has consistently increased thanks, in part, to medical advances). However, I think it is all too easy to say that the simple solution is through collective bargaining power and reducing "waste" in the form of marketing expenses. Recall that before the 1990s television ads for drugs were prohibited - I don't recall there being any blockbuster drugs (over $1billion adjusted) but I also don't recall the steady march of new products being approved each year. None of this is to say that the profit motive is absolutely what drives innovation, but I also don't think it can be easily eschewed. We do need affordable drugs. We also need innovation to continue to provide technological and clinical breakthroughs. The solutions of countries that account for single-digit percentages of pharma revenues can't be superimposed on the US which accounts for upwards of 40% of total revenues across the industry by some accounts. That kind of seismic shift would undoubtedly have an impact on drug development. Maybe we as a society are willing to trade off uncertain future breakthroughs for cheaper drugs today. That may be exactly what is being proposed
2
If there is a law that prevents drug price negotiation, that law is immoral and should be changed. If any member of congress wants citizens to believe they are doing the public's business, they would be wise to jump right on this. If not, then I guess we can surmise who is being paid to look the other way.
7
Yes, Yes ,Yes and Yes.
So what is anybody going to do about?
Hmmm...Just as I thought.
THAT'S your problem.
So what is anybody going to do about?
Hmmm...Just as I thought.
THAT'S your problem.
Another bush legacy I believe.
1
As the article suggests, we ought to encourage more research into drugs that will benefit the population at large. I understand the sticker shock for new drugs, but this is only temporary - in a few years time, the new drugs will become generic and more affordable. Let's not focus on the initial cost - let's focus on the number of treatment options and the long-term costs.
An alternative approach would be to have the federal government prioritize the conditions for which drug development takes place, fund that development and thereby own the patents on those drugs, and then license their production and distribution.
In such a system, drug manufacturers' risks would be minimized and their profits would be assured. At the same time, patients would benefit from lower costs. And multiple near-duplicate medications of questionable additional benefit would be eliminated.
The development of new medications should be based on a priority of needs and not on the likelihood of profitability.
In such a system, drug manufacturers' risks would be minimized and their profits would be assured. At the same time, patients would benefit from lower costs. And multiple near-duplicate medications of questionable additional benefit would be eliminated.
The development of new medications should be based on a priority of needs and not on the likelihood of profitability.
2
Drug companies should be allowed to charge what they want for their drugs but they should be required to sell their drugs in the US at the lowest price available in the developed world. If they can make a profit by selling a drug at a lower price elsewhere, they can make a profit at that price here.
6
Unlike most products the major cost of a new drug is discovery, development, and approval. This cost is incurred before the first prescription is ever sold and can easily run more than a billion dollars. The actual cost of manufacturing and putting the drug in the bottle is a small fraction of the total cost. This is why drug price fixing in other countries that don't have a significant pharmaceutical industry of their own (Canada) or lower prices in relatively poor countries (Mexico) can work. When you talk about profit to the company you can't use the manufacturing cost as a bench mark even though the manufacturing cost might be used to determine the price in other countries. On an individual basis, roughly half of all the marketed drugs never make a net profit for the company that invented them. Almost all the profit the company makes come from just a handful of all the drugs in their product line.
1
Exactly! But unfortunately for Americans, you do not have Government that looks after your interests and thus corporations do whatever they want and can get away with...which is a lot!
They wouldn't sell Drugs to us Australians at the prices we or the Europeans pay for them unless they still made good profits which they do, let me assure you of that.
They wouldn't sell Drugs to us Australians at the prices we or the Europeans pay for them unless they still made good profits which they do, let me assure you of that.
1
Yes. But with profits of 20, 30, 50 percent, those companies are obviously doing well despite the costs involved. There's some room for change here.
1
Simple, just don't buy the hype and limit your consumption of Rx drugs. Sounds absurd, but way too many people have a delusional belief that all drugs are beneficial. Our government is based on legalized bribery and will rarely act in our interest with the FDA being manipulated far too often. As Nancy Reagan so eloquently said, just say no.
4
Bravo! And start eating real food and cut out the syrup drinks to avoid diabetes.
The U.S. government grants patents on new drugs for 20 years. There should be a provision in the drug patent law, where the government can selectively buy back the patents for a fair price. The price would be based on total capitalization of new companies--say 5x the IPO price up to $1 billion, or a percentage of total R&D spending for a year of well established companies--say 50%, varying with the spectrum of use for the drug and the amount of the R&D budget. The discovery company would receive a 5% royalty for 100 years and the first rights to manufacture the drug at a reasonable price for 3 years.
1
We could end a lot of Big Pharma's leverage just by allowing people to buy their prescriptions from anywhere in the world over the internet. My guess is that within six months US drug prices for common prescriptions would drop in half. Within a year, they’d drop by 2/3rds. No need to regulate the corporations, just let the buyers decide and good old American capitalism will prevail. “Safe prescriptions”.. let the buyer make those decisions and rate their satisfaction with the products and supplier as we do with Amazon. Stop holding US citizen health hostage to corporate American greed.
12
Sigh. of all the stupid excuses for ridiculous drug prices, safety and reliability is about the only one that holds any water.
it is absolutely insane to think that consumers--any consumer--has any hope at all of evalutating the safety and reliability of what they're buying.
it is absolutely insane to think that consumers--any consumer--has any hope at all of evalutating the safety and reliability of what they're buying.
2
"We could end a lot of Big Pharma's leverage just by allowing people to buy their prescriptions from anywhere in the world over the internet."....Many people think we could save money by simply buying our drugs from Canada where they cost 40% less. How do you think the drug got to Canada in the first place? Do you think that big Pharma doesn't know how much of a certain drug the people in Canada require? When the amount of a given drug being sold to Canada exceeds what Canada would normally be expected to use, the Pharma will simply shut off the supply of that drug to Canada. Importing cheaper drugs from another country won't work as a solution.
1
How many of the drugs Australians consume were developed in Australia's price controlled environment?
Drug costs represent less than 10% of health care expenses ($271B of $2.9T). Total profits came to about $85B. Assume we cut them in half by 2021 (without impacting R & D; yes, a fairy tale, but that's par for the course when we discuss economics or health care). That would save a princely 1% of the $4.78T in anticipated health care expenditures that year.
It makes for a good story, playing to economic illiterates and the envy addled, as well as those who believe that you can simply wish away the laws of economics. But the simple fact is that drug company profits are a tiny fraction of total health care expenditures.
Meanwhile, depending upon how one counts, MD pay comes to 8% of health care costs. Oncologists, for instance, earn $285K per annum. Perhaps if our physicians worked for what MDs in Finland or Israel make, we could make a dent in high health care spending.
Drug costs represent less than 10% of health care expenses ($271B of $2.9T). Total profits came to about $85B. Assume we cut them in half by 2021 (without impacting R & D; yes, a fairy tale, but that's par for the course when we discuss economics or health care). That would save a princely 1% of the $4.78T in anticipated health care expenditures that year.
It makes for a good story, playing to economic illiterates and the envy addled, as well as those who believe that you can simply wish away the laws of economics. But the simple fact is that drug company profits are a tiny fraction of total health care expenditures.
Meanwhile, depending upon how one counts, MD pay comes to 8% of health care costs. Oncologists, for instance, earn $285K per annum. Perhaps if our physicians worked for what MDs in Finland or Israel make, we could make a dent in high health care spending.
4
Scuse me all to heck, but when you see the kinds of price disparities this article discusses, find that 1% of prescriptions are eating a third of what we spend on drugs, and look at the refusal to so much as consider cost-effectiveness, this particular naive fool kind of thinks we have a prob.
1
Morris Township, home to many pharmaceutical companies. Recuse yourself.
1
" How many of the drugs Australians consume were developed in Australia's price controlled environment?"
More than you would think. But even if NONE of the drugs we use are Australian made or designed, WHY do we pay so much less than the U.S? Why do International Drug Companies accept our pricing scheme...do you think they run their Australian Market at a loss and just keep supplying us with discounted drugs out of the kindness of their corporate hearts?
Or is the answer the same reason why McDonald's and KFC and other American companies have to pay a minimum wage of $19 full time or $23.50 an hour plus Overtime rates beyond a 38 hour working week, 4 weeks paid holidays, 10% social Security to the employees Retirement fund, Paid Maternity Leave and Paid sick Leave.....
Because they can pay more or receive less than they charge than in U.S because they STILL make good profits...just not OBSCENE Profits as they do in the U.S.
And in the U.S corruption allows Greed to reach levels of depravity few would allow.
More than you would think. But even if NONE of the drugs we use are Australian made or designed, WHY do we pay so much less than the U.S? Why do International Drug Companies accept our pricing scheme...do you think they run their Australian Market at a loss and just keep supplying us with discounted drugs out of the kindness of their corporate hearts?
Or is the answer the same reason why McDonald's and KFC and other American companies have to pay a minimum wage of $19 full time or $23.50 an hour plus Overtime rates beyond a 38 hour working week, 4 weeks paid holidays, 10% social Security to the employees Retirement fund, Paid Maternity Leave and Paid sick Leave.....
Because they can pay more or receive less than they charge than in U.S because they STILL make good profits...just not OBSCENE Profits as they do in the U.S.
And in the U.S corruption allows Greed to reach levels of depravity few would allow.
Obviously, this country needs some form of government control and negotiations of all drug prices. Why is this not a doable road to be taken given the sky- rocketing cost of most drugs, even supposedly low cost generics! Drug companies spend a ridiculous amount of money advertising their high priced drugs leading to even higher costs for the patient consumer.
2
The American Government grants patent protections to drugs that results in monopoly pricing for the life of the patent. We should require the Pharmaceutical companies to share the profits with the people who granted those monopolies. Fifty percent of the profits from patented drugs should go to the government, to offset the high costs of our prescription drugs, for the life of the patent.
7
Emanuel is right that "we must come up with a comprehensive solution now." He's right, but he doesn't offer one. So what's the point of this article? To show that the problem is difficult? We know that already.
7
Uh...Emanuel actually offered about three different possible solutions.
4
He does in fact offer two models from other countries that are more effective than our system- Australia and Sweden.
1
But he did present the Australian and Swiss systems as solutions. He could have gone on that most of Europe and Canada have some form of price caps and selection of drugs for their formulary. Pick one.
1
Ah, but this is America, and we are "exceptional." Ergo, why look at what any other nations are doing? Why model ourselves after them. "We're number 1!"
21
I am a retired pharmaceutical executive. During my time in the industry 30 years ago, the benchmark price to the distributor was commonly 7 times the cost of manufacture. The retail pharmacy usually keystoned, meaning that the consumer paid roughly 14 times the cost of manufacture. In fairness, this did not factor in R&D, but the profits were huge nontheless. I'm certain that the ratios are less extreme in today's market, but I'm also certain that drug companies not your friend.
34
@Robert Tyler
Kerrville, TX
I don't disagree with your overall sentiment but those clothes teenagers buy at the Mall probably cost 14 times the cost of manufacture when people are being paid a few dollars a day to make them. And of course you cannot exclude R&D from the pharmaceutical industry business model since it's a huge and essential cost. And what corporation is your friend? If you want a friend get a dog. The US is paying roughly 2.5 times what other countries pay for their drugs which is clearly a nonsensical anomaly given our purchasing power. Emanuel is advancing one solution which would undoubtedly work. When you look at all these other countries who have health systems costing half what ours does, price caps on goods and services are basically the reason the numbers are so much smaller. Only the government has the monopoly power to control oligopolies. Emanuel dismisses giving Medicare/Medicaid the ability to negotiate prices which they are barred from doing by Republican written legislation but this is not necessarily fair. Government is providing about 40% of total healthcare expenditures in the US which confers enormous bargaining power. If they negotiated a 25% cut in prices it wouldn't be long before private insurers were demanding the same and there would be an enormous political furore which would force the drug companies into compliance with the new norm.
Kerrville, TX
I don't disagree with your overall sentiment but those clothes teenagers buy at the Mall probably cost 14 times the cost of manufacture when people are being paid a few dollars a day to make them. And of course you cannot exclude R&D from the pharmaceutical industry business model since it's a huge and essential cost. And what corporation is your friend? If you want a friend get a dog. The US is paying roughly 2.5 times what other countries pay for their drugs which is clearly a nonsensical anomaly given our purchasing power. Emanuel is advancing one solution which would undoubtedly work. When you look at all these other countries who have health systems costing half what ours does, price caps on goods and services are basically the reason the numbers are so much smaller. Only the government has the monopoly power to control oligopolies. Emanuel dismisses giving Medicare/Medicaid the ability to negotiate prices which they are barred from doing by Republican written legislation but this is not necessarily fair. Government is providing about 40% of total healthcare expenditures in the US which confers enormous bargaining power. If they negotiated a 25% cut in prices it wouldn't be long before private insurers were demanding the same and there would be an enormous political furore which would force the drug companies into compliance with the new norm.
11
Recognizing that some drugs are essential to life: IE diabetes insulin-- we are a very over-medicated society. I believe my mom died because her doc put her on one last scrip on top of many, that she just died of over-medication. I am 60 and do not take a single medication beyond the usual motrin and fiber, occasional benadryl. that's the way I am going to live for most of my life, UNLESS I contract something truly awful. Even then, I will be very skeptical of a doctor who freely prescribes meds. Folks-- wean thyself from your addictions.
1
High cost of drugs is just one aspect of high cost of health care in the U.S. The cost of drug and health care are much affected by market and insurance system. A strong market regulation on drug market and reforms of the health care insurance system may lower more than just the drug price.
This article demonstrates a woeful lack of understanding of the issue. Drug research is expensive. Who should pay for it? Apparently Emanuel thinks taxpayers should bear the lion's share of the cost. Government influence on drug discovery needs to be focused on safety and efficacy issues. It takes anywhere from nine to sixteen years for a drug to be developed. It takes teams of highly educated, talented researchers to make that happen over this length of time. Yes, it's costly. But do you really want a tax structure in this country that does two things: strangles and regulates drug development de facto by deciding via a politicized system that determines which drugs get worked on and which ones get abandoned, and paralyzing tax rates that impair every citizens' financial welfare???? No thanks!
3
Controlling prices seems to work in the rest of the world. Did you read the article? What drug company do you work for?
5
Taxpayers are paying for a huge proportion of the real medical and pharma research that is done in universities throughout the country. We just aren't getting anything for it.
Instead, drug companies spend their money on marketing and coming up with frivolous patents for virtually useless modifications to existing drugs so that they can increase prices for them. Then they stop making generics. Their ONLY motivation is profit, not research and not medicine.
If you're really interested in citizens' welfare don't look to the thieving drug companies. They're the poster-children for the necessity of regulation.
Instead, drug companies spend their money on marketing and coming up with frivolous patents for virtually useless modifications to existing drugs so that they can increase prices for them. Then they stop making generics. Their ONLY motivation is profit, not research and not medicine.
If you're really interested in citizens' welfare don't look to the thieving drug companies. They're the poster-children for the necessity of regulation.
3
Why then do we pay more than anyone else in the world? Is it the responsibility of US citizens to ensure that drug companies (many of which are located elsewhere) reap huge profits? The regulatory burden of getting drug approval is just as onerous in the EU and Japan.
3
There's a logical problem equating specialty drug prices with Americans in general being fed up about drug prices. As you said, only 1% of drugs are the high-cost specialty drugs. This can't account for Americans being fed up with drug prices they are paying.
While high drug costs are indeed a problem for the whole system, the cause of the public's frustration is an increase in cost sharing on prescription drugs, especially compared to most medical plans which have low cost sharing for doctor visits. When you have to pay $100 for a drug at the pharmacy after a doctor visit that costs you $20, it seems like drug costs are out of control. However the actual cost of that doctor visit is probably closer to $200. The public's complaint comes from seeing their out-of-pocket costs, not the total costs of care.
As to proposed solutions, the Swiss solution presents a major political problem in the US - anytime that you deny coverage for cost effectiveness you open yourself to death panel and rationing charges. This is why Medicare covers everything.
While high drug costs are indeed a problem for the whole system, the cause of the public's frustration is an increase in cost sharing on prescription drugs, especially compared to most medical plans which have low cost sharing for doctor visits. When you have to pay $100 for a drug at the pharmacy after a doctor visit that costs you $20, it seems like drug costs are out of control. However the actual cost of that doctor visit is probably closer to $200. The public's complaint comes from seeing their out-of-pocket costs, not the total costs of care.
As to proposed solutions, the Swiss solution presents a major political problem in the US - anytime that you deny coverage for cost effectiveness you open yourself to death panel and rationing charges. This is why Medicare covers everything.
1
One way of looking at it is that we're paying too much for drugs. Another is that much of the rest of the world is paying too little, and that drug companies make up the difference by over-charging us ... because they can.
But suggesting that allowing Medicare to negotiate lower prices is a joke when the total benefit is $15 billion -- which is an absurdly low savings when compared to the risk of upending a system that incentivizes the development of newer and more effective drugs. We spend more than $40 billion on foreign aid. This is particularly absurd given the acknowledgment that such negotiations likely would drive up drug prices for the privately-insured.
Dr. Emanuel bills this op-ed as "The Solution to Drug Prices", but doesn't provide one -- he merely discusses what some countries do to contain prices and reiterates the need to come up with a comprehensive solution. Let me suggest a real solution.
We need to come up with a global pricing mechanism that is just to ALL countries. This may require the U.S. to adopt Switzerland's method of dictating pricing; or, less distortive of natural markets, find a way to overcome the rest of the world's desire to dictate pricing in their own interests but to the disadvantage of American consumers. It seems to me that the better solution is the latter, because artificially messing with drug company profitability and incentives strikes me as being as dumb as a bag of hammers if we want more effective drugs and more of them.
But suggesting that allowing Medicare to negotiate lower prices is a joke when the total benefit is $15 billion -- which is an absurdly low savings when compared to the risk of upending a system that incentivizes the development of newer and more effective drugs. We spend more than $40 billion on foreign aid. This is particularly absurd given the acknowledgment that such negotiations likely would drive up drug prices for the privately-insured.
Dr. Emanuel bills this op-ed as "The Solution to Drug Prices", but doesn't provide one -- he merely discusses what some countries do to contain prices and reiterates the need to come up with a comprehensive solution. Let me suggest a real solution.
We need to come up with a global pricing mechanism that is just to ALL countries. This may require the U.S. to adopt Switzerland's method of dictating pricing; or, less distortive of natural markets, find a way to overcome the rest of the world's desire to dictate pricing in their own interests but to the disadvantage of American consumers. It seems to me that the better solution is the latter, because artificially messing with drug company profitability and incentives strikes me as being as dumb as a bag of hammers if we want more effective drugs and more of them.
2
Luettgen's "solution" is a perfect example of right wing sophistry ... he opposes a couple of solutions that are working and proposes something that is in the "When pigs fly" realm ... really Dickie?
2
Your thought is that it's difficult to regulate prices in the USA so let's take a different route and regulate prices all over the world?
If you think it's difficult to regulate ours, imagine how difficult it would be to regulate everyone's prices.
If you think it's difficult to regulate ours, imagine how difficult it would be to regulate everyone's prices.
Are you actually seriously saying that because my Country as well as many others refuse to pay the ludicrous prices charged for drugs , you that is the reason that Americans pay so much more?
You said " ...much of the rest of the world is paying too little, and that drug companies make up the difference by over-charging us..."
Of course! Drug Companies are LOSING money selling their Drugs to these other countries , but being kind , generous souls they sell them anyway and then MAKE Americans pay the difference because they can...
Are you that brainwashed to think such things.? If what you said were true, the Drug Companies WOULD NOT SELL to anyone paying too little, and keep the same pricing in the U.S and with no DIFFERENCE to make up...they could make MUCH MORE Profits.
Gee...lucky for us they haven't figured that one out yet....
The Reason YOU pay too much for Drugs is simple. Nobody cares about your concerns and drug Companies are allowed to charge whatever they want and can get away with. Lucky for us in other countries, we elect leaders that represent OUR best interests not Corporations...
You said " ...much of the rest of the world is paying too little, and that drug companies make up the difference by over-charging us..."
Of course! Drug Companies are LOSING money selling their Drugs to these other countries , but being kind , generous souls they sell them anyway and then MAKE Americans pay the difference because they can...
Are you that brainwashed to think such things.? If what you said were true, the Drug Companies WOULD NOT SELL to anyone paying too little, and keep the same pricing in the U.S and with no DIFFERENCE to make up...they could make MUCH MORE Profits.
Gee...lucky for us they haven't figured that one out yet....
The Reason YOU pay too much for Drugs is simple. Nobody cares about your concerns and drug Companies are allowed to charge whatever they want and can get away with. Lucky for us in other countries, we elect leaders that represent OUR best interests not Corporations...
1
Perhaps changing the model completely is the answer. Have manufacturers make the drugs based on a free or nominal fee base and let them compete on price of manufacture. Have university and private firms contract for development of drugs that once approved would be open licensed for that free or nominal universal fee. Have testing and licensing performed by a joint cooperation of governmental and industrial/educational entity. In essence, let each sector do what it does best with the impetus for stupid and wasteful development costs and excess profits taken away.
-Researchers want to research and discover but are thwarted by drug company push for profits. Have government and perhaps the nominal "general fee" fund research. Added philanthropic funding can be
-Drug manufacturers, societally, can best stick to manufacturing and live within that competitive environment for their profits.
-That leaves the testing and licensing function which can be done based on cost plus and by disinterested a separate entity that is not swayed by profits based on the drug's success or not.
It seems worth a try. Each of the three "legs" would be incentivised to do what they do best and not influenced by the cloak of patent protection profits. Plus the added incentive of this model is that there would be no reason not to release the "patent" to the world and allow individual countries to do their own manufacture, thus presenting cheap drugs to poor countries. Voila! (perhaps)
-Researchers want to research and discover but are thwarted by drug company push for profits. Have government and perhaps the nominal "general fee" fund research. Added philanthropic funding can be
-Drug manufacturers, societally, can best stick to manufacturing and live within that competitive environment for their profits.
-That leaves the testing and licensing function which can be done based on cost plus and by disinterested a separate entity that is not swayed by profits based on the drug's success or not.
It seems worth a try. Each of the three "legs" would be incentivised to do what they do best and not influenced by the cloak of patent protection profits. Plus the added incentive of this model is that there would be no reason not to release the "patent" to the world and allow individual countries to do their own manufacture, thus presenting cheap drugs to poor countries. Voila! (perhaps)
2
" Have university and private firms contract for development of drugs"....If you did that there would never be any new drugs at all. The process is far more complicated, difficult, and challenging than you imagine. Seriously, I worked in drug research for a major pharma for 30 years, and the idea that a University could ever discover and develop a drug is light years from reality. Where they live is a completely different universe.
Your solutions seem awfully complex and require lots of agreements, set up , time and cooperation. All of which, to say the least, is challenging.
Or like many other Countries who protect their people from unreasonable expense due to excessive greed and ridiculous profiteering, just say NO.
Do you think for one moment the Drug Companies agree to our pricing ceilings and lose money supplying Drugs at these prices?
Of Course Not! They just make LESS Profits. But like so many things in America...they can go to town on the American Consumer because you have a system that favours Profit before People.
You could get the Government to do what others do for their people's best Interests. But first you need to make a government that actually puts the people's best interests first.
Now THAT is a challenge if ever there were one...given its America we are talking about!
Or like many other Countries who protect their people from unreasonable expense due to excessive greed and ridiculous profiteering, just say NO.
Do you think for one moment the Drug Companies agree to our pricing ceilings and lose money supplying Drugs at these prices?
Of Course Not! They just make LESS Profits. But like so many things in America...they can go to town on the American Consumer because you have a system that favours Profit before People.
You could get the Government to do what others do for their people's best Interests. But first you need to make a government that actually puts the people's best interests first.
Now THAT is a challenge if ever there were one...given its America we are talking about!
1
Tax the profits and recycle the money back to the people. Pre-Reagan tax rates protected the country for decades with this mechanism. It's impossible to micromanage every individual profit-making scheme.
6
It is and probably why America has completely given up and profits are allowed to come before anything and anyone else...especially the majority of people who are the greatest victims of such.
1
You will continue to have great difficulty finding a doctor as long as the current pricing structures persist, There will never be enough money to pay primary care providers if this persists, and big Pharma sucks up all the resources..
2
The Pharmacy Management company for my company' private health insurance has aggressively eliminated many newer or more expensive drugs from it's formulary. You simple cannot get them, except by paying full price.
The drugs that remain are either generics or placed into the top tier co-pay category, $45. To get the more expensive approved drug it may sometime require extra documentation from the Physician to justify the requested drug, and it has to be submitted through an appeal process.
This past year they added another tier of co-pay, with no explanation of how it works. It appears to be something like a 20% co-pay, and there is no upper limit.
The net result is that Physicians have retreated to prescribing generics. If the first course of treatment with generics doesn't work, then they prescribe newer drugs.
I now bring my smartphone with me for Doctor visits, with the browser set to the insurance company's formulary, so I can verify that the insurance company will pay for a drug that the Doctor wants to prescribe.
As insurance companies push back with this strategy, then Pharma see's a revenue decline and developing drugs for orphan diseases looks relatively more profitable.
The drugs that remain are either generics or placed into the top tier co-pay category, $45. To get the more expensive approved drug it may sometime require extra documentation from the Physician to justify the requested drug, and it has to be submitted through an appeal process.
This past year they added another tier of co-pay, with no explanation of how it works. It appears to be something like a 20% co-pay, and there is no upper limit.
The net result is that Physicians have retreated to prescribing generics. If the first course of treatment with generics doesn't work, then they prescribe newer drugs.
I now bring my smartphone with me for Doctor visits, with the browser set to the insurance company's formulary, so I can verify that the insurance company will pay for a drug that the Doctor wants to prescribe.
As insurance companies push back with this strategy, then Pharma see's a revenue decline and developing drugs for orphan diseases looks relatively more profitable.
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In addition to the possible solutions to the cost problem, listed here in this opinion, there are other concerns which drive up drug prices, which must be addressed. The cost of "Entitlement' extras, in drug companies marketing, is outrageous, and mostly unnecessary within reasonable competition. Direct Public Advertising should be abolished, as it drives up marketing costs and increases unnecessary competition between Pharmaceutical Companies manufacturing similar drugs. Further, the FDA's permissible in-house drug testing standards, if changed, would more expediently rule-out extensive testing of ineffective drugs faster, through objective outside studies; pursuit of profit potential would not be a factor driving independent drug-studies. Finally, FDA assignment of specific drug research and production to respective companies, based upon a efficacy-cost ratio, would refocus pharmaceutical companies to pursue work on their most successful cost-effective medicines, as shown in independent clinical trials. This would reduce unnecessary replication in competition to Patent acquisition.
Scott E. Torquato, MS, LCSW
Scott E. Torquato, MS, LCSW
35
The supreme court has said that drug companies can advertise. Generics do not advertise and patients think the advertised drugs are "better" or "newer."
"Newer" -yes.
"Better" no.
"Newer" -yes.
"Better" no.
1
Let's put aside the $100,000 hepatitis drug, and look at what we really deal with day to day. Generics are through the roof. Drug makers are colluding with each other to keep them off the market. There is a deliberate shortage of at least one ADHD treatment that has doubled the monthly cost even though it has been used for many, many years and the patent probably expired with disco. So what if kids can't concentrate and adults can't work productively? Those executive "retreats" to Aspen aren't going to pay for themselves.
There are people in this country with treatable but chronic illnesses who are cutting the pills in half of skipping medication altogether. I would like to see Dr. Emmanuel address this, directly, and not yammer about special pricing arrangements that are perverting the market. The market does not work. It is rigged. Tell me, in plain English, what you would tell the person who turned away from the pharmacy counter empty handed because the prescription costs hundreds of dollars. And whose kid is still sick.
There are people in this country with treatable but chronic illnesses who are cutting the pills in half of skipping medication altogether. I would like to see Dr. Emmanuel address this, directly, and not yammer about special pricing arrangements that are perverting the market. The market does not work. It is rigged. Tell me, in plain English, what you would tell the person who turned away from the pharmacy counter empty handed because the prescription costs hundreds of dollars. And whose kid is still sick.
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Although there are surely children who have ADHD and need treatment along with parents who cannot afford it and that is a tragedy, but articles in Sci. Amer., the NYT and other reputable sources, have clearly reported that many of these children do not in fact have ADHD (the growth rates of "reported cases" is astronomical and cannot be substantiated). These children lack adequate parenting and are being controlled by medication and this, I find, is criminal.
1
Vote only for the politicians who take zero money from lobbyists and corporations and Super PACs and the ultra wealthy. Until we all actually do that, this only gets worse.
this article neglects the obvious route of patent reform. Dean Baker at CEPR is the one to read in this issue.
Who gets to decide the effectiveness of a new drug?
The FDA or the NCI? These are not fast moving or effective
agencies. The way to do it is to put a ceiling on a drug.
This could be an average of the cost in other developed
countries. American patients pay the highest price for
new drugs. Drug companies count on this. They make
their money in America on the backs of the sick people
in America. They can sell a drug in Canada for 20% of
what it costs in America and still make a profit.
Knowledgeable consumers in America can by from one of
these companies with a credit card and a telephone call.
The FDA or the NCI? These are not fast moving or effective
agencies. The way to do it is to put a ceiling on a drug.
This could be an average of the cost in other developed
countries. American patients pay the highest price for
new drugs. Drug companies count on this. They make
their money in America on the backs of the sick people
in America. They can sell a drug in Canada for 20% of
what it costs in America and still make a profit.
Knowledgeable consumers in America can by from one of
these companies with a credit card and a telephone call.
"They can sell a drug in Canada for 20% of
what it costs in America and still make a profit.".....This is true if you are referring only to the manufacturing cost. But the manufacturing cost is a small fraction of the cost of discovery, development, and approval, all of which are paid out before the first prescription is ever sold. The company would never be able to recover the initial cost of discovery, development, and approval without the higher U.S. price. And yes, the American consumer is being forced to subsides the cost of drugs in Canada.
what it costs in America and still make a profit.".....This is true if you are referring only to the manufacturing cost. But the manufacturing cost is a small fraction of the cost of discovery, development, and approval, all of which are paid out before the first prescription is ever sold. The company would never be able to recover the initial cost of discovery, development, and approval without the higher U.S. price. And yes, the American consumer is being forced to subsides the cost of drugs in Canada.
Dr Emanuel, an oncologist, doesn't mention the value of his own work when talking about the value of high priced drugs. Perhaps if the high cost of physicians' wages, and the true value of those costs, were taken into account then the high price of medical care in the US would diminish.
Absolutely true, but expected in our pecuniocracy in which corporations (sorry, people) can donate fortunes for political candidates and have elected the best that money can buy. The law forbidding Medicare to bargain for drug prices was written by a Big Pharma executive during Bush Jr. presidency.
Another question: do we still have anti-dumping law forbidding imported goods be sold here for less than abroad? Why not to adopt a mirror image of that, forbidding sale of drugs for MORE that abroad. Many international companies sell here drugs made in their factories overseas, while the same drugs are sold by them there for a fraction of that price.
Do we have an unsaid amendment to the constitution: "Right to maximum profits you can get away with shall not be abridged"?
Another question: do we still have anti-dumping law forbidding imported goods be sold here for less than abroad? Why not to adopt a mirror image of that, forbidding sale of drugs for MORE that abroad. Many international companies sell here drugs made in their factories overseas, while the same drugs are sold by them there for a fraction of that price.
Do we have an unsaid amendment to the constitution: "Right to maximum profits you can get away with shall not be abridged"?
5
The deal the drug companies want is the freedom to milk it for all they can get. They get the most from the US and what they get from the rest of the world is gravy. Drugs which cost millions to bring to market yield billions in revenue. Profits may end up at 30% of revenue, but that is because of inflated and unnecessary expenses for advertising, lobbying to defend and preserve the right to gouge, outrageous executive compensation, corporate jets and acquisitions of drug companies and pharmaceutical products priced at levels which assume the right to gouge will continue.
At the same time, the big pharma tax strategy is to direct profits away from the US and other high tax jurisdictions and into low tax or no tax jurisdictions principally through the use of offshore entities combined with aggressive transfer pricing and strategic locations of head offices. The trick is to minimize revenues and maximize expenses in US taxable entities to produce a break even result in the US, thus no US taxes, and to maximize revenues and minimize expenses in low-tax/no-tax foreign entities to produce the profits in those entities.
You know who could take on this problem effectively? Donald Trump, that's who.
At the same time, the big pharma tax strategy is to direct profits away from the US and other high tax jurisdictions and into low tax or no tax jurisdictions principally through the use of offshore entities combined with aggressive transfer pricing and strategic locations of head offices. The trick is to minimize revenues and maximize expenses in US taxable entities to produce a break even result in the US, thus no US taxes, and to maximize revenues and minimize expenses in low-tax/no-tax foreign entities to produce the profits in those entities.
You know who could take on this problem effectively? Donald Trump, that's who.
3
We need to think outside the box on this one.
Not only are drug prices too high and their relationship to costs opaque, but there are a lot of potentially very useful substances that don't get investigated because the product would not be patentable.
The, albeit radical, answer is to change we view drug development:
1. All drug research to be done at Universities (almost already there).
2. No patents for drugs. Instead tax all drugs to have development money to be granted to Universities for research.
3. FDA to limit role to ensure purity and accuracy and completeness of information distributed with drugs.
Not only are drug prices too high and their relationship to costs opaque, but there are a lot of potentially very useful substances that don't get investigated because the product would not be patentable.
The, albeit radical, answer is to change we view drug development:
1. All drug research to be done at Universities (almost already there).
2. No patents for drugs. Instead tax all drugs to have development money to be granted to Universities for research.
3. FDA to limit role to ensure purity and accuracy and completeness of information distributed with drugs.
35
Why does the NY Times persist in selecting these sorts of completely inaccurate comments in stories and op-eds on drug development?
"1. All drug research to be done at Universities (almost already there)." - Repeating the myth that pharmaceutical companies don't really do any research or discover anything and just sponge off of NIH funded university research. Having worked in both academia and drug development I can tell you drug development is an extremely challenging set of specialties and almost none of it is done or even taught at universities. NY Times, please stop perpetuating this particular myth by making it a "NYT Pick."
"2. No patents for drugs. Instead tax all drugs to have development money to be granted to Universities for research." - So, some entity is going to develop a drug, publish the structure and just let anyone on the planet manufacture and sell it? That's what no patents means. Can I copy an iPhone and sell that? Also, which politicians or government entities will decide which diseases merit drug development funding? When State U spends the tens of millions granted to find a drug for disease X and it fails or kills someone, what do you tell taxpayers? I can see the Congressional hearings now.
"3. FDA to limit role to ensure purity and accuracy and completeness of information distributed with drugs." - so no need to prove efficacy or safety? just leave it up to whoever it is that made the drug to claim it works and it's safe? Is there any other product on the planet that you would suggest have no evaluation for safety or that it actually works the way it is claimed to?
While I agree with Dr. Emanuel that drug prices in the US are far too high (I have to buy them too) there is far too much misinformation and lack of understanding of how drug development works. The Times should stop perpetuating the myths and work towards helping readers understand how it really works.
"1. All drug research to be done at Universities (almost already there)." - Repeating the myth that pharmaceutical companies don't really do any research or discover anything and just sponge off of NIH funded university research. Having worked in both academia and drug development I can tell you drug development is an extremely challenging set of specialties and almost none of it is done or even taught at universities. NY Times, please stop perpetuating this particular myth by making it a "NYT Pick."
"2. No patents for drugs. Instead tax all drugs to have development money to be granted to Universities for research." - So, some entity is going to develop a drug, publish the structure and just let anyone on the planet manufacture and sell it? That's what no patents means. Can I copy an iPhone and sell that? Also, which politicians or government entities will decide which diseases merit drug development funding? When State U spends the tens of millions granted to find a drug for disease X and it fails or kills someone, what do you tell taxpayers? I can see the Congressional hearings now.
"3. FDA to limit role to ensure purity and accuracy and completeness of information distributed with drugs." - so no need to prove efficacy or safety? just leave it up to whoever it is that made the drug to claim it works and it's safe? Is there any other product on the planet that you would suggest have no evaluation for safety or that it actually works the way it is claimed to?
While I agree with Dr. Emanuel that drug prices in the US are far too high (I have to buy them too) there is far too much misinformation and lack of understanding of how drug development works. The Times should stop perpetuating the myths and work towards helping readers understand how it really works.
3
This approach is in the right direction but perhaps have the funder of research own the rights (the NIH) and then license production of new drugs to multiple manufacturers so the drug would be priced as a generic from day one. Taxing drugs would otherwise just increase industry's desire to increase the price. This approach would truly keep the costs down to society and to the consumer..
"1. All drug research to be done at Universities"....Universities do basic research. Basic research is essential and Universities are very good at it. But they can no more do the applied research (discovery, development, and approval), than you can sprout wings and fly.
1
There are laws against Loan Sharking. Making excessive profit out of human illness and miseries should be equally treated.
Even considering the high failure rate of drug development, human testing and final approval for human usage, a guaranteed descent rate of return on investment can be calculated for the Drug Companies.
Prices should be capped at that level for individual drugs which would provide them a reasonable rate of return and maintain enough incentives for the Drug Development.
Development of drugs for rare diseases not having high rate of return due to low volume can be subsidized by the Government to overcome that disincentive.
Because of the unique nature of business the Drug Companies are in, one of their main objective should be human welfare, not just maximizing profit out of human miseries.
Even considering the high failure rate of drug development, human testing and final approval for human usage, a guaranteed descent rate of return on investment can be calculated for the Drug Companies.
Prices should be capped at that level for individual drugs which would provide them a reasonable rate of return and maintain enough incentives for the Drug Development.
Development of drugs for rare diseases not having high rate of return due to low volume can be subsidized by the Government to overcome that disincentive.
Because of the unique nature of business the Drug Companies are in, one of their main objective should be human welfare, not just maximizing profit out of human miseries.
45
So why do your Politicians allow them to do so at your expense? My Countries leaders don't nor do many others, we make sure they look after the people whose best interests they are voted in to represent and act for.
Ask yourselves why your leaders do not and why.
Ask yourselves why your leaders do not and why.
1
The problem is that drugs are not supposed to cure as the author seems to suggest; they are only used to control symptoms.
2
Patent laws, which give a 20-year monopoly, make price gouging possible. They should be adjusted to serve society's interests, providing less time for drugs that aren't priced fairly.
2
I have been buying several of my medications on line from a very efficient Canadian Pharmacy for several years. I pay then less than my co-pay from my drug plan for the exact same drugs.
1
While politicians and greedy ceos & cfos & the Cayman Island leveraged buyout crowd see no problem with replacing Made in America by Americans with Made in China by Communist Chinese partners, they protect prescription drugs from any foreign competition.
Time to clean the American house.
Time to clean the American house.
2
Clearly companies that invest deserve to win a patent and reap the profits that follow. The problem with the cost of drugs is that we have artificial boundaries set up that prevent trade of drugs between countries that removes the great equalizer of free markets. There is always the argument that drugs sold in other countries are not as "safe" and so they should not be imported. But those arguments no longer work when many of the essential drugs used in hospitals are now produced only in India and Turkey. There are two obvious solutions: (i) Impose price controls - require that US prices for drugs should not be higher than the pricing for the same drug in countries with advanced economies and (ii) set up a quasi-public entity supported by the FDA to be set up to monitor imported drugs and arrange for monitoring of drug exporting companies in foreign countries (which is already in place).
2
Your comments only apply to generic drugs. Most of the drugs with huge price tags are under patent.
1
America is in this and so many other regards proof positive of exactly Free Markets are not good let alone great equalisers.
Enjoy your "Freedoms" as we pay less for your drugs and continue to get Paid more and have more benefits for ALL our people than you will ever hope to see or get with your "Free Market "
P.S We pay less than Half for U.S produced Drugs...not any made in India or China. We just aren't so willing to allow your Drug Companies to gouge us as you let them gouge you.
What does that tell you?
Enjoy your "Freedoms" as we pay less for your drugs and continue to get Paid more and have more benefits for ALL our people than you will ever hope to see or get with your "Free Market "
P.S We pay less than Half for U.S produced Drugs...not any made in India or China. We just aren't so willing to allow your Drug Companies to gouge us as you let them gouge you.
What does that tell you?
Disclaimer: I work in the biopharmaceutical, although I strongly believe in a single payer healthcare system. There is a lot we don't see in Dr. Emanuel's piece. First what part of U.S. Healthcare spending do drugs represent? Insurance company expenses? (It is around 10% for drugs and far higher for the insurance companies so even if all drugs were free we would still be "over-paying" compared to other countries.) Second it is interesting that he sites a drug like Opdivo as adding an "average of 3.2 months" but that (willfully?) neglects the fact that patients that respond to that drug live far longer compared those who don't and as oncologists learn how to use Opdivo it will be used a cornerstone therapy leading to....cancer cures. The fact is that pharma industry profits actually do spur invention and innovation that lead to better drugs and in a relatively short period of time (twelve years or even less) those drugs lose their market exclusivity and become far less expensive. I am always amazed that the public and pundits are so focused on the 10% of the healthcare bill rather than 90% which, as Willie Sutton would say is "where the money".
30
(Disclaimer: I also work in the biopharmaceutical industry and I am a proponent of a single-payer system). In addition to what was mentioned above, one should also consider the enormous cost of bringing a drug to the market as well as the risk and cost associated with those drugs than never make to the market, which is the vast majority of drugs in clinical development. Moreover, academic medical centers which, as another reader proposed, should take over drug development, routinely charge exorbitant amounts to enter their patients into clinical trials (tens of thousands per patient), which greatly contributes to the cost of developing these therapies.
All physicians together account for about 6% of US healthcare spending, to add some context to your 10% for drugs.
1
The 10% / 90% is an interesting starting point, but only a starting point.
The difference is that different problems affect different people. Drugs may only make up 10% of the whole pie, but may also be concentrated so that only a small part of all who use healthcare routinely take medication. That is, it can be a small part of the whole pie, and a huge part of the pie for elderly and people with chronic or severe disease. For them, the medication price IS the pie.
We have a lot of issues to address in healthcare, but they net down to the same: how much profit-taking is too much at every level of every piece of the system?
The difference is that different problems affect different people. Drugs may only make up 10% of the whole pie, but may also be concentrated so that only a small part of all who use healthcare routinely take medication. That is, it can be a small part of the whole pie, and a huge part of the pie for elderly and people with chronic or severe disease. For them, the medication price IS the pie.
We have a lot of issues to address in healthcare, but they net down to the same: how much profit-taking is too much at every level of every piece of the system?
Pass Medicare for all. Allow government to negotiate drug prices like any other insurance entity. Eliminate the cap on Social Security to pay for it.
2
> Having the federal government negotiate lower prices for Medicare would most likely drive up prices on the private side as drug companies tried to recoup their “lost” profits.
This makes no sense economically. Why aren't the pharma companies charging as much as possible on the private side right now?
This makes no sense economically. Why aren't the pharma companies charging as much as possible on the private side right now?
1
The pharmaceutical companies are charging as much as possible on the private side now. Apparently, you don't take any meds or you'd know the pain of it. I refilled my generic antihypertensive 30-day Rx the other day that last month I paid $41; this month I was charged $180, an increase of 450%.
1
They probably are. If they are not , it is because the Private side (health insurance Companies) have done what other countries have done and said NO to the ridiculous prices and set price limits.
"lost" Profits? No such thing in Profit before People America...
"lost" Profits? No such thing in Profit before People America...
Dr. Emanuel may be a great oncologist and vice provost, but he apparently doesn't know much about business. Profits are expressed as $, not %. Perhaps he is referring to profit margin? Does he mean net or gross margin? Gross margin simply accounts for the actual expenses incurred in producing the goods or services. For a pharmaceutical, it wouldn't include the costs associated with regulatory approval. An appropriate profit margin varies by industry. In some industries a PM as high as 80% is an appropriate target. Assuming he is referring to gross PM, this means that the expenses associated with producing Pfizer and Merck's drugs account for 5/6 of the price. The remaining 1/6 of the income needs to go to costs not directly associated with production and R&D for future products, not to mention debt service, taxes, depreciation, etc. I'm not saying that drug prices aren't too high, but Dr. Emanuel's analysis is a flawed way to determine this.
1
@Bay Area HipHop San Francisco, CA
I agree with all of your MBA analysis.
But what remains is that all the other countries pay way less for the same drugs than we do.
It is why a lot of us buy our drugs from Canada.
I agree with all of your MBA analysis.
But what remains is that all the other countries pay way less for the same drugs than we do.
It is why a lot of us buy our drugs from Canada.
2
Yes, Yes,Yes.
But Drug prices ARE way too High, what do you suggest or are you going to do about that?
But Drug prices ARE way too High, what do you suggest or are you going to do about that?
1
A few thoughts: It is past the time to correct the egregious mistake made when the government was prohibited from negotiating prices on drugs. What part of that is free enterprise and market driven capitalism? Secondly, it would be interesting to have a closer look at the costs of drug companies. Would it be surprising if the cost of financing the constant multi-billion dollar mergers and acquisitions was far greater than the cost of researching new drugs. I fear we are being duped into believing the cost is in the research. Third, there needs to be greater investigations and reporting on the incredible increases in basic generic drugs (try doxycycline for starters ... there are many, many more) allowed because of minor changes in formula, and pull back the curtain on the fastest growing costs of the health care delivery system in this country. It is shameful.
2
There are many different methods of reducing drug costs. Personally, I would like to see the US government reserve the option of buying out the patent rights on any drugs deemed essential, effective, and where the manufacturer is clearly guilty of price gouging.
But I hold out no hope of any sensible measure being enacted into law until money is taken out of the political process and/or the Citizens United decision is overturned, whether by constitutional amendment or by a future, more sensible supreme court.
But I hold out no hope of any sensible measure being enacted into law until money is taken out of the political process and/or the Citizens United decision is overturned, whether by constitutional amendment or by a future, more sensible supreme court.
2
The buy out idea is interesting, but I worked in research for a major drug company. During the height of the HIV epidemic, many drug companies were reluctant to engage in HIV research precisely because they were concerned that if they discovered a successful drug the government would step in and enforce price controls on it. Best be careful what you wish for.
There are many facets to this problem.
US citizens should not pay far higher costs for drugs than other nationals (including Canadians), especially for drugs developed with substantial contributions to the underlying research paid for by the US taxpayer. The problem is two fold: Americans are paying too much, and all too often residents of other wealthy countries are not paying their fair share.
We need FDA regulation to avoid tragedies like thalidomide given to pregnant women in Europe. But the FDA drug evaluation and review process is sorely in need of reform. It often adds delays and costs that are unnecessary, and which do not enhance safety.
We need drug patent protection, but not the byzantine regulations that allow drug companies to keep generics off the market seemingly indefinitely.
We need to do away with irrational Federal regulations. Asthma inhalers, which may children need to survive, used to be generic and cheap; today they are expensive, because government regulations banned the CFC propellants in the generics (CFC propellants are bad for the ozone layer, but the quantity in asthma inhalers was miniscule and likely insignificant).
And while drug companies need to make profits to survive and develop new drugs, there's no question but that the cost of some drugs is way too expensive, especially since much of the underlying research was likely taxpayer funded. The invisible hand of the market needs a bit of common sense regulatory guidance.
US citizens should not pay far higher costs for drugs than other nationals (including Canadians), especially for drugs developed with substantial contributions to the underlying research paid for by the US taxpayer. The problem is two fold: Americans are paying too much, and all too often residents of other wealthy countries are not paying their fair share.
We need FDA regulation to avoid tragedies like thalidomide given to pregnant women in Europe. But the FDA drug evaluation and review process is sorely in need of reform. It often adds delays and costs that are unnecessary, and which do not enhance safety.
We need drug patent protection, but not the byzantine regulations that allow drug companies to keep generics off the market seemingly indefinitely.
We need to do away with irrational Federal regulations. Asthma inhalers, which may children need to survive, used to be generic and cheap; today they are expensive, because government regulations banned the CFC propellants in the generics (CFC propellants are bad for the ozone layer, but the quantity in asthma inhalers was miniscule and likely insignificant).
And while drug companies need to make profits to survive and develop new drugs, there's no question but that the cost of some drugs is way too expensive, especially since much of the underlying research was likely taxpayer funded. The invisible hand of the market needs a bit of common sense regulatory guidance.
32
You can't prove that people in other countries who pay less for the same drugs are somehow being subsidized by prices in America. Drug companies are making money on drugs in Canada, England, France, Australia, etc. You pay more in the U.S. because there's no reason for prices to come down. There's a difference between making a profit and PROFITEERING. In other countries, drug makers make a profit. In the U.S., they charge whatever the market will bear.
1
No part of medicine should be making anyone millionaires. There is no rational reason that people have come to think charging whatever the market will bear is in any way right or proper.
Here is a simple formula for setting prices on almost anything.
Cost of development/manufacture + 15% profit = cost per dose
Projections of the number of doses that will be sold would also be used to set price and adjust it over time up o down depending on sales.
Once cost of development have been recouped the price should be lowered to cost of manufacture + 15% profit.
This all assumes the drug is actually effective since a lot of stuff gets prescribed because of incentives to docs not because it is the best choice for the patient.
Here is a simple formula for setting prices on almost anything.
Cost of development/manufacture + 15% profit = cost per dose
Projections of the number of doses that will be sold would also be used to set price and adjust it over time up o down depending on sales.
Once cost of development have been recouped the price should be lowered to cost of manufacture + 15% profit.
This all assumes the drug is actually effective since a lot of stuff gets prescribed because of incentives to docs not because it is the best choice for the patient.
"No part of medicine should be making anyone millionaires."...No one is forcing you to pay the price for a recently discovered drug; that is your choice. If you wish to ignore the latest developments and restrict yourself to using older drugs which have already been available for several years, please do so. And by the way, do you really think that no one should become a millionaire if they discover a drug that cures Alzheimer's?
You did not even touch on the disastrous shortages of many medications in this country. There are hundreds of medications in short supply because the greedy people who make them, will not even turn on the machine unless they can get 1,000% profit off of it.
When my father was in the hospital last year, the hospitals ran out of several much needed medications and could not even get them from other hospitals. One medication could only be located at a pharmacy near the state line and my step-mother had to drive there and get it and return while we were sitting in the hospital watching my father wracked with seizures.
The government needs to take over because they can make the medications for a 1/10th of the price and there would not be globs of mold floating in the bottles.
The privatization of anything is always a million times worse for the citizens because privatization has only ONE goal, make some corrupt person rich.
It is time that the US decides which is more important, being a country of the people, by the people and for the people...or a country for rich tyrants only.
When my father was in the hospital last year, the hospitals ran out of several much needed medications and could not even get them from other hospitals. One medication could only be located at a pharmacy near the state line and my step-mother had to drive there and get it and return while we were sitting in the hospital watching my father wracked with seizures.
The government needs to take over because they can make the medications for a 1/10th of the price and there would not be globs of mold floating in the bottles.
The privatization of anything is always a million times worse for the citizens because privatization has only ONE goal, make some corrupt person rich.
It is time that the US decides which is more important, being a country of the people, by the people and for the people...or a country for rich tyrants only.
3
The solution to drug prices is universal health care (a.k.a. big, bad socialized medicine).
Big Pharma may claim that the industry has to put up a lot of money in R&D, but it gets subsidies from the U.S. government. (BTW, the government also gives subsidies to tobacco farmers, and tobacco is supposed to be bad for your health.)
As a shareholder in a pharmaceutical company, I need the company to be profitable. As someone with various chronic conditions (all of which I do not want and none of which are a simple matter of lifestyle choices), I need affordable medicine and medical care. The fact that the same medicines are often available for much less money in Canada, Israel and other countries leads to one conclusion: Americans are being ripped off.
Big Pharma may claim that the industry has to put up a lot of money in R&D, but it gets subsidies from the U.S. government. (BTW, the government also gives subsidies to tobacco farmers, and tobacco is supposed to be bad for your health.)
As a shareholder in a pharmaceutical company, I need the company to be profitable. As someone with various chronic conditions (all of which I do not want and none of which are a simple matter of lifestyle choices), I need affordable medicine and medical care. The fact that the same medicines are often available for much less money in Canada, Israel and other countries leads to one conclusion: Americans are being ripped off.
4
"BTW, the government also gives subsidies to tobacco farmers"...Really? Maybe you could provide a website that substantiates your claim?
Well, not allowing Medicare to negotiate prices shouldn't be a knee jerk response and allowed to continue. Every little $15 billion helps, you know.
And the assumption that controlling what excessive payments Medicare makes would force the drug companies, in their quest for continuing to want 50% profits, to just jack up the prices to private insurers must never have negotiated with private insurers. Their staff can be quite tough to deal with, also.
Start somewhere. Make sure the first steps make sense and begin. Please.
And the assumption that controlling what excessive payments Medicare makes would force the drug companies, in their quest for continuing to want 50% profits, to just jack up the prices to private insurers must never have negotiated with private insurers. Their staff can be quite tough to deal with, also.
Start somewhere. Make sure the first steps make sense and begin. Please.
29
Will Republican Presidential candidates be debating the high cost of drugs when they have their debate later this month? I suspect not. We should all be screaming with rage at the self-serving corruption of these so-called leaders.
2
Republic Presidential debates are more likely to turn their discussion to sanctimonious efforts to defund Planned Parenthood. Forget about the affordable medicine. Forget about affordable healthcare. Pay no attention to the billions of dollars in spent by corporate big business to buy legislation and elections. They'll build their presidential debate on defunding a non-profit community service agency.
2
Mr. Ezekiel writes, "Medicare would have little negotiating leverage since, unlike private insurers, it cannot maintain an approved drug list and exclude overly expensive drugs from coverage.
The bigger problem, though, is that Medicare negotiations would do nothing to contain drug prices for the 170 million Americans who have private health insurance[...]"
Neither of these statements is true. Medicare was specifically prohibited in 2003 under the George W. Bush administration from negotiating drug prices for its "part D." Why? Because pharmaceutical lobbyists knew all too well that Medicare, as the largest insurer, has tremendous clout in determining drug prices.
That is why the 2008 Obama campaign promised to revoke that prohibition. And that is why President Obama, once elected, broke his promise to mollify the pharmaceutical industry.
Why would another insurer pay a higher price than what Medicare reimburses?
And what is to stop Medicare from having an essential drug list? It already does - and e.g. Viagra is not on that list.
Clearly, we need a single-payer health system - Medicare for all - in which Medicare negotiates drug prices.
Lower prices for outrageously priced, widely used drugs like some antihypertensives (blood pressure lowering medications), could even give Medicare the savings to enable it paying for Viagra.
The bigger problem, though, is that Medicare negotiations would do nothing to contain drug prices for the 170 million Americans who have private health insurance[...]"
Neither of these statements is true. Medicare was specifically prohibited in 2003 under the George W. Bush administration from negotiating drug prices for its "part D." Why? Because pharmaceutical lobbyists knew all too well that Medicare, as the largest insurer, has tremendous clout in determining drug prices.
That is why the 2008 Obama campaign promised to revoke that prohibition. And that is why President Obama, once elected, broke his promise to mollify the pharmaceutical industry.
Why would another insurer pay a higher price than what Medicare reimburses?
And what is to stop Medicare from having an essential drug list? It already does - and e.g. Viagra is not on that list.
Clearly, we need a single-payer health system - Medicare for all - in which Medicare negotiates drug prices.
Lower prices for outrageously priced, widely used drugs like some antihypertensives (blood pressure lowering medications), could even give Medicare the savings to enable it paying for Viagra.
39
I say "Single payer today. Single payer tomorrow. Single payer forever.
We do not need nor deserve a private industry bureaucrat in a drug or insurance company primarily motivated by financial corporate plutocrat oligarch wealth enhancement to stand between a health care professional and patient receiving the right to a minimal level of reasonable affordable health care. Instead of as a privilege.
We do not need nor deserve a private industry bureaucrat in a drug or insurance company primarily motivated by financial corporate plutocrat oligarch wealth enhancement to stand between a health care professional and patient receiving the right to a minimal level of reasonable affordable health care. Instead of as a privilege.
One simple first step (partial solution) would be to prohibit pharmaceutical sales to other developed countries at less than 90% of what medicare pays. I find the idea of recouping all the R&D in the U.S. most silly.
Combine that with the revocation of the prohibition of Medicare negotiating prices and see what happens.
Then prohibit big pharma's expensive and insulting marketing practices. It's fixable if we find the political will.
Combine that with the revocation of the prohibition of Medicare negotiating prices and see what happens.
Then prohibit big pharma's expensive and insulting marketing practices. It's fixable if we find the political will.
Profit is not defined in this article. Making an 18% return on investment is not so excessive in a high risk venture. Otherwise the owners would be better off investing their capital elsewhere. The lower prices paid for drugs in other developed countries means that the US is subsidizing the drug industry, often foreign owned. It is time for the public to demand that our politicians regulate drug prices to levels comparable to Canada, Germany et al if this means that prices go up elsewhere so be it. I do not hear a peep from the current crop of presidential candidates on this subject - which should be more of concern to folks, particularly seniors, than, say, Clinton's e-mails. A trade-off to the drug companies for lower prices could be things like extending patent protection, tax credits for research etc which factor into return-on-investment calculations.
2
The unregulated free market does not serve the public's interest in this case. The major drug companies always show a profit and have no real risk of loss over the long term. In spite of this, Pfizer as example, even after losing exclusivity on their most profitable drugs, over 2013 and 2014 spent $15 billion on research and development while returning $34 billion to shareholders and spending $28 billion on sales and marketing. Drug development and research costs as explanation of high cost of drugs is a diversionary argument.
27
Lobbying for healthcare products needs to be made illegal. Certain vital products nad services simple need to be regulated by the common interest rather than the greed for more profit that is inherent in capitalism.
3
How much do the pharmaceutical companies make due to their crummy ads on television. When I visited my daughter in Germany it was refreshing not to see any drug commercials.
When I see my physician at the hospital the pharmaceuticals are ever present laying out their very generous lunches.
When I see my physician at the hospital the pharmaceuticals are ever present laying out their very generous lunches.
3
My personal impression of Drug Company executives is one of sociopaths in three piece suits. I take a prescription on a very regular basis, it is made from tree bark and introduced to us by Native Americans. It used to cost very little. Then, one drug company bought the right to manufacture this particular drug from the other drug manufactures and jacked the price through the roof. It's a heinous act that borders on criminal in my opinion. If it wasn't for the VA Hospital and the vastly reduced price I would be physically crippled and, by the way, since I would be unable to work I would be paying much less in taxes or worse, a ward of the State.
52
Too many fingers in the pie; too much greed.
1
Many if not most countries have mandatory price negotiation medications in general, not just those sold to individuals covered by health plans. As an example:
I use the generic form of Lunesta to sleep. It is a a racemic mixture of two isomers of zopiclone, one active, the other not. Its US maker managed to isolate the active component, es-zopiclone, and obtain a patent on it -- and by some quirk in the law, effectively extend the patent on the parent Lunesta.
The net result: I can obtain zopiclone elsewhere with a three month supply costing me less that just the Medicare copay for just one month's es-zopiclone here! The generic non-patent zopiclone is available in literally every country in the world at that price -- except the US.
Government negotiation of drug prices -- even by Medicare, who is paying for them -- is literally illegal here. Only here.
US Big Pharma has Congress -- both houses, and (mark you) both political parties -- in their pockets. Their very deep pockets.
I use the generic form of Lunesta to sleep. It is a a racemic mixture of two isomers of zopiclone, one active, the other not. Its US maker managed to isolate the active component, es-zopiclone, and obtain a patent on it -- and by some quirk in the law, effectively extend the patent on the parent Lunesta.
The net result: I can obtain zopiclone elsewhere with a three month supply costing me less that just the Medicare copay for just one month's es-zopiclone here! The generic non-patent zopiclone is available in literally every country in the world at that price -- except the US.
Government negotiation of drug prices -- even by Medicare, who is paying for them -- is literally illegal here. Only here.
US Big Pharma has Congress -- both houses, and (mark you) both political parties -- in their pockets. Their very deep pockets.
65
Another aspect of this issue -- the near nonstop pharmaceutical advertising that creates and artificially inflates demand for drugs. Decades ago, we didn't have this wall-to-wall drug company advertising around the evening news and drug pricing seemed more rational.
2
"The business of America is business." - Calvin Coolidge
Sorry, Americans may be fed up with high drug prices, but they're not sufficiently fed up with their corrupt, big business-controlled government to do anything about it. Instead, this nation of sheep lets itself be preyed upon by manipulative fearmongers. "What's the matter with Kansas" is what's the matter with the United States.
Sorry, Americans may be fed up with high drug prices, but they're not sufficiently fed up with their corrupt, big business-controlled government to do anything about it. Instead, this nation of sheep lets itself be preyed upon by manipulative fearmongers. "What's the matter with Kansas" is what's the matter with the United States.
3
"Everyone, including drug company executives, believes that high prices cannot continue."
So these executives will come up with schemes that minimize their profit loss, but never giving up the immense and easy profits from Medicare not being able to negotiate prices. (More like $116 Billion over 10 years) Instead come up with solutions that please Conservatives (i.e. the protectors of the profit system) and have someone who is not directly employed by the drug companies minimize the Medicare solution in an article printed in some prestigious journal.
So these executives will come up with schemes that minimize their profit loss, but never giving up the immense and easy profits from Medicare not being able to negotiate prices. (More like $116 Billion over 10 years) Instead come up with solutions that please Conservatives (i.e. the protectors of the profit system) and have someone who is not directly employed by the drug companies minimize the Medicare solution in an article printed in some prestigious journal.
There is an easier way! We should just limit patent protection to 2 years instead of 7. Most of the money spent on R&D is actually spent by taxpayers, not drug companies. Many 'new' drugs are simply reformulated versions of existing drugs, so no need for patent protection here, either. If you are worried that this will remove the incentive to develop new drugs, consider the fact that many of the new drugs we get don't increase quantity and/or quality of life all that much.
1
I got a prescrition for Talconex, for skin psoriasis. My insurance company doesn't cover it. It is $1,000. for a small bottle. Generic is $500. The company gives a rebate which bring it down to $250. There is something wrong here, very wrong.
3
Medicare "cannot negotiate with companies for lower drug prices". Is this not an explicit example of government (i.e., Congress) interfering in the "free market" which most Republicans find objectionable?
49
Switzerland's drug giants make their money out of Switzerland where they increasingly also do their research. Australia does not have a drug industry to speak of so they can squeeze them without any repercussion. It takes the same money to get a drug on the market that targets a niche as one that targets a mass market like Diabetes. Most of the mass markets like allergy or heart disease have good generic drugs which are hard to beat. Nobody pays for Keytruda or Opdivo out of their own pockets. Think of the high drug prices as a tax that funds one of the bright spots in the US Industry, our pharma R&D prowess. Germany is a cautionary tale of drug price controls which pioneered Drug R&D but today does not boast a single major drug maker. I am more than happy to treat my fungal toenails for $ 20,000 a year with Jublia a new drug with 15 % success rate and stick express-scripts with the bill. It may not cure my nails, but it will entice another drug maker to develop a better new drug 2 years down the road which will. Aren't we better off with drug R&D than developing the latest stealth fighter that stirs the middle-eastern witches brew?
The most inportant and potent solution not mentioned by the author is the elimination of all medical benefits to legislators immediately after their term in office or within a few years thereof and benefits comparable to the average person's benefits while in office.
5
Why not ban prescription drug advertising? When watching TV, count how many commercials for them you see in any given hour. All that advertising cost comes out of profits.
A few years ago, I came across a statistic that drug companies spend $8 billion a year just marketing to doctors. That needs to stop too. The drug companies have turned doctors into their enablers. Pills, pills and more pills. Everyone is hooked on taking at least one drug everyday for this or that instead of getting rid of the this or that. Then you take a pill to counter the effects of the first one.
Is all this pill taking really necessary? Does it really improve health? Or does it just make money for the drug companies?
Many highly essential and absolutely necessary vaccines and drugs are only made overseas because there isn't enough profit in them to bother with. This is an national security issue.
True, the drug companies spend tons of money on research, but that research is done to maintain and grow profits. If they weren't trying to grow the bottom line, they would not have to spend so much on fruitless research. Then they wouldn't have to charge so much for their other drugs.
We have doctors who have to prescribe the latest an greatest instead of the old standby which works 98% as well and costs $20 a month. Are these tiny increments in results worth spending 20 (or 200) times as much? Health conflicts with marketing once again. It always does.
A few years ago, I came across a statistic that drug companies spend $8 billion a year just marketing to doctors. That needs to stop too. The drug companies have turned doctors into their enablers. Pills, pills and more pills. Everyone is hooked on taking at least one drug everyday for this or that instead of getting rid of the this or that. Then you take a pill to counter the effects of the first one.
Is all this pill taking really necessary? Does it really improve health? Or does it just make money for the drug companies?
Many highly essential and absolutely necessary vaccines and drugs are only made overseas because there isn't enough profit in them to bother with. This is an national security issue.
True, the drug companies spend tons of money on research, but that research is done to maintain and grow profits. If they weren't trying to grow the bottom line, they would not have to spend so much on fruitless research. Then they wouldn't have to charge so much for their other drugs.
We have doctors who have to prescribe the latest an greatest instead of the old standby which works 98% as well and costs $20 a month. Are these tiny increments in results worth spending 20 (or 200) times as much? Health conflicts with marketing once again. It always does.
37
Ah, yes, the TV drug commercials with their upward spiraling negative side effects, more and more serious, frequently ending in death. Reminds me, again, of the battery commercial that spoofed these drug commercials. It was discontinued after a very short run, probably bought out by drug companies. The last two side effects were, as I recall, "your heart may suddenly explode out through your chest wall and your children may be born with the head of a golden retriever."
The first time it was on I wasn't paying attention and wasn't sure I heard what I heard. The next time I listened carefully. Yup. It said that. And then it was gone.
The first time it was on I wasn't paying attention and wasn't sure I heard what I heard. The next time I listened carefully. Yup. It said that. And then it was gone.
1
It is quite typical for drugs to cost less in smaller countries as long as US insurance companies are paying full freight. Drugs that treat genetic diseases, such as Gaucher, while very expensive, may have only a small number of patients under treatment. So the total cost to the healthcare system as a whole is rather minimal, but the impetus for another company to produce a competitive version is also minimal.
The Swiss system of paying only for proven effective drugs seems preferable to the Australian alternative. Having both makes sense.
The Swiss system of paying only for proven effective drugs seems preferable to the Australian alternative. Having both makes sense.
As an Opdivo ($140,000 per year) late-stage lung cancer user with 3.2 extra months to live, I should be grateful for the added time and United Health, my insurer, also grateful for the relative short duration of the non-cure offered by Opdivo. Win/win, all around.
2
when the focus of the system is designed to improve patient health and consumer satisfaction, instead of maximizing profits for corporate shareholders perhaps we will see fairer pricing. i look forward to the day when "people are corporations too."
37
In most of the rest of the world, if they had a pre ACA Republican plan the officials would be thrown in jail. In some countries like China they might be executed.
Here, The Republicans let these HMO types make billions of dollars and laud the great work they are doing...
The only word for this is...criminal....
Here, The Republicans let these HMO types make billions of dollars and laud the great work they are doing...
The only word for this is...criminal....
2
Yeah, but the executives of the drug companies in those countries don't have to make huge investments in buying politicians, who are getting more expensive every day!
Sheesh!
Sheesh!
2
You can add Canada in there who are leading the world re prescription drug policy.
Do anything...from Aust. to Swiss....anything.... even Rwanda who just killed two million people has a better medical/drug plan than us, even Haiti who practices voodoo.
Anything is better than going back to or listening to the Republican de facto criminal plan or be rich or don't have a bad life event...re medical plan/prescription drugs..
Do anything...from Aust. to Swiss....anything.... even Rwanda who just killed two million people has a better medical/drug plan than us, even Haiti who practices voodoo.
Anything is better than going back to or listening to the Republican de facto criminal plan or be rich or don't have a bad life event...re medical plan/prescription drugs..
3
The flaw in drawing a conclusion about the 'unreasonable' cost of therapy with Opdivo when it 'adds an average of 3.2 months of life to lung cancer patients' is that any drug that improves survival in that disease setting is huge given the historical failure of all therapies in that setting. And undervaluing support for drugs that provide incremental improvements against incurable diseases will kill off further exploration in those settings.
Here's another solution. Most highly innovative drugs are not invented by drug companies these days. They are invented by academics working in universities, medical schools, and research institutes. These non-profit institutions own the rights to the inventions made by their employees. They license out the rights to drug companies. In most cases, the institutions get a small fraction of the profits made from the inventions. Why don't those non-profit institutions include caps on the costs to patients of the treatments made from their inventions? If the treatments are really block-busters, the drug companies will agree to those terms. Or, perhaps better, why don't the non-profit institutions start their own drug companies? They can seek capital from their large donors and then, if the drug is successful, keep more of the profits to fund their truly ground-breaking research and still charge patients a lot less. Most drug development work can be done on a contract basis now anyway, from the manufacturing done by the large generics companies (who also are increasingly developing biologics capabilities) to the clinical trials work done by contract research organizations, so the research institutions wouldn't have to develop a large infrastructure. In fact, many smaller drug companies are essentially "virtual" drug companies, composed largely of marketing organizations.
28
" Most highly innovative drugs are not invented by drug companies these days. They are invented by academics working in universities, medical schools, and research institutes."...Please provide one example. Universities, Medical Schools, and Research Institutes, generally engage in basic research. And while basic research is an essential foundation, these institutions are not even remotely capable of doing the applied research necessary for producing a functional drug. The research generated by Universities, Medical Schools, and Research Institutes, is to be sure very important, but the idea that they are somehow fundamentally responsible for new drugs is a myth.
I see some interesting solutions in this article. But as a starting point Medicare should be allowed to negotiate prices. I am sure other large drug providers (CVS Caremark & Medco) would also jump on the bandwagon. Unless you are getting huge donations from drug companies, I cannot see why any politician would vote against allowing (forcing) Medicare to negotiate drug prices. There maybe followon steps needed, but this would be a good start.
3
Most of the real research comes from government grants. The drug companies should be nationalized, drug research focused on cures and not profits, and drug patents granted contingent on fair pricing.
A human being life should not be correlated on their ability to pay. The current "system" is Medieval. Profit, is the poorest incentive for new drug discovery.
A human being life should not be correlated on their ability to pay. The current "system" is Medieval. Profit, is the poorest incentive for new drug discovery.
2
Government should a limit on profits for drug companies and establish a one price fits all. If they don't comply the patents will not be protected. Our government should be in the business of protecting its citizen, not corporations. There was a time in America when corporations were to be a service to the people and country and officers would face criminal charges and companies would be closed if they violated public trust or did harm. this may not be a conspiracy I do believe that the greed for profits and power focuses away from actually practicing moral values.
Some think that America has low taxes compared to other developed countries, but when you look at all of the hidden costs and price gouging we are paying more for product and services that most any other country. I think that Trump is right we, the American people who foots the bill, gives till it hurts and get nothing in return, but lies, misdirection and poorer.
Some think that America has low taxes compared to other developed countries, but when you look at all of the hidden costs and price gouging we are paying more for product and services that most any other country. I think that Trump is right we, the American people who foots the bill, gives till it hurts and get nothing in return, but lies, misdirection and poorer.
3
"WE’RE paying too much for prescription drugs."
Probably.
However, that's how capitalism works.
The people who invent and sell a unique product that people think will keep them from dying (it won't; we all still die), or to get an erection (that is something to die for) can demand their own price.
After all, in U.S. medicine ONLY profits matter. EVER.
And the second fact that is missing is that, "WE'RE taking too many prescription drugs."
I am fortunate to not have a lot of serious medical problems. My wife is less fortunate that I. However, my wife is fortunate that for most of her problems her Oriental Medicine doctor actually does have better and cheaper treatment options available that does Big Pharma.
Probably.
However, that's how capitalism works.
The people who invent and sell a unique product that people think will keep them from dying (it won't; we all still die), or to get an erection (that is something to die for) can demand their own price.
After all, in U.S. medicine ONLY profits matter. EVER.
And the second fact that is missing is that, "WE'RE taking too many prescription drugs."
I am fortunate to not have a lot of serious medical problems. My wife is less fortunate that I. However, my wife is fortunate that for most of her problems her Oriental Medicine doctor actually does have better and cheaper treatment options available that does Big Pharma.
1
I usually like to remain optimistic in the face of adversity, however, when it comes to Pharmaceutical Companies, my optimism quickly fades into the sunset. Many pharmaceutical companies do not offer generic alternatives, therefore, driving the cost of a drug up astronomically.
I personally had this experience, fighting the pharmaceutical company for eight months, and now have the drug shipped, free of charge, with no co-pay involved. It was stressful, and became a part-time job, but worth it in the end. The moral of this story, isn't one of fighting the pharmaceutical companies, but one that should never happen to begin with. The core of the money issue related to drugs, is just that...money.
The suggestion of finding a "comprehensive solution" in regard to the issue of high costs of drugs, anytime in the near future, is nothing more than a pipe dream.
I personally had this experience, fighting the pharmaceutical company for eight months, and now have the drug shipped, free of charge, with no co-pay involved. It was stressful, and became a part-time job, but worth it in the end. The moral of this story, isn't one of fighting the pharmaceutical companies, but one that should never happen to begin with. The core of the money issue related to drugs, is just that...money.
The suggestion of finding a "comprehensive solution" in regard to the issue of high costs of drugs, anytime in the near future, is nothing more than a pipe dream.
1
One of the problems is that consumers in the US are funding the costs of pharmaceutical R&D for the rest of the world. Countries that aggressively negotiate prices know that if a drug company can cover its costs of R&D elsewhere, they will still make money if they can sell a drug for something more than just its cost of production.
My solution is that pharmaceutical companies should not be allowed to charge more for a drug in the US than anywhere else in the world - with a 10% margin to allow for currency fluctuations and a carve-out for critical drugs sold to lesser developed countries. That would end the US subsidy of drug costs in other developed countries.
My solution is that pharmaceutical companies should not be allowed to charge more for a drug in the US than anywhere else in the world - with a 10% margin to allow for currency fluctuations and a carve-out for critical drugs sold to lesser developed countries. That would end the US subsidy of drug costs in other developed countries.
1
Motto of the American drug industry: "Your money or your life!"
2
No one is pointing a gun at your head and making you pay. It is your choice; just like buying a new car, or paying for cable TV.
sorry there are many errors in the reasoning in this article. Drug cost are out of control because the Pharm. companies can charge whatever they like for a drug. Someone has been drinking the cool aide. The old story of the high cost of research has been used too often and proven untrue so often that its a sick joke.
Look at the cost of the drugs that have been available for 60 years. Its robbery.
A de-wormer that cost 5 cents, yes 5 cents a pill in the rest of the world cost $100 a pill in the USA. A drug thats been available for 30 yrs. Look at the cost of valium again robbery.If the cost for all the common drugs were reasonable than medicare and insurance companies could afford to cover the price of these very expensive drugs.
So how about some investigative reporting on the issue.Please I remember real journalism where with hard work a great reporter wrote the t truth and companies were made to change.
The salaries of CEO of Pharm companies are some of the highest in this country.Meanwhile people die because they can't afford medicine that would be quite reasonable in other countries. We don't need to re-invent the wheel .
The Pharm companies are no different than the big banks, they will get the money anyway they can as long as we let them rob us they will.
Look at the cost of the drugs that have been available for 60 years. Its robbery.
A de-wormer that cost 5 cents, yes 5 cents a pill in the rest of the world cost $100 a pill in the USA. A drug thats been available for 30 yrs. Look at the cost of valium again robbery.If the cost for all the common drugs were reasonable than medicare and insurance companies could afford to cover the price of these very expensive drugs.
So how about some investigative reporting on the issue.Please I remember real journalism where with hard work a great reporter wrote the t truth and companies were made to change.
The salaries of CEO of Pharm companies are some of the highest in this country.Meanwhile people die because they can't afford medicine that would be quite reasonable in other countries. We don't need to re-invent the wheel .
The Pharm companies are no different than the big banks, they will get the money anyway they can as long as we let them rob us they will.
2
Any solution driven by government, bureaucrats or politicians will be one that serves the interests of those three forces. Do you really want that?
But we are so far removed from a healthy free market where decisions are made by the melding of the interest of millions not driven by the special interests of a few that we are now choosing among best worst options.
Any solution offered that strengthens market forces over political special interest, to include business gaming of the politician, will bring better results.
But we are so far removed from a healthy free market where decisions are made by the melding of the interest of millions not driven by the special interests of a few that we are now choosing among best worst options.
Any solution offered that strengthens market forces over political special interest, to include business gaming of the politician, will bring better results.
All the more reason to implement single payer healthcare in this country. A single payer -- the government -- could better negotiate with healthcare providers, pharmaceutical and biotech companies. It wouldn't be a perfect system, but at least we could ensure all citizens have access to adequate healthcare without going bankrupt. It would also allow the pharma and biotech industries to operate as they already do, but the people would have the purchasing power necessary to reign in drug costs.
If the freedom to negotiate via Medicare would have the unintended consequence of then driving up costs for private insurers to compensate for the loss of profits , what is the logical solution to this? Single payer health delivery system. In this country the private and public sector are totally intertwined, so it does not matter who runs it - just make it simple and able to solve such things as 'competition' between various groups who push drugs. It will never happen given the profit motive of pharma and all other health care providers. Why write this article? There is no solution.
"Currently, while Medicare tells hospitals and doctors what it will pay for services, by law it cannot negotiate with companies for lower drug prices."
The corrupt George W. Bush administration just keeps on giving......
The corrupt George W. Bush administration just keeps on giving......
1
I run a medical research lab where we are looking for safer, cheaper and more effective alternatives to pharmaceuticals for the treatment of brain and mental illness. Its been difficult to find NIH funding for our work, and frustrating to see how much money NIH and the government pours into big pharma at the same time. They get all the government money, and take even more from the private sector, leaving very little to develop better alternatives.
What nobody talks about is the pressing need to develop less expensive forms of health care. Doctors can only use the tools they are given, and NIH funds the development of many of those tools. NIH should be on the forefront of this, rather than supporting pharmaceutical development and other expensive forms of health care. The $2.7 Trillion we spend for health care might be greatly reduced if the NIH funding decision process was required to fund the best projects that would also reduce this cost. This would reduce the deficit, and help to accelerate research into the safest ways to end disease and extend the period of our lives that's worth living.
What nobody talks about is the pressing need to develop less expensive forms of health care. Doctors can only use the tools they are given, and NIH funds the development of many of those tools. NIH should be on the forefront of this, rather than supporting pharmaceutical development and other expensive forms of health care. The $2.7 Trillion we spend for health care might be greatly reduced if the NIH funding decision process was required to fund the best projects that would also reduce this cost. This would reduce the deficit, and help to accelerate research into the safest ways to end disease and extend the period of our lives that's worth living.
47
If the giveaways to Big Pharma through no Medicare price negotiations were eliminated, doesn't it stand to reason that a major decline in price would also put pressure on the private insurers to lower prices? A major price adjustment at that scale doesn't happen in a vacuum.
If Don Trump is so hot to eliminate the carried interest loophole giveaway, let's hear him and all the rest of the candidates, regardless of party, comment on that disgraceful aspect of the Part D program.
If Don Trump is so hot to eliminate the carried interest loophole giveaway, let's hear him and all the rest of the candidates, regardless of party, comment on that disgraceful aspect of the Part D program.
3
Dr. Emmanuel writes "High prices cannot continue."
Why not? What's going to stop this? We had 40-50 years of people with pre-existing conditions totally shut out of the insurance market. That could and did continue for decades - plenty long enough to cripple, kill or bankrupt millions of people.
What's going to change this now?
Why not? What's going to stop this? We had 40-50 years of people with pre-existing conditions totally shut out of the insurance market. That could and did continue for decades - plenty long enough to cripple, kill or bankrupt millions of people.
What's going to change this now?
3
Although this author, like many others in the recent past, makes a strong case that something must be done to bring some semblance of rationality to drug prices, in the foreseeable future the simple fact that almost all Congressional Republicans are beholden to the drug lobby makes any meaningful change essentially impossible. Controlling drug prices is a political problem not a medical one.
1
Unfortunately, Democrats are responsible for this problem too. The Medicare Part D law was voted into law by both Republicans and Democrats. And throughout the years, both Republicans and Democrats have failed to deal with this issue. When you get right down to it it's all about the corrupting influence of corporate money in politics. Until we get a handle on that none of this nonsense will change.
1
Even with a so-called prescription plan, I can't possibly afford the drugs I need to control my cholesterol (I'm allergic to most of them) or psoriatic arthritis - which will continue to worsen and cripple me because I don't have $20,000 a year for injections but you know, so what? Drug company profits are so important....
The presidential candidate with a conscience who vows to take this mess on and fix it would win in a landslide.
Elizabeth Warren, we dream about you at night.
The presidential candidate with a conscience who vows to take this mess on and fix it would win in a landslide.
Elizabeth Warren, we dream about you at night.
52
There is no question that drugs, when valuable, can be life-savers. These must be paid for by the public, hopefully via government or health insurers or some other mechanism that is fair and sustainable. But gouging? Are they crows?
2
the author doesn't acknowledge that US overpayment for drugs is what enables the drug companies to make profits while other countries pay less. Its like a poker game where everyone can win as long as there is at least one dumb and wealthy player to win off. If the USA were to change the whole system that everyone else feeds off would fall apart.
7
@ Paul
No the system wouldn't fall apart. The notion that Novartis, GSK, AZ or Pfizer say, make no profits from the drugs they sell in Europe is somewhat unrealistic. Drug company profits would shrink (they are enormous) and other users in Europe and elsewhere would probably see a modest uptick in their prices but the global pharmaceutical industry is not going to fall apart because the US takes a more aggressive approach to containing the cost of drug expenditures.
No the system wouldn't fall apart. The notion that Novartis, GSK, AZ or Pfizer say, make no profits from the drugs they sell in Europe is somewhat unrealistic. Drug company profits would shrink (they are enormous) and other users in Europe and elsewhere would probably see a modest uptick in their prices but the global pharmaceutical industry is not going to fall apart because the US takes a more aggressive approach to containing the cost of drug expenditures.
10
Drug companies make something like 30% of all their profits in one single country -- the USA. Even Andrew Witty, CEO of GSK realizes that that is not going to be sustainable forever. As a result, he is selling off his high-end oncology drugs and loading up on vaccines. Even if the US is crazy enough to allow drug companies to bled them forever, eventually the host is bled dry.
1
@ Jersey Mom
So if your number is correct they make the other 70% of their profits (i.e the majority) elsewhere. No one disputes the US is both a huge market for healthcare and very profitable for ALL it's participants who include drug companies; and that efforts should be made to contain the inflated drug prices the US is stuck with because of Republican written legislation. But even if the share of their profits from the US was halved to 15% they are not going to fall apart. They'd just adjust their business models to take account of the shift in returns. You'd probably see a lot less drug advertising while watching the evening news.
So if your number is correct they make the other 70% of their profits (i.e the majority) elsewhere. No one disputes the US is both a huge market for healthcare and very profitable for ALL it's participants who include drug companies; and that efforts should be made to contain the inflated drug prices the US is stuck with because of Republican written legislation. But even if the share of their profits from the US was halved to 15% they are not going to fall apart. They'd just adjust their business models to take account of the shift in returns. You'd probably see a lot less drug advertising while watching the evening news.
2
Value and benefit would be the key drivers of price in a perfect world, whether this was determined by big scary Government - as those on the Right would fear, or evil-doer Insurance/Pharmacy Managers as those on the Left would protest. Regardless of one's fear of intrusive Government or Capitalism run amok, it's important to note that Insurers/Pharmacy Managers are demanding lower prices through competition. For example, Opdivo from Bristol Myers Squibb costs 150,000, but so does it's rival drug Keytruda from Merck, and a newer drug in the same class from Roche that is also showing promise will add a third competitor to the market (albeit slightly different mechanism of action). These similar class drugs are likely to compete for the same pool of patients, and by forcing a bidding war for exclusivity, Insurers/Payers may eventually help reduce the asking price. Not the only solution to the Price problem, but something to be aware of.
2
Dr. Emanuel's column was difficult for me to understand today for one reason: I couldn't distinguish between the two options he was suggesting. Both seemed to involve a central clearinghouse that would establish prices. The only difference seems to be the basis on which the prices would be set.
While I think this would be a splendid idea for the United States and would, indeed, control our astronomical prescription drug prices, I have a hard time believing it could work under our current private healthcare, not to mention political, system.
We have so many people shouting that Obamacare is socialized medicine - which of course it's anything but. How would we accomplish a prescription drug scheme that actually does involve the government, or group sanctioned by the government, setting the prices? As much as I'd like the see it happen, I think it's something that's possible only in my children's lifetime, but not mine.
While I think this would be a splendid idea for the United States and would, indeed, control our astronomical prescription drug prices, I have a hard time believing it could work under our current private healthcare, not to mention political, system.
We have so many people shouting that Obamacare is socialized medicine - which of course it's anything but. How would we accomplish a prescription drug scheme that actually does involve the government, or group sanctioned by the government, setting the prices? As much as I'd like the see it happen, I think it's something that's possible only in my children's lifetime, but not mine.
4
Actually, if we elected a Congress that was committed to solving the problem, it could be passed and functioning in two or three years. Nitwit Nebraska voters that elect people like Sen. Sasse and Sen. Fischer that oppose everything won't be contributing to that remedy, of course. We have to hope that people outside the "dead zone" send more responsible legislators to Congress.
1
Would something like the Swiss system drive up the prices of effective generics? Those prices recently have increased to absurd levels, in the US-- almost as high as those of brand named drugs (obviously not due to R&D costs!).
And we must remember that drug companies and intermediary suppliers, right down to major pharmacy chains have astronomical executive salaries and benefits and retirement packages--costs of which are not included in the "profit" stats.
And we must remember that drug companies and intermediary suppliers, right down to major pharmacy chains have astronomical executive salaries and benefits and retirement packages--costs of which are not included in the "profit" stats.
5
There is no excuse for the high price of generics as they are not under patent and are therefore available to any drug company that might choose to make them. Further, making generic drugs does not involve the heavy expense of discovery, development, or approval. It follows that the price should be adequately controlled by a competitive market place. If/when this doesn't happen it is time to investigate collusion.
1
When you take all considerations and arguments into into account, if the solution to too high drug prices lies in federal legislation that will be blocked so long as the GOP control Congress or can stop legislation by political trickery. Our present law preventing Medicare from bargaining for drug prices was a big wet Republican kiss to big farma. Obama should have slipped reform into the ACA which passed with no Republican votes, before Ted Kennedy died. .
7
"maximize profits while they can"
And, as long as we continue to have the best Congress money can buy, these high prices will continue.
Only in America.
And, as long as we continue to have the best Congress money can buy, these high prices will continue.
Only in America.
11
It would be interesting to know what private health insurance companies are actually paying for these expensive drugs. Except for Medicare, the list price of a drug is different than what most insurance companies pay for them. Maybe it is Medicare that distorts the drug prices. I believe market based "value" is being used to set the actual negotiated prices of drugs between private insurance companies and the pharmaceutical companies. Can that system be improved --of course.
1
Many commenters here have given in to despair. They say the pharmaceutical industry is too powerful and cannot be crossed. But other countries have done it. No, they are probably not the hyper-charged capitalistic Wild West that we are, but they have done it. My impression is that we have nearly the highest drug prices in the developed world. And we think we're the greatest country in the world, which is untrue by many measures.
But we don't really know what drug prices are here. It's a secret. It's like going into a casino where they hide the clocks. We're gambling with our money and our lives. You don't know how much the drug is going to cost. You don't know if it's going to work. And sometimes doctors either don't know that it will only extend life 3 months (maybe) or they don't care that it's an exorbitant price for that small benefit. When almost all research is funded by drug companies, we don't even know whether we should believe the scientific articles about how well a drug works.
This system is absolutely insane and people are dying because of it. They're dying because they can't afford drugs and don't take ones that they need. Some are dying because they take drugs that are actually harmful. Some die because of drug interactions or side effects that are not studied thoroughly. Our system is incentivizing fraud.
The government should cut benefits to the drug industry, impose price controls and go back to funding research itself.
But we don't really know what drug prices are here. It's a secret. It's like going into a casino where they hide the clocks. We're gambling with our money and our lives. You don't know how much the drug is going to cost. You don't know if it's going to work. And sometimes doctors either don't know that it will only extend life 3 months (maybe) or they don't care that it's an exorbitant price for that small benefit. When almost all research is funded by drug companies, we don't even know whether we should believe the scientific articles about how well a drug works.
This system is absolutely insane and people are dying because of it. They're dying because they can't afford drugs and don't take ones that they need. Some are dying because they take drugs that are actually harmful. Some die because of drug interactions or side effects that are not studied thoroughly. Our system is incentivizing fraud.
The government should cut benefits to the drug industry, impose price controls and go back to funding research itself.
82
Fat chance since our congress is bought and paid for by among others, big pharma.
1
The sad part is, almost all the drug research is partially funded or initially funded by government grants via the NIH, NIDA, CMS, etc.
Nothing, absolutely nothing will change until the swine of Congress are somehow separated from the trough of Big Pharma. The impact of pharmaceutical corporations cannot be called influence: it is a conscienceless and rapacious power.
There is no way to describe the consumer's, the public's plight in our society without resorting to naive rhetoric: plainly put, business in this country initiated, fuels, and sustains the subversion of Congress' mandate to provide for the people, and thereby subverts the country itself.
There is no way to describe the consumer's, the public's plight in our society without resorting to naive rhetoric: plainly put, business in this country initiated, fuels, and sustains the subversion of Congress' mandate to provide for the people, and thereby subverts the country itself.
8
The real problem is that some over 95% of drugs used by medicare patients are generic, and almost 100% of the times the extra hospital pharmacies filling prescriptions for the medicare and medicade recipients substitute cheaper generics, all made in places like India, South East Asia, South America etc. Where standards, calibrations, purity and efficacy are totally ignored by FDA or any other US agency. Worst is yet that over 90% of elderly medicare and medicade drug recipients are zonked up their gills, and the poor souls have not the slighted as to what they are forced to take or what medicare / medicade pays for them. Doctors these days allow on the average 7.5 minutes for patient visit, which over 90% of the time result in prescriptions. Half of these patients do not take the prescribed medications that are dolled out like candy .
The other reality is that in the US medicare and medicade prescription bills for the elderly run pretty close to $950 billion a year.
The other harbinger is that hospital pharmacies for all inpatient drug prescription charge 25 to 40 % more then outside pharmacies.
I relate all this information as a forensic toxicologists Ph.D, medical school professor, and having had heart surgery for triple bypass and aortic valve replacement, patient afflicted with server cardiovascular disease and after the blotched surgery saddled with Marfan Syndrome & other complications.
The other reality is that in the US medicare and medicade prescription bills for the elderly run pretty close to $950 billion a year.
The other harbinger is that hospital pharmacies for all inpatient drug prescription charge 25 to 40 % more then outside pharmacies.
I relate all this information as a forensic toxicologists Ph.D, medical school professor, and having had heart surgery for triple bypass and aortic valve replacement, patient afflicted with server cardiovascular disease and after the blotched surgery saddled with Marfan Syndrome & other complications.
1
The most basic problem is that almost every American believes that for themselves or a loved one, there is never too high a price to pay for medical care, including prescription drugs. This is particularly true when someone else, i.e. private health insurance or the government, is picking up the tab. It's a heroic choice to decide that $40K is too much to pay for an incremental 3.2 months of life but more people would do so if the money came out of their pocket or the deceased's estate. Since so few Americans face their medical costs directly, we must collectively decide on the maximum price we are willing to pay for a quality adjusted life year and prohibit medical interventions that deliver less than that.
2
We do face our medical costs directly, when we can learn what they are. The problem is that going to any facility for medical care is risky to the pocket. We have no real idea how much we're on the hook for due to denials, narrow networks, co-pays, deductibles, etc. The only ones I know who truly use the health care system are those with chronic conditions that require constant monitoring and then only if they can truly afford the cost and the aggravation. Otherwise most people don't go unless they are deathly ill, a child of theirs needs a check up, or worse. We are probably the only first world country that penalizes people who need health care. We have way too much skin in the game and the wealth care industry has too little. Politicians protect them because they contribute to their campaigns. Most politicians understand next to nothing about science, research, or health. They showed their ignorance when they forced this system down our throats rather than going over to a single payer universal access system which would allow us to see our own doctors. I know of only one adult who goes to her doctor on a regular basis and that's because she has a condition that requires medical monitoring. No one else in my age range (40s-50s) goes on a regular basis. We go to work sick. We stay sick. Some of us die early because we couldn't afford care even with insurance.
2
Earl-I pay taxes and health insurance premiums. Guess what someone else isn't picking up the tab, the insured through work or direct payment of premiums and citizens who pay taxes are picking up the tab. Those are the people who actually get sick and take these drugs.
hen3ry: Unless you are paying for your medical care with after-tax cash, you do not face the costs directly. Most people with insurance take the attitude that as long as the supposed benefit exceeds their modest co-pay, why not see the doctor for whatever ailment they have (or imagine they have). The same applies to Medicare, where recipients figure they are paying premiums (but these reflect only about 25% of the true cost) or have paid into the system their whole working lives and are hence "entitled" to the free lunch.
1
Dr. Emanuel has started a crucial discussion, and I don't profess to understand the nuances of pharmaceutical costs, the free market society, or government (dis)incentives. But I do know a bit about Hep C. He briefly touts Sovaldi (at $1000 a pop) as one of those super-expensive drugs that are worth it. I wonder. Yes it is very good at turning an infected person into an uninfected person. 99% "cure rate". But what would have happened to that person, if not treated? Of 100 infected people, 20 clear the infection on their own. Of the remaining 80, about 25 or 30 will have fluctuations in their liver enzymes over the next 30 years, but have few symptoms. If they drink alot, those numbers go up a bit. 20 of the original 100 will get cirrhosis in about 30 years, and some of them may go on to get liver cancer and die of it. Yes, it IS an effective drug. But at that price, we also really need to look at the fear that the drug companies are engendering in the public and the policy-makers, and be smarter about who really benefits from these high price drugs. Clearly not everyone.
3
If you had hepatitis C, what would you do? Would you decline to take the drug because it was too expensive? Therein lies the problem.
1
It is hard, not having Hep C, to say for sure. But yes, at age 62, I think I would forego the treatment. Odds are pretty good I'd live to see 80 without symptoms. And that seems plenty long enough to live.
I still don't understand why patents need to last so long. The purpose of the patent is to protect the inventor while they establish the market, not give a perpetual monopoly. Seven years should be enough. In this scientific era all discoveries have become nearly inevitable. Witness the number of shared Nobel prizes given to researchers who were working independently.
3
Clinical trials required for drug approval are very expensive, usually $500 million and up. No company would initiate clinical trials unless they were sure that they had solid patent protection. Clinical trials usually take at least 6 years to complete, but 8 or 10 years would be more normal, so if a patent lasts for 20 years a good part of it is already gone before a drug comes to market. Nobel prizes are almost always given for basic research, whereas drug discovery and development mostly involves applied research, so you can't draw any meaningful conclusions from Nobel prize winners.
For most drugs, there are no sales during the first seven years. Thus, if patents were seven years, no new drugs would be developed. Are you suggesting seven years after the drug is approved by the FDA?
Anyone who doesn't think that drug companies are out to maximize profits needs to explain the direct-to-consumer marketing that drug companies so eagerly engage in. The reason those ads are ubiquitous is quite simple: the ratio of benefit to cost is enormous - the drug companies spend billions on advertising and reap tens of billions in added sales. The trick is to convince the consumers that they need the drug, and then get them to convince the doctors to prescribe it.
But there is one avenue toward an even higher ratio of benefit to cost: campaign contributions. Why else would the Medicare Part D law forbid Medicare from using its enormous bargaining power to negotiate lower drug prices? For every dollar the industry spends in Congress, they earn 20 or 30 dollars in revenue. Meanwhile, people who can't afford the drug die so that investors & CEO's don't have to struggle with a low cash flow. It's the capitalist's version of hostage taking.
I've lived in two countries so far that do not have the same bought & paid for Congress that America has, and the drug prices are 1/10 to 1/2 the cost of the same drugs in the US. Until and unless citizens become informed voters and vote out the bums who are feeding at the pharmaceutical trough, we will not see a change in this unbridled greed.
But there is one avenue toward an even higher ratio of benefit to cost: campaign contributions. Why else would the Medicare Part D law forbid Medicare from using its enormous bargaining power to negotiate lower drug prices? For every dollar the industry spends in Congress, they earn 20 or 30 dollars in revenue. Meanwhile, people who can't afford the drug die so that investors & CEO's don't have to struggle with a low cash flow. It's the capitalist's version of hostage taking.
I've lived in two countries so far that do not have the same bought & paid for Congress that America has, and the drug prices are 1/10 to 1/2 the cost of the same drugs in the US. Until and unless citizens become informed voters and vote out the bums who are feeding at the pharmaceutical trough, we will not see a change in this unbridled greed.
111
Nail, meet hammer. Hammer, meet nail.
Unfortunately, the for profit pharmaceutical industry exists in a world of competing ethics -- creating medications that improve health and maximizing returns for shareholders. The second imperative seems to have long overshadowed the first and has led to the de facto ransoming of pharmaceuticals, for cancer especially, although for many other serious illnesses as well. (Nor is it just pharmaceuticals that are getting ransomed in the current environment, as numerous articles in this paper have described.) Unlike price gouging for something like gasoline during shortages, which brought angry recriminations, price gouging of pharmaceuticals affects people by raising the cost of insurance -- whether for profit (e.g. United), non-profit (e.g. Blue Cross) or government (Medicare/Medicaid/VA) and the anger gets directed at these institutions for not paying or for raising prices (or taxes, in the case of government insurance), limiting political will for reform.
It is tempting to see negotiations as a way out, and with drug prices lower overseas, there is reason to think it may help some, but what exactly do insurers bring to the table when manufacturers are proposing to ransom patent protected medications that are necessities for many patients? It is hard for me to see a way out that does not involve regulation -- e.g. establish a federal definition of price gouging and revoke patent protection if the definition is met. Or stiffer, as this is really a shakedown of taxpayers.
It is tempting to see negotiations as a way out, and with drug prices lower overseas, there is reason to think it may help some, but what exactly do insurers bring to the table when manufacturers are proposing to ransom patent protected medications that are necessities for many patients? It is hard for me to see a way out that does not involve regulation -- e.g. establish a federal definition of price gouging and revoke patent protection if the definition is met. Or stiffer, as this is really a shakedown of taxpayers.
5
Any system of price controls will swiftly become politicized and fail to cover costs of development. Similarly, a system of trying to assess the effectiveness of any particular drug is doomed to failure.
One change that will result in cost reduction is to stop letting the rest of the world piggyback on U.S. drug development costs and then sell the resulting drugs in their country for a price that is subsidized by the American consumer. Make them pay their fair cost of development. The drug companies have a role in this problem as they allow their products to be sold at the subsidized price for the incremental income.
In the final analysis, the free market is the best tool to control prices while ensuring a continuing supply of beneficial drug therapies.
One change that will result in cost reduction is to stop letting the rest of the world piggyback on U.S. drug development costs and then sell the resulting drugs in their country for a price that is subsidized by the American consumer. Make them pay their fair cost of development. The drug companies have a role in this problem as they allow their products to be sold at the subsidized price for the incremental income.
In the final analysis, the free market is the best tool to control prices while ensuring a continuing supply of beneficial drug therapies.
1
I don't think you have much evidence to support your assertion about the free market.
1
Overall, cancer drug prices are 20% to 40% lower in European countries than in the US.
"The US makes most of the discoveries, the American taxpayer funds 85% of the basic research, and yet at the end of the day when a drug is FDA-approved — for cancer as well as for other indications — we as Americans are paying at least twice the price as those outside the US," said Dr Hagop Kantarjian.
",,,,for most cancer drugs, you can find them at half the price in Canada. For the hepatitis C drug [sofosbuvir], in the US we pay $80,000 to $160,000 for a 3- to 6-month course, but in Egypt and India, the drug company has an agreement to give the total course of treatment to an individual patient for $900."
Even at that cut rate, they still make a large profit, he emphasized. "That's because the total cost of treatment is only $138. In the US, we are in a very awkward situation because we fund most of the research as taxpayers and we get zero in return," he explained.
The US lacks any sort of central government or agency that regulates cost.
In contrast, negotiations of drug prices between governments and pharmaceutical companies are routine in Canada, most European nations, and most countries in the Middle East and Far East. They have centralized authorities to negotiate prices with manufacturers
http://www.medscape.com/viewarticle/835182#vp_5
In the US, medical extortion is the rule whereas in the civilized world it is considered a crime.
'Savage capitalism' at its finest.
"The US makes most of the discoveries, the American taxpayer funds 85% of the basic research, and yet at the end of the day when a drug is FDA-approved — for cancer as well as for other indications — we as Americans are paying at least twice the price as those outside the US," said Dr Hagop Kantarjian.
",,,,for most cancer drugs, you can find them at half the price in Canada. For the hepatitis C drug [sofosbuvir], in the US we pay $80,000 to $160,000 for a 3- to 6-month course, but in Egypt and India, the drug company has an agreement to give the total course of treatment to an individual patient for $900."
Even at that cut rate, they still make a large profit, he emphasized. "That's because the total cost of treatment is only $138. In the US, we are in a very awkward situation because we fund most of the research as taxpayers and we get zero in return," he explained.
The US lacks any sort of central government or agency that regulates cost.
In contrast, negotiations of drug prices between governments and pharmaceutical companies are routine in Canada, most European nations, and most countries in the Middle East and Far East. They have centralized authorities to negotiate prices with manufacturers
http://www.medscape.com/viewarticle/835182#vp_5
In the US, medical extortion is the rule whereas in the civilized world it is considered a crime.
'Savage capitalism' at its finest.
236
"Even at that cut rate, they still make a large profit, he emphasized.".....You have to be careful when you talk about profit because almost all the cost of a drug comes in discovery, development, and the drug approval process; and this cost all occurs before the drug is ever even sold. It follows that the cost of actually making the drug and putting it in a bottle represents only a small fraction of the total cost. So when you say they are making a large profit, do you mean a large profit on making the drug and putting it into the bottle, or do you mean a large profit on the total cost which includes discovery, development, and approval? Because it normally takes several years for a company to recover the full cost of their total investment in a drug, it would be very difficult for someone to accurately make a general claim that they are making a large profit at any given point in time.
There would be no Sovaldi without Capitalism.
1
"...but in Egypt and India, the drug company has an agreement to give the total course of treatment to an individual patient for $900."
Why is that? You need to do some research. These prices (in Egypt and India) are not pulled out of a hat - they are based on PER-CAPITA INCOME in those nations versus the same statistic in the U.S. And even at those prices, very few Egyptians or Indians can afford Sovaldi.
Why is that? You need to do some research. These prices (in Egypt and India) are not pulled out of a hat - they are based on PER-CAPITA INCOME in those nations versus the same statistic in the U.S. And even at those prices, very few Egyptians or Indians can afford Sovaldi.
1
The Pharmaceutical lobby is one of the largest, spending nearly $200 million annually to "persuade" our politicians and stave off any chance of price regulation. With that type of power, we can't count on our elected leaders to truly care about their constituents. We need to upend the healthcare lobbyists before we can really get to a fair minded solution.
Until then, millions of Americans (in particular the elderly) will struggle to pay for their overpriced prescription medicines. Many will forgo other necessities or the drugs themselves because of cost, endangering their very lives. To see this happening to the citizens of one of the most wealthy and advanced countries on the planet is nothing short of criminal.
Until then, millions of Americans (in particular the elderly) will struggle to pay for their overpriced prescription medicines. Many will forgo other necessities or the drugs themselves because of cost, endangering their very lives. To see this happening to the citizens of one of the most wealthy and advanced countries on the planet is nothing short of criminal.
71
So, the pharmaceutical lobby is exhibit A for why we need a constitutional amendment allowing campaign finance reform.
1
Thanks for your post. Readers can see the figures here:
http://www.opensecrets.org/industries/lobbying.php?cycle=2014&ind=H04
http://www.opensecrets.org/industries/lobbying.php?cycle=2014&ind=H04
2
I see two problems with the solutions proposed here:
1. They apply principles of common sense.
2. They have been tried in other countries and the evidence shows they are working.
Even a cursory glance at U.S. domestic policy over the past few decades shows that's a recipe for vehement rejection by a certain self-defeating segment of the public, and even more vehement rejection by the representatives they elect to help them defeat themselves.
1. They apply principles of common sense.
2. They have been tried in other countries and the evidence shows they are working.
Even a cursory glance at U.S. domestic policy over the past few decades shows that's a recipe for vehement rejection by a certain self-defeating segment of the public, and even more vehement rejection by the representatives they elect to help them defeat themselves.
15
3. Reducing the lobbying power that prevents such solutions from being approved and enforced would interfere with the First Amendment Rights of corporations (Citizens vs United.)
1
There is no single solution to the price of Keytruda, Opdivo, and Yervoy.
New drugs with new mechanisms. The government has made no
attempt to reign in these prices, and Big Pharma is controlled by Wall Street. Thalidomide, an ancient drug from Celgene, still sells for about $6,600/month.
Beyond the individual pricing of new drugs, is the fact that the tobacco industry
flourishes, and lung cancer is a major cancer problem.
New drugs with new mechanisms. The government has made no
attempt to reign in these prices, and Big Pharma is controlled by Wall Street. Thalidomide, an ancient drug from Celgene, still sells for about $6,600/month.
Beyond the individual pricing of new drugs, is the fact that the tobacco industry
flourishes, and lung cancer is a major cancer problem.
2
Question: What is going to happen to Australia's pricing when the TPP goes into effect after congress passes legislation?Will pharmaceuticals be able to file suit (ISDS) against their pricing policy like they have against smoking packaging laws?And will Switzerland be effected by the TTIP with European Union? We don't know yet......
3
In the United States, however, our Presidents and Congresses work for the pharmaceutical companies, not for citizens and voters overall.
Our poster boy for this is the grinning, smirking face of Billy Tauzin, who guided the Congressional ban on Medicare negotiating drug prices and who then, a few months later, went to work for Big Pharma as a lobbyist at over $1 million/year.
I sometimes fantasize about President Obama using the provisions of the USA Patriot Act to unilaterally declare a few drug company CEOs as terrorists, to ship them to Guantanomo to be held indefinitely without effective access to counsel -- all perfectly legal!
Our poster boy for this is the grinning, smirking face of Billy Tauzin, who guided the Congressional ban on Medicare negotiating drug prices and who then, a few months later, went to work for Big Pharma as a lobbyist at over $1 million/year.
I sometimes fantasize about President Obama using the provisions of the USA Patriot Act to unilaterally declare a few drug company CEOs as terrorists, to ship them to Guantanomo to be held indefinitely without effective access to counsel -- all perfectly legal!
13
As one who benefited for many years from the Australian drug pricing system, I am pleased to see it get some wider recognition. However, this is vitiated to some extent by the inaccurate way in which it is described here.
Australia does not have a system of drug "price controls". Once drugs are approved for safety and effectiveness, pharmaceutical companies can charge what they like for them. However, the government maintains a list of drugs which it will subsidize under the national health system. Companies must negotiate pricing in order to have a drug included on the list.
In practice, since doctors will seldom prescribe a drug which is not on the list, drug costs are effectively constrained without "price controls".
It is frequently suggested informally that pharmaceutical companies compensate for the profits that they forego in Australia and other countries with an effective pricing system by soaking American consumers. But it should be noted that they must still be making a reasonable profit in Australia or they would not bother with the system.
Australia does not have a system of drug "price controls". Once drugs are approved for safety and effectiveness, pharmaceutical companies can charge what they like for them. However, the government maintains a list of drugs which it will subsidize under the national health system. Companies must negotiate pricing in order to have a drug included on the list.
In practice, since doctors will seldom prescribe a drug which is not on the list, drug costs are effectively constrained without "price controls".
It is frequently suggested informally that pharmaceutical companies compensate for the profits that they forego in Australia and other countries with an effective pricing system by soaking American consumers. But it should be noted that they must still be making a reasonable profit in Australia or they would not bother with the system.
8
It looks like the drug companies wrote the prescription drug laws in this country. For instance, Medicare pays for a lot of drugs but can't negotiate for lower prices. That's just stupid. The laws in this country were apparently written for the benefit of corporations rather than people.
10
And for this we can largely thank Republicans, who believe that government exists only to further business interests rather than the interests of the citizenry, and who also believe in less government (to get out of the way of business).
2
Nothing will be done until the lobbyists are banned from legislators' offices, and politicians like Orrin Hatch are removed from office.
I also don't think it's impossible for the Feds to negotiate with drug companies. I get my meds from the VA. I pay $2 for one med that costs $20 on the private market.
On the other hand, a friend of mine says he loves drug stocks in his 401k but hates them in his medicine chest. He'd be willing to give up some in his 401k if Big Pharm would give up some profit for society as a whole.
I also don't think it's impossible for the Feds to negotiate with drug companies. I get my meds from the VA. I pay $2 for one med that costs $20 on the private market.
On the other hand, a friend of mine says he loves drug stocks in his 401k but hates them in his medicine chest. He'd be willing to give up some in his 401k if Big Pharm would give up some profit for society as a whole.
4
We're indeed paying too much for prescription drugs. First, of course, the absurdly inflated prices that the pharmaceutical industry, as #1 lobbyist and huge campaign contribitor, is able to bully and buy.
Secondly, just a glance at drug pricing shows two big winners:
1. The drug you must take because otherwise you're forever sick and perhaps dying. The cancer drugs, which are approved if they shrink tumors (a surrogate marker, because what we want is lengthened and/or improved life).
2. The drug given to you to prevent a disease you don't have. Massive numbers of our population, for example, are given statins for primary prevention (you haven't had a cardiovascular event). The surrogate marker here, of course, is lower LDL: whether this correlates in this demographic with longer life or less cardiovascular disease is, incredibly, still being debated within the mainstream medical community.
So the moneymakers: the massively expensive drug for the dire disease; the cheap drug for almost everyone forever. Sometimes we find a hybrid, such as the expensive drugs marketed to the large segment of statin-takers whose severe side affects are suddenly being given credence.
It's all about money with Big Pharma, and it's almost impossible to find someone nowadays who isn't utterly cynical about this industry. Side effects (adverse effects is the right term here) are almost never reported: perhaps 1%. Doctors know that pharma companies make reporting adverse effects too onerous.
Secondly, just a glance at drug pricing shows two big winners:
1. The drug you must take because otherwise you're forever sick and perhaps dying. The cancer drugs, which are approved if they shrink tumors (a surrogate marker, because what we want is lengthened and/or improved life).
2. The drug given to you to prevent a disease you don't have. Massive numbers of our population, for example, are given statins for primary prevention (you haven't had a cardiovascular event). The surrogate marker here, of course, is lower LDL: whether this correlates in this demographic with longer life or less cardiovascular disease is, incredibly, still being debated within the mainstream medical community.
So the moneymakers: the massively expensive drug for the dire disease; the cheap drug for almost everyone forever. Sometimes we find a hybrid, such as the expensive drugs marketed to the large segment of statin-takers whose severe side affects are suddenly being given credence.
It's all about money with Big Pharma, and it's almost impossible to find someone nowadays who isn't utterly cynical about this industry. Side effects (adverse effects is the right term here) are almost never reported: perhaps 1%. Doctors know that pharma companies make reporting adverse effects too onerous.
5
Many physicians would agree with the general tone of your comments.
Still, when you say "...as outrageous as they are, prices are not the real issue," it raises concerns about how your particular analytical view might be interpreted. Many very expensive drugs do not provide cures, for example in the case of biologics for inflammatory diseases such as Crohn's and rheumatoid arthritis. Yet they are immensely valuable in terms of improving quality of life over prolonged intervals. Using the examples of Sovaldi and Opdivo gives the impression of more black and white circumstances that often do not exist. Hence prices are a "real issue"--albeit not the only one--along with what constitutes effectiveness in diverse conditions. The fact that people without a drug plan get hammered the hardest in pricing structures--in the same fashion as they do with hospital costs--is a "real issue." This is not nit-picking.
Can Congress get together to pass meaningful reform in the face of a wealthy lobby so determined to "maximize profits while they can"? Would this be any easier than attempts at gun control? The idea of a fifty state solution for drug pricing gives one headaches. Letting Medicare begin to negotiate for drug prices would be a significant step in the right direction, but it will not be enough.
Still, when you say "...as outrageous as they are, prices are not the real issue," it raises concerns about how your particular analytical view might be interpreted. Many very expensive drugs do not provide cures, for example in the case of biologics for inflammatory diseases such as Crohn's and rheumatoid arthritis. Yet they are immensely valuable in terms of improving quality of life over prolonged intervals. Using the examples of Sovaldi and Opdivo gives the impression of more black and white circumstances that often do not exist. Hence prices are a "real issue"--albeit not the only one--along with what constitutes effectiveness in diverse conditions. The fact that people without a drug plan get hammered the hardest in pricing structures--in the same fashion as they do with hospital costs--is a "real issue." This is not nit-picking.
Can Congress get together to pass meaningful reform in the face of a wealthy lobby so determined to "maximize profits while they can"? Would this be any easier than attempts at gun control? The idea of a fifty state solution for drug pricing gives one headaches. Letting Medicare begin to negotiate for drug prices would be a significant step in the right direction, but it will not be enough.
4
"Polls show that Americans are fed up with high drug costs." Yes, everyone wants to buy a cheap generic, but companies do not invent generics (their inventions become generics). And we all know about the frightening quality control of some "generics". Big Pharma may not be cheap, but they have produced some amazing results over the years. We all interact with many people each day who are alive thanks to their innovations. Consider the alternative.
I have no problem with high-priced drugs when they work. Drugs should be sold like any other product with a money-back guarantee when the unused portion is returned within 30 days, if the customer isn't satisfied.
2
Your suggestions might work, but would be fought to the death by Big Pharma.
If there is going to be a fight, why not fight for Single Payer, or Medicare for All, and in this Medicare the right to negotiate drug prices would not be surrendered at any cost.
We still stand alone in our resistance to what has been found to be the most effective, most efficient health care delivery system.
If there is going to be a fight, why not fight for Single Payer, or Medicare for All, and in this Medicare the right to negotiate drug prices would not be surrendered at any cost.
We still stand alone in our resistance to what has been found to be the most effective, most efficient health care delivery system.
6
The high prices of drugs reflects the high level of public corruption in the US. The political system is so distorted with gerrymandering, vote suppression and the absence of public information systems that the politicians that make it into the chambers of democracy are so jaded that for example Medicare is forbidden to negotiate drug prices.
Meanwhile the drug industry is lavishing the politicians with campaign contributions and greasing this payola system. There is no change in sight.
The low classes, the poor in the US have a life expectancy of 60+ years while the affluent compare well with the Europeans. Nobody is interested in the low class and militarizing the police ensures no uprisings will happen.
Meanwhile the drug industry is lavishing the politicians with campaign contributions and greasing this payola system. There is no change in sight.
The low classes, the poor in the US have a life expectancy of 60+ years while the affluent compare well with the Europeans. Nobody is interested in the low class and militarizing the police ensures no uprisings will happen.
5
I really appreciate this column. I have long wondered why prescription drug prices are so high and have speculated on the role played by pharmaceutical companies' advertising - especially on television. I don't understand why the companies are marketing their products to the lay audience when only licensed physicians can prescribe them. If a particular medicine is appropriate for a particular patient, let the doctor write the order. Obviously, the companies believe that their profits are enhanced when they advertise to the masses, but reducing the astronomical prices of these medicines is a far higher priority. Advertising prescription drugs to anyone other than the medical profession should be legally proscribed.
4
The article is flawed. "Having the federal government negotiate lower prices for Medicare would most likely drive up prices on the private side as drug companies tried to recoup their 'lost' profits". The statement implies collusion---one way or another, the drug companies are going to get their profits. I don't think the distinguished author contemplated the significance of that. The solution is for government to sponsor all R&D and clinical trials; for the very few that ultimately make it, the government grants public domain status so that anyone in the world can manufacture. Although the collusive PHARMA loses as well as the medical establishment, which enjoys its largesse, the taxpayers and patients would win. Alas, due to regulatory capture, it won't happen.
A far better option would be once the patent expires and the formula for a particular drug passes into the public domain, let any producer who manufactures it to FDA standards, export it into the U.S. The option of purchasing that drug from any one of numerous producers, both foreign and domestic, would inject price competition into the marker and benefit all. BIG PHARMA profits enormously by restricting competition. The remedy would be to allow an open market for all producers manufacturing to FDA standards!
1
Dr Emanuel, you are the clearest, most insightful, and most accurate voice in healthcare management and policy in our country; and beyond.
There were several elements not known as causes that you highlighted, as usual, ( the effects of Medicaid's pricing scheme and the Orphan Drug Act). Your work is appreciated.
There were several elements not known as causes that you highlighted, as usual, ( the effects of Medicaid's pricing scheme and the Orphan Drug Act). Your work is appreciated.
2
Since all researchers and much research began under the auspices of universities (with their government grants), and since prescription drugs are necessary for life and health, why not just make the pharmaceutical industry part of the NIH -- that is, government agencies (like the Pentagon) and operate at cost -- good salaries and self-sustaining reinvested profits?
23
The Pentagon has outsourced our military to private contractors and it is enormously expensive. Since WW2 they have a pretty bad history of success and the cost has been enormous. I can't think of a worse solution to a cost issue than using the Pentagon model.
Ceilings become floors.
I once wrote a graduation thesis on this. At the time of the 1922 Washington Naval Conference, there were no cruisers in the world being built or planned as big as 10,000 tons. That seemed a safe size limit for future cruisers. From the time it was signed, the US never built another cruiser of less than 10,000 tons. Where did the idea come from to build that size? The Treaty, nothing more. There had been no prior plans for that, and no subsequent discussion of it either. It was just the size.
A price ceiling in the US economy would be like that. It would not be a ceiling, it would become the price.
So Switzerland is different? So it is, in many ways.
I once wrote a graduation thesis on this. At the time of the 1922 Washington Naval Conference, there were no cruisers in the world being built or planned as big as 10,000 tons. That seemed a safe size limit for future cruisers. From the time it was signed, the US never built another cruiser of less than 10,000 tons. Where did the idea come from to build that size? The Treaty, nothing more. There had been no prior plans for that, and no subsequent discussion of it either. It was just the size.
A price ceiling in the US economy would be like that. It would not be a ceiling, it would become the price.
So Switzerland is different? So it is, in many ways.
We need to fully socialize big pharma. Let the government (or nonprofits) fully control the production and manufacture of prescription drugs. All drugs should be free and paid for by the elimination of the tax exemption for employee health insurance. Let the government which represents society as a whole profit from advances and cures.
1
An excellent example of why unfettered capitalism doesn't work except for the greedy few at the top.
2
It's a misconcpetion that drug companies bear the risks and costs of all research and development. For many "expensive drug diseases" - like cancer or HIV related disease - government funded networks bear many substantial costs to test therapies.
1
The elephant in the room is our corrupt system of governance. Until we pass laws making bribing politicians illegal everything else is whistling Dixie.
And it's important to note,Republicans, that we are not the leader in everything on earth, except military spending and bought and sold politicians. We can learn from other countries. Australia fixed their gun problem in the governance equalivent of twenty minutes.
And it's important to note,Republicans, that we are not the leader in everything on earth, except military spending and bought and sold politicians. We can learn from other countries. Australia fixed their gun problem in the governance equalivent of twenty minutes.
3
Why don't we just admit that the free market is not a good system for drug development. We get too many "me too" drugs to treat toenail fungus, and many diseases are left ignored because they aren't "blockbusters." Fund the NIH and universities do the initial development, let the government hold all rights to the drugs, and then contract large phase II/III trials and manufacturing to pharmaceutical companies by competitive bidding.
1
As a result of the inaction of congress on this issue, and others, a growing number of Americans are looking to Trump this problem.
"Also, as outrageous as they are, prices are not the real issue. Value is. What really frustrates people are expensive drugs that do not provide a cure. For instance, Opdivo adds an average of 3.2 months of life to lung cancer patients and costs $150,000 per year for treatment."
Value is in the eye of the beholder. I suspect the insured lung cancer patient would like the 3.2 months of sunrises and sunsets along with time to spend with family and friends. The insurer either the government or the private insurer probably wouldn't see the value in those 3.2 months.
What price and how long does the author see as a value? Sadly the author uses a Walmart shopper mentality to a highly complex problem that has patients pitted against the Government, private insurance companies, large bureaucratic health care providers and pharmaceutical companies.
The mentality of the author is scary and that's why the public who recognizes that they can actually get sick doesn't trust insurance companies including the Federal and State Government.
Value is in the eye of the beholder. I suspect the insured lung cancer patient would like the 3.2 months of sunrises and sunsets along with time to spend with family and friends. The insurer either the government or the private insurer probably wouldn't see the value in those 3.2 months.
What price and how long does the author see as a value? Sadly the author uses a Walmart shopper mentality to a highly complex problem that has patients pitted against the Government, private insurance companies, large bureaucratic health care providers and pharmaceutical companies.
The mentality of the author is scary and that's why the public who recognizes that they can actually get sick doesn't trust insurance companies including the Federal and State Government.
2
You are making the tacit assumption that the life-days gained are in good health, rather than in an ICU bed where there are no days or nights, just machines, occasional carers in person, and often no windows. This is seldom the case.
The UK has a NICE committee (the acronym stands for National Institute for Health and Care Excellence) which performs a function that the FDA does not. Instead of zero-based (placebo) effectiveness trials of new drugs or procedures each is tested against the current best practice. The committee examines the change in patient benefit against the change in cost. Benefit is measured In QALY- quality adjusted life years- so increasing the duration of an ICU end of life stay is of lower value than increasing the time spent enjoying 'sunrises and sunsets along with time to spend with family and friends.' Note that the benefit measure is done for all ages: a treatment/procedure is approved for all patient ages or none (unless it has only a specific application).
Any economist will recognise that this approach is actually measuring the marginal social benefit per marginal $ spent, and is the appropriate way to attain maximum benefit for any budget spend.
The NICE committee approach can work backwards: how much is the most we should spend for a treatment of benefit X is the cap, cost plus reasonable profit is the floor. Medical devices are much cheaper in the UK for this reason. The NHS pays less to buy things like wheelchairs than Medicare pays monthly.
The UK has a NICE committee (the acronym stands for National Institute for Health and Care Excellence) which performs a function that the FDA does not. Instead of zero-based (placebo) effectiveness trials of new drugs or procedures each is tested against the current best practice. The committee examines the change in patient benefit against the change in cost. Benefit is measured In QALY- quality adjusted life years- so increasing the duration of an ICU end of life stay is of lower value than increasing the time spent enjoying 'sunrises and sunsets along with time to spend with family and friends.' Note that the benefit measure is done for all ages: a treatment/procedure is approved for all patient ages or none (unless it has only a specific application).
Any economist will recognise that this approach is actually measuring the marginal social benefit per marginal $ spent, and is the appropriate way to attain maximum benefit for any budget spend.
The NICE committee approach can work backwards: how much is the most we should spend for a treatment of benefit X is the cap, cost plus reasonable profit is the floor. Medical devices are much cheaper in the UK for this reason. The NHS pays less to buy things like wheelchairs than Medicare pays monthly.
Richard- In the US patients have power over their medical treatment. They decide when to stop treatment and go into hospice. The insurance company regardless if it's
State or private and the medical community treats based on the patients willingness to continue or forgo treatment.
Cost benefit analysis may be better for an entire population but that isn't the model in the US even for our single payer Medicare system. We have a pay for service insurance model where the patient decides when to stop curative and palliative treatment. When the patient no longer can make that decision their living will or power of attorney will make it.
State or private and the medical community treats based on the patients willingness to continue or forgo treatment.
Cost benefit analysis may be better for an entire population but that isn't the model in the US even for our single payer Medicare system. We have a pay for service insurance model where the patient decides when to stop curative and palliative treatment. When the patient no longer can make that decision their living will or power of attorney will make it.
Interestingly some the world's largest and most successful pharmaceutical products were researched and marketed originally by Swiss companies. Other of our most successful drugs also are originally of European origin and were marketed there first. The idea that all new drugs originate in the US is a fallacy. Salaries and wages of the researchers and in the manufacturing facilities in Europe are on a par with those here. Another point not mentioned: Many of the Rx drugs now dispensed in our US pharmacies are low cost imports from India and China.
.
There really is no sound argument for why any drug should cost more here than it does in Europe, Canada or Australia. The prices charged there yield a decent profit, or the manufacturing labs would not register and sell them there.
.
There really is no sound argument for why any drug should cost more here than it does in Europe, Canada or Australia. The prices charged there yield a decent profit, or the manufacturing labs would not register and sell them there.
5
Bravo. We need to realize that the status quo is unnecessary and harmful. We need to adjust patent law, too, to stop extending protection by making small tweaks and withdrawing older drugs from the market. . And outlaw bribing your competitors to stay off the market.
3
I have great respect for the health care knowledge of Mr. Emanuel. However, I do not think our Congressional representatives will force government price setting on one of their biggest source of campaign funds.
A major part of the root cause of drug costs is that pharma uses patent protection, the fact that insurance shields consumers from the majority of drug costs and direct to consumer advertising to avoid competition. Drug manufacturers charge what the market will bear for drugs when they control prices.
Congress is unlikely to severely restrict patent protection. But it may limit some of the outrageous games drug manufacturers play to extend patent protection, such as putting stripes on capsules, adding time-release to the same compound, etc.
But much more will be needed to bring drug prices under control. The solution must lie with the purchasers. Insurers/plan administrators could be more strategic and aggressive with tiered pricing. Rather than playing pharma's rebate game, they could identify the drugs that are priced too high, then make consumers face much higher pricing (i.e., 50%+ with no out-of-pocket maximum) if they insist on purchasing such drugs.
Insurers/plan administrators could refuse to cover any drug advertised direct to consumer
Insurers could pool monies to fund development of drugs for rare conditions. They would competitively contract with a pharma manufacturer to develop the drug. Insurers, not pharma, would then control pricing
A major part of the root cause of drug costs is that pharma uses patent protection, the fact that insurance shields consumers from the majority of drug costs and direct to consumer advertising to avoid competition. Drug manufacturers charge what the market will bear for drugs when they control prices.
Congress is unlikely to severely restrict patent protection. But it may limit some of the outrageous games drug manufacturers play to extend patent protection, such as putting stripes on capsules, adding time-release to the same compound, etc.
But much more will be needed to bring drug prices under control. The solution must lie with the purchasers. Insurers/plan administrators could be more strategic and aggressive with tiered pricing. Rather than playing pharma's rebate game, they could identify the drugs that are priced too high, then make consumers face much higher pricing (i.e., 50%+ with no out-of-pocket maximum) if they insist on purchasing such drugs.
Insurers/plan administrators could refuse to cover any drug advertised direct to consumer
Insurers could pool monies to fund development of drugs for rare conditions. They would competitively contract with a pharma manufacturer to develop the drug. Insurers, not pharma, would then control pricing
We're paying too much for medical care in America. Our wealth care system does not provide us with the care we need. We're getting the care we can afford. We can count on the following things when it comes to wealth care in America: high deductibles, co-pays, denials, poor communication, rushed visits, and narrow networks. All the ACA really did, despite its intentions to make care affordable to more Americans, was empower the wealth care system to continue its practices of overcharging us for care, allowing the wealth insurance industry to continue to tyrannize doctors and patients, and to put barriers in the way of patients (not consumers because we really have no choices when we are in dire need of medical care) to receiving half way decent treatment.
I have insurance. But I don't know from day to day if they will continue to have just one of my doctors on their preferred provider list. I don't know from day to day, if any medication I take, generic or otherwise, will remain on their formulary. In short, I'm paying for a product that is unreliable except in one way: it's inadequate to what I may need if I'm seriously ill. Our wealth care industry serves itself, not the people who require its products to survive. I'm already not taking certain medications I need because I can't afford to see the doctors who prescribe them. The cost of health care in America is out of control, period.
I have insurance. But I don't know from day to day if they will continue to have just one of my doctors on their preferred provider list. I don't know from day to day, if any medication I take, generic or otherwise, will remain on their formulary. In short, I'm paying for a product that is unreliable except in one way: it's inadequate to what I may need if I'm seriously ill. Our wealth care industry serves itself, not the people who require its products to survive. I'm already not taking certain medications I need because I can't afford to see the doctors who prescribe them. The cost of health care in America is out of control, period.
32
I don't know is that was a typo or freudian slip but truly, "wealth care system" says it all.
All very intereting ideas. However; there is something very unique about the American political system that plays out in many arenas not just drug pricing. Why do Hedge fund managers pay 1/2 the taxes that the vast majority of working tax payers pay who earn much less than they do. We all know why it is called lobbying.
Dr. Ezekiel J. Emanuel does not answer the cruicial question of how does Australia and many other democratic countres keep the prices of medications much lower than the USA. Certainly our politicians and our bureaucratics in charge of health care policy know everything that Dr. Emanuel writes in the article and more about drug pricing.
The solutions are many, the congressional will is weak.
Dr. Ezekiel J. Emanuel does not answer the cruicial question of how does Australia and many other democratic countres keep the prices of medications much lower than the USA. Certainly our politicians and our bureaucratics in charge of health care policy know everything that Dr. Emanuel writes in the article and more about drug pricing.
The solutions are many, the congressional will is weak.
15
"The United States government has created myriad special pricing arrangements that pervert incentives."
Ezekial, you need to bring the same clarity to the root causes as you do in the other areas of your piece.
The bottom line is that what you refer to as the "government" is a Congress in the pay of big Pharma. And I doubt that the drug company executives who believe that high prices cannot continue, have any plans to address this obscenity.
Ezekial, you need to bring the same clarity to the root causes as you do in the other areas of your piece.
The bottom line is that what you refer to as the "government" is a Congress in the pay of big Pharma. And I doubt that the drug company executives who believe that high prices cannot continue, have any plans to address this obscenity.
26
In 2003, Congress and President Bush enacted the Medicare Prescription Drug, Improvement and Modernization Act, which established a prescription drug program for Medicare.
That legislation expressly prohibited Medicare from negotiating drug prices with pharmaceutical companies. Rather, any negotiation that takes place is to be between pharmaceutical companies and the insurance companies that administer the Medicare prescription drug program.
Isn't that special ?
In 2007, Senate Republicans blocked a Democratic proposal to allow Medicare to negotiate lower drug prices.
Senator John Cornyn, Republican of Texas, denounced the 2007 proposal as “a step down the road to a single-payer, government-run health care system.”
Democrats said they were merely trying to untie the hands of the secretary of health and human services, so he could negotiate on behalf of 43 million Medicare beneficiaries.
“The Department of Veterans Affairs is able to negotiate for lower-priced drugs,” said the Senate majority leader, Harry Reid, Democrat of Nevada. “H.M.O.’s can negotiate. Wal-Mart can negotiate. Why in the world shouldn’t Medicare be able to do that?”
Reid said the Democrats fell short in 2007 because of “the power of the insurance industry and the pharmaceutical industry” and their close ties to Republicans in Congress.
http://goo.gl/qdxkjH
The problem in America on this issue and virtually every public policy issue is the Greed Over People party and right-wing misanthropy.
That legislation expressly prohibited Medicare from negotiating drug prices with pharmaceutical companies. Rather, any negotiation that takes place is to be between pharmaceutical companies and the insurance companies that administer the Medicare prescription drug program.
Isn't that special ?
In 2007, Senate Republicans blocked a Democratic proposal to allow Medicare to negotiate lower drug prices.
Senator John Cornyn, Republican of Texas, denounced the 2007 proposal as “a step down the road to a single-payer, government-run health care system.”
Democrats said they were merely trying to untie the hands of the secretary of health and human services, so he could negotiate on behalf of 43 million Medicare beneficiaries.
“The Department of Veterans Affairs is able to negotiate for lower-priced drugs,” said the Senate majority leader, Harry Reid, Democrat of Nevada. “H.M.O.’s can negotiate. Wal-Mart can negotiate. Why in the world shouldn’t Medicare be able to do that?”
Reid said the Democrats fell short in 2007 because of “the power of the insurance industry and the pharmaceutical industry” and their close ties to Republicans in Congress.
http://goo.gl/qdxkjH
The problem in America on this issue and virtually every public policy issue is the Greed Over People party and right-wing misanthropy.
298
Yeah and Obama and democrats have made many attempts to change this but always been thwarted by the GOP. Wait that's not true at all they are just as complicit as the GOP...
Is there a reason why the VA couldn't buy drugs for Medicare?
Your political demonizing of the GOP does not explain the 2007 votes. Democrats controlled both houses.
They also controlled both house in 2009, 20010 -- under a Democratic executive. and did nothing to change the situation.
They are as monetarily corrupt as the GOP.
They also controlled both house in 2009, 20010 -- under a Democratic executive. and did nothing to change the situation.
They are as monetarily corrupt as the GOP.
1
"Private payers would continue to negotiate with drug companies over prices as they do now, but there would be a ceiling to prevent prices from becoming unsustainable."
Mr. Emanuel, nice try, but you are engaging in a pipe dream. We live in America where Unregulated Capitalism is glorified and worshiped. The American people have been mesmerized to believe Unregulated Capitalism, is a religion protected by our Constitution. The altar to Capitalism demands our money and if you don't have the necessary money then it demands the sacrifice of your life.
While Democrats do favor removing the Republican imposed prohibition on Medicare negotiating drug costs and in regulating Capitalism, neither political party in America has the will, much less desire, to place the welfare of the American people ahead of greenback greed.
Mr. Emanuel, nice try, but you are engaging in a pipe dream. We live in America where Unregulated Capitalism is glorified and worshiped. The American people have been mesmerized to believe Unregulated Capitalism, is a religion protected by our Constitution. The altar to Capitalism demands our money and if you don't have the necessary money then it demands the sacrifice of your life.
While Democrats do favor removing the Republican imposed prohibition on Medicare negotiating drug costs and in regulating Capitalism, neither political party in America has the will, much less desire, to place the welfare of the American people ahead of greenback greed.
10
My wife and I are American but have lived in Switzerland for the past 10 years. Switzerland is a great country, not because of its mountains or its chocolate but because of the common sense of its people. In the end, culture is what determines a country's effectiveness. The greed of insurance companies, doctors, and drug manufacturers is simply not tolerated here. Neither is the undue influence of paid lobbyists. If Americans think their medical system can't be fixed, they need only look to the Swiss for an example of how an extraordinary health care system can be sustained for 100% of its population at almost half the cost as in the U.S.
36
Take it from one who knows, there are drawbacks in the Swiss system. First of all, Switzerland protects its pharmaceutical industry by forbidding so-called "parallel imports". This means that the same drug costs considerably less in Germany than it does in Switzerland - and you cannot purchase a drug in Germany and have your Swiss health plan cover it, unless it is a medical emergency.
In fact, I am surprised that you single out the Swiss model, when Germany or France - with their single payer systems - are much less expensive. Is it because the Swiss model is palatable to conservative pundits, because it has some sort of "free market" mechanism? It is true that our pharmaceuticals are less expensive in the USA, but we could do much better.
In fact, I am surprised that you single out the Swiss model, when Germany or France - with their single payer systems - are much less expensive. Is it because the Swiss model is palatable to conservative pundits, because it has some sort of "free market" mechanism? It is true that our pharmaceuticals are less expensive in the USA, but we could do much better.
8
Greed!
5
This is easy. The US is the biggest market. We should get the BEST price of the developed world, not the worst. The drug companies will figure out a way to still make money. I'm OK with charging emerging markets a lower price, but the idea that we pay more than the EU or Canada is wrong, and we should be allowed to negotiate so it doesn't happen. Overpaying to provide incentive is a waste - we're subsidizing the drug companies and the other buyers (EU and Canada).
3
Fixed price buying is not appropriate for everything. When you have companies making this much profit off the Gov't and when there is such a high reliance on high-risk R&D, more strategic contracting is in order. Cost reimbursement contracting has been given a bad name in the press (and in gov't leadership), but there is a place for it...it exists for a reason.
Should the Gov't play a bigger role in R&D?
Should the Gov't directly fund the R&D?
If so, separate contracting/de-linking R&D from pill price would result.
If so, then the Gov't can pay simple production cost of the successful drugs...and the drug companies get paid fairly for both their risk, and their low/no-risk production facilities.
Should the Gov't play a bigger role in R&D?
Should the Gov't directly fund the R&D?
If so, separate contracting/de-linking R&D from pill price would result.
If so, then the Gov't can pay simple production cost of the successful drugs...and the drug companies get paid fairly for both their risk, and their low/no-risk production facilities.
2
If ever there was an example of just how evil corporate Americas greed is, big pharma is it. There is absolutely no justification for this kind of gouging other than the sick twisted psychopathic greed of a few over paid executives, cheered on by the just as sick and twisted crooks on Wall Street.
10
No mention of reverting to what was once law: no direct marketing to patients. The amount of money spent on direct advertising, promotional tours across the USA welding Pharma paid physicians and 'patient advocates' (whose disease specific non profit are given a 'donation'). This practice has polluted the doctor/patient relationship; the docs pull out the Rx pad because they otherwise might me sued by the patient who thinks s/he knows best since the saw an ad. European drug agencies (I live in France) set prices and treatment guidelines in order to follow best practices and to save money. Patient choice exists in France: you want name brand when a generic is available? You pay practically the full price of the drug and your supplemental insurance pays $0. What the US needs is a central pricing agency and Medicare for all. You don't even mention the role PBM's play as middle man in our current system; they set the rules and prices. Often they have a conflict of interest since they are often affiliated or owned by pharmacy chains. The price of Gilead's new drug for Hep C had no R&D costs as it was developed by the public sector; their only cost was clinical trials whose cost is often supported by Medicare funding streams to hospitals. You as an oncologist can also make lots of money on cancer drugs by being the sole provider...an obscene practice. Your solution is in fact void of what is needed to bring down Rx costs.
14
DRUG COMPANIES need to be required to adhere to the Hippocratic Oath. As it is, they adhere to the hypocritical oath to line their pockets. There is a clear conflict of interest between the drug companies' profits and those of their stockholders against the affordability to the patient. In other countries, drugs to combat HIV have been licensed at much lower costs. That is concrete proof that the companies could, at their discretion, negotiate more reasonable prices and make the drugs available to more people. Yes, the quarterly corporate earnings would be affected. The reason being that during the Reagan years, the language in corporate charters requiring them to describe the rationale for incorporation as related to the benefit to the community was removed. So without stating values as good corporate citizens, big pharma has gone hog wild. No thanks to the Institutionalization of Greed that is the hallmark of Reagan's filthy legacy. So they'll cut the profits and initial earnings will be a lower curve. The raison d'etre for drugs is to heal patients, not to gouge
2
Evaluate the fillers used with active drug components for allergic reactions. Many drugs create secondary health problems from fillers which have alternatives that are minimally more costly for the drug company. Try to find a drug without sodium lauryl sulfate. Sulfite has less allergic reaction.
1
Isn't sodium laurel sulfate an ingredient in shampoo? Yuck!
Sulfite is not sulfate.
If we gradually added more income tax brackets for high income individuals then the incentive to maximize profits for executives and stockholders would start to wane. Drug prices in the last century were not astronomical, especially when there were twelve income tax brackets. If the top bracket was at 80%, then costs for cancer drugs would drop and we might be able to purchase a gallon of ice cream again as there would be no incentive to shrink the container.
15
Drugs can cost much more than twice as much. Two years ago AndroGel cost over $1,300 at Costco. I found the exact same drug from the same manufacturer could be purchased in France for $57, Mexico for $59, and Canada for $62. Americans should have the right to legally purchase prescription drugs on-line from outside the US.
Obviously, drug companies do not like this. My insurance company even has a higher co-pay on on-line purchases within the US, than from brick and mortar stores.
Obviously, drug companies do not like this. My insurance company even has a higher co-pay on on-line purchases within the US, than from brick and mortar stores.
86
Recently, my mother was diagnosed with hepatitis C. She lives in Cuba, there is treatment there but it is not fully effective (in around 70% of the cases the virus disappears). I was of course looking for a better option, and I found a really good drug - Sovaldi.
The problem with this drug is its price, $1,000 each pill. The full treatment is around $60,000. My mother cannot dream of paying that kind of money in Cuba. I live in France, if I get infected with hepatitis, the french social security system would cover the treatment because I'm a tax payer, but I cannot transfer this right to my mother.
Unfortunately, I don't have the money to pay for it by myself.
As the article says, the company that produces Sovaldi is having profits of 50%. They are the only producer of this drug in the entire world (they hold the patent). That's a monopoly. That's why they can keep that price.
(Let me be clear, a study I found, claims that the prices can be easily reduced because they are not based on the complexity of producing the drug)
My point is that when we discuss the prices we are not just talking about US. Instead, we are also talking about other countries where salaries and policies are different.
In short, the pharmaceutic industry is evil. They produce a drug, create a patent, monopolize the market, and then put prices that can only be paid by people who live in the richest countries. What about the rest of the planet?
The problem with this drug is its price, $1,000 each pill. The full treatment is around $60,000. My mother cannot dream of paying that kind of money in Cuba. I live in France, if I get infected with hepatitis, the french social security system would cover the treatment because I'm a tax payer, but I cannot transfer this right to my mother.
Unfortunately, I don't have the money to pay for it by myself.
As the article says, the company that produces Sovaldi is having profits of 50%. They are the only producer of this drug in the entire world (they hold the patent). That's a monopoly. That's why they can keep that price.
(Let me be clear, a study I found, claims that the prices can be easily reduced because they are not based on the complexity of producing the drug)
My point is that when we discuss the prices we are not just talking about US. Instead, we are also talking about other countries where salaries and policies are different.
In short, the pharmaceutic industry is evil. They produce a drug, create a patent, monopolize the market, and then put prices that can only be paid by people who live in the richest countries. What about the rest of the planet?
70
Inti, Cuba as a low income country qualifies for receive substantially discounted Sovaldi, at a cost of $800-1,000 for a cure. So your Mother can be cured easily now. The Cuban government can obtain these compounds through generic pharmaceutical makers in India who have concluded manufacturing deals with 8 India companies to produce generic Sovaldi and Ledipasvir for 91 low income nations. For a complete list of all eligible countries, check out the link below.
See http://www.healthclearstrategies.com/91-low-income-countries-where-gilea...
See http://www.healthclearstrategies.com/91-low-income-countries-where-gilea...
1
The Cuban National health system is very good. It doesn't depend on drugs that extend life, it's based on preventive care and the overall good health of it's citizens. While statistically very good it has a low priority of taking care of chronic deadly diseases that may extend life but comes at great cost.
You seem to be complaining about both the evil drug companies and single payer systems that put a premium on health but not on treating chronic conditions. It's very difficult to do both and value health care models like Cuba's, which is statistically very good over a large population, would never develop a drug for your mother condition at any price.
You seem to be complaining about both the evil drug companies and single payer systems that put a premium on health but not on treating chronic conditions. It's very difficult to do both and value health care models like Cuba's, which is statistically very good over a large population, would never develop a drug for your mother condition at any price.
1
There are equally effective options available (including Viekira from Abbvie) and mopre on the way
1
Medicare was created to solve a non-existent problem. It is yet another example of government interfering in a free market, and destroying the advantages a free market delivers, which government in its leprous ineptitude, is incapable of delivering.
What does a free market look like? Look at the computer industry - every year, products are created and sold and bought that are better AND cheaper than they were the year before. Look at the cellphone industry - same thing. Drug makers are no different - they create and develop and sell their products. But there is a difference - the government doesn't interfere much (yet) in the computer or cellphone industries, but has been interfering in the drug industry for a hundred years.
Of course, as an icon of government interference in freedom, Ezekiel Emanuel is going to cheer on "more of the same". He has no "new" ideas. He wants to create more government, more rules, more regulation. And yet refuses to point to a single instance of where any job, or business, or person found it easier, or better, or less expensive to produce anything as a result of adding more government to the process.
Send Ezekiel back to the dustbin of history. Which is where he and his Might Makes Right ideas belong.
What does a free market look like? Look at the computer industry - every year, products are created and sold and bought that are better AND cheaper than they were the year before. Look at the cellphone industry - same thing. Drug makers are no different - they create and develop and sell their products. But there is a difference - the government doesn't interfere much (yet) in the computer or cellphone industries, but has been interfering in the drug industry for a hundred years.
Of course, as an icon of government interference in freedom, Ezekiel Emanuel is going to cheer on "more of the same". He has no "new" ideas. He wants to create more government, more rules, more regulation. And yet refuses to point to a single instance of where any job, or business, or person found it easier, or better, or less expensive to produce anything as a result of adding more government to the process.
Send Ezekiel back to the dustbin of history. Which is where he and his Might Makes Right ideas belong.
1
Huh?
3
There is a tiny difference between healthcare and computer industry. You may decide not to buy another Samsung S-whatever if the price is too high and stick with your old phone. But if you get Hep-C or cancer, you don't have a choice.
3
The electronics and computer industries had massive government participation through the defense department till they reached a stage where they could produce goods that were commercially viable. And considerable amount of R&D in the biological sciences occurs in universities from public funding through the NIH. Therefore I am not sure where your claims of free market come from. There is hardly an area where there is price determination through the forces of the free market. Oil being the biggest example. Regardless of all this, public health is a monumental issue which cannot be left for the "invisible hand" to decide.
2
High prescription drug prices are not only a problem with cancer and rare illnesses, but even in primary care practice I'm astounded by older meds that cost much more than I ever would have anticipated (insulin, albuterol HFA, colchicine, etc.). Many, many patients are now hitting their Medicare Part D "doughnut hole" and deciding which medicines they won't be taking for the rest of 2015, often with disastrous consequences.
A huge help would be legislation to create a system in which the provider would be able to tell how much the patient will pay when they go to the pharmacy at the moment of the prescription being written (for this particular medicine, on this particular health plan, etc.). I don't only want a little green check that it's "on-formulary," I want to know what the bill is going to be. When I'm really dreaming, I imagine it would also list cheaper, equally effective alternatives.
Patients are stunned we don't have that now. It's like a grocery store with no prices until you check-out, and some days the bananas are $50 per pound.
A huge help would be legislation to create a system in which the provider would be able to tell how much the patient will pay when they go to the pharmacy at the moment of the prescription being written (for this particular medicine, on this particular health plan, etc.). I don't only want a little green check that it's "on-formulary," I want to know what the bill is going to be. When I'm really dreaming, I imagine it would also list cheaper, equally effective alternatives.
Patients are stunned we don't have that now. It's like a grocery store with no prices until you check-out, and some days the bananas are $50 per pound.
48
Slightly off topic, but it's much worse for patients to try to get an estimate for surgical procedures before routine surgeries. At least with meds, we can get a ball park idea. With surgeries, NOBODY wants to give us a cost estimate. Not the doctor, not the hospital, not the insurer. Trying to budget for a routine surgery is an exercise in futility. Many hospitals will give a sizable discount for cash prepayment- but of what amount?
Hate to be cynical, but unless there is campaign finance overhaul, the pharma industry will not be constrained. Physician payments, and to a lesser degree hospital reimbursements have be severely reduced, but drug costs continue to soar. Money for elections and post political career jobs provide the incentive to enrich big pharma. Drug costs drive premiums on insurance policies and reduce incomes. They needlessly diminish the living standard of older Americans. Only a revolution or financial collapse will change the was the government operates.
57
That is not cynicism, that is realism. There is a big difference.
Everybody knows that high drug prices, insurance premiums, impossible costs of dental care, and the like can't continue. So far the solution has been for the industries affected to cannibalize insurance agents, cut services, merge to further monopolize, jack up prices for everything, and basically act as if they were about to just take the money and run.
Those who can have been posting profits in selected foreign countries, which have no tax consequences, and the profits so expatriated have become astronomical, especially among the Pharmaceutical companies, yet they cry about incentives and the costs of research and development.
The problem isn't finding the tools to fix the system. The problem is that K Street controls the media and the Congress, which has led to entire working class constituencies, which have been consistently tricked by practised ideologues, into eschewing their own interests for the interests of plutocrats.
The plutocrats are laughing all the way to the bank, only to realize that they can only hoard their ill gotten gains, if they want to evade taxes. Entire segments of the society are holding one another hostage in a Mexican Standoff, and between connivance and ignorance, the result is that only a very few who can collateralize derivatives in order to play at the Wall Street Casino have a chance of winning.
What a way to run a country! A lot of us can clearly see the ditch, but we are perfectly willing to drive right into it. Go figure!
Those who can have been posting profits in selected foreign countries, which have no tax consequences, and the profits so expatriated have become astronomical, especially among the Pharmaceutical companies, yet they cry about incentives and the costs of research and development.
The problem isn't finding the tools to fix the system. The problem is that K Street controls the media and the Congress, which has led to entire working class constituencies, which have been consistently tricked by practised ideologues, into eschewing their own interests for the interests of plutocrats.
The plutocrats are laughing all the way to the bank, only to realize that they can only hoard their ill gotten gains, if they want to evade taxes. Entire segments of the society are holding one another hostage in a Mexican Standoff, and between connivance and ignorance, the result is that only a very few who can collateralize derivatives in order to play at the Wall Street Casino have a chance of winning.
What a way to run a country! A lot of us can clearly see the ditch, but we are perfectly willing to drive right into it. Go figure!
41
How about a law that bans the public advertising of prescription drugs? What costs for these incessant high-priced commercials get passed on to the consumer? All of them, I bet. Let's start a ban--advertising-of-prescription-drugs movement.
306
decades ago, lawyers, drug companies, healthcare providers...were prohibited to advertise on tv, radio, magazine...until they got the court to agree with them that this is impeding their "free speech right". after that all hell broke lose.
3
Great idea. Let's start with Cialis and Viagra. That stuff must be hard to explain to little kids.
1
That was the law until President Clinton signed a bill allowing direct -to-patient advertising.
The problem is that we are caught in the belief that if we reign in the price gouging, we won't see research. That, of course, is ridiculous, and nothing more than fear mongering on the part of the drug companies, who are trying to get every penny they can, while the good times roll. We need to dare to be great. This was another one of those deals by our government, however, that sent us down the greasy shoot, when Bush through Medicare under the prescription drug bus and in addition, basically prevented the purchase of drugs from Canada. Ours is not the Swiss government, so we are really being sold down the river on both sides of the stream. Bernie would fix that. Clinton probably wouldn't.
64
I worked in the pharmaceutical industry. They spend less on research and more on marketing. If they weren't spending so much on marketing they might do a better job on the research. It's great to see all these healthy looking people taking arthritis drugs, diabetes meds, psychiatric meds, and libido enhancing drugs on commercials or ads in magazines. The reality is that many of the people who need these medications are not upper middle or upper class. They are not all the picture of health. And some can barely afford the co-pays. But that doesn't matter to the pharmaceutical industry. They need to recoup the costs of research. They need to pay their CEOs. They need to spend on marketing rather than looking into how the drug's side effects affect patients, if the drug is safe enough, and on denying how damaging some "secret" side effects can be. It's much more fun to do that than it is to reward the research staff with decent salaries and benefits, to inform the FDA and physicians about the efficacy of a new drug. This is another issue that can be traced back to unbridled capitalism. It's not about helping patients. It's about making money at any cost.
4
Bernie is the only one running worth voting for. however, most americans think socialism is a swear word...despite the fact that medicare, social security, public education, libraries, publicly funded roads, medicaid, national parks, etc. are all based on socialist ideas. but yeah, americans are so uninformed and emotionally pliable that real change will only come when it is all burning to the ground.
Prof Alan Sager of BU has spent much of his career studying drug companies. He has found that they spend about 11% of their budget on R & D, 19% on profit (about twice the average of all industries) and 34% on "Marketing". This includes not only the odious TV and magazine ads, but the thousands of unqualified "pushers" who visit physicians' offices to get them to use various drugs and the many payments to doctors such as fake educational conferences at fancy resorts and stipends to give talks to other doctors based on faulty information supplied by the drug company. The purpose of all this "marketing" is to get us to use drugs we do not need or to use expensive new drugs even when cheaper older drugs are as effective or even more effective. It is clear that we could cut drug prices by at least a third and not impact research at all.
319
"...this "marketing" is to get us to use drugs we do not need..."
All drugs have side effects. Thus doctors are doing harm if they prescribe drugs to people that we do not need.
I agree with you that, sadly, this is the case. I know so many wonderful doctors, but I know very few who are self-aware enough to understand that they are influenced by the drug reps they allow in their offices; by every free lunch or delivered sandwich "given" by big pharma; and certainly by money received for giving talks paid for by pharma, or doing studies paid for by pharma.
The money of the pharmaceutical industry corrupts our government, our healthcare system, and as we all know it pollutes our media. Prescription drugs are the #3 cause of death in America. (You could read Peter C Gotzsche's book called Deadly Medicines, winner of the BMA first prize.)
All drugs have side effects. Thus doctors are doing harm if they prescribe drugs to people that we do not need.
I agree with you that, sadly, this is the case. I know so many wonderful doctors, but I know very few who are self-aware enough to understand that they are influenced by the drug reps they allow in their offices; by every free lunch or delivered sandwich "given" by big pharma; and certainly by money received for giving talks paid for by pharma, or doing studies paid for by pharma.
The money of the pharmaceutical industry corrupts our government, our healthcare system, and as we all know it pollutes our media. Prescription drugs are the #3 cause of death in America. (You could read Peter C Gotzsche's book called Deadly Medicines, winner of the BMA first prize.)
2
Yes, anyone who knows a Drug Rep knows they have one of the cushiest jobs and biggest expense accounts of any job in the world. They must be personable, pretty, and have no conscience at all about what they are a part of.
I spoke to a drug rep about his being part of such unscrupulous tactics and he shrugged his shoulders and said: " ...if it weren't me making 200K doing this, it would be somebody else..."
Of course we were golfing at the time. He had to stay sharp on the course for business purposes only.
He worked for Merck.
I spoke to a drug rep about his being part of such unscrupulous tactics and he shrugged his shoulders and said: " ...if it weren't me making 200K doing this, it would be somebody else..."
Of course we were golfing at the time. He had to stay sharp on the course for business purposes only.
He worked for Merck.
3
We're nearing the point where discussing the possibility that nationalizing the pharmaceutical industry is the only viable option. Maybe we should open that discussion now. Nothing else seems to get the attention of profit-seeking CEOs, hedge fund managers and stock traders who like things just the way they are. We seem to like disruption elsewhere. Let's try it here.
84
Marx & Lennon, Nationalizing the big pharma companies would obviously generate lots of gnashing of teeth and wailing about how ineffective that would be... But, I completely agree with you, we are long past the time this is needed. And I would like to add Big Oil to that nationalizing list.
1
Medical care, including pharmaceuticals, does not belong in the private, for-profit sector. Period.
259
I am surprised to find Switzerland's system mentioned as a possible solution to high drug prices. The pharma industry is exceptionally strong when it comes to lobbying in Switzerland and they have found very creative ways to circumvent regulation by the government. Many representatives of the pharma industry "consult" swissmedic, the government agency which authorizes new medications. Information asymmetry and lax legislation results in them often getting their way. One common strategy has been altering carrier substances of existing drugs (not the active compounds themselves), relabel packaging and selling them for 30-40 times the price as before (Examples are Thalidomid and the drug Campath, both are cancer drugs).
7
Coming up with common-sense solutions to high drug prices in the United States is long over due. The methods of controlling costs used in Australia and Switzerland and in most countries with universal healthcare systems show that it can be done. But there is one other component needed: a Congress that is willing to buck the drug lobby and do the right thing for the American people. I can't see that changing with the current Congress.
65
with only ~40% of voters showing up, we only need a couple candidates to tap into that 60% to have a true social mandate. You want to see politicians change their ways? Show up with a majority of voters, they'll drop whatever lobby we ask them to if we keep them in office. Motivating that 60% and ensuring they can actually take the day to go vote....there's the rub. Career politicians have so gerrymandered the voting process that a write in campaign may be the only way. try educating the average american on how to properly cast a write in vote...this mountain just gets bigger and bigger.
U.S. Government has been in decline the past 30 years or so, all in the name of free market capitalism. Hands-on regulation on substantive issues has virtually disappeared. From drugs to telecom to aviation to law enforcement, what we see is across-the-board is reluctance to engage forcefully on the issues.
Initially the reluctance was attributable to acts of largesse and well thought-out intelligent policy on the part of government. Over time however, it's apparent deference is no longer a choice. We have neither the will, nor the competence, nor the power, to bring regulatory issues like the one opined here to any sort of conclusion beyond hot debate lasting about 12 hours.
Sure, if decisions involve increasing or decreasing a number by a fraction, count on government to give it serious thought, debate and ultimately deliver (assuming the spotlights are always on).
But price-controls for high-priced drugs? Internet in the boondocks? Clamp-down on hate speech? Gun control? Deny approvals for funny-drugs? Fix infrastructure? Fuh Get It. Just Fuh Get It.
Initially the reluctance was attributable to acts of largesse and well thought-out intelligent policy on the part of government. Over time however, it's apparent deference is no longer a choice. We have neither the will, nor the competence, nor the power, to bring regulatory issues like the one opined here to any sort of conclusion beyond hot debate lasting about 12 hours.
Sure, if decisions involve increasing or decreasing a number by a fraction, count on government to give it serious thought, debate and ultimately deliver (assuming the spotlights are always on).
But price-controls for high-priced drugs? Internet in the boondocks? Clamp-down on hate speech? Gun control? Deny approvals for funny-drugs? Fix infrastructure? Fuh Get It. Just Fuh Get It.
13
Excellent article. Value is the real issue which should influence drug pricing. Sovaldi is worth the cost but a drug which prolongs life by an average of 3.2 months is not worth $150,000 a year. But watch out for the spin that we want to let cancer patients died.
22
Patients should be informed about the true cost of drugs. In the case of Solvadi, if informed, I would turn it down.
1
Suzanne:
You can always make an informed decision to turn down a drug like sovaldi if it is your opinion that preventing cirrhosis, hospitalizations for liver disease, liver cancer, liver transplant and death are not worth the cost. We can argue about the true cost of sovaldi but the value and benefits are undeniable. This is not the case for many cancer drugs and many other drugs.
You can always make an informed decision to turn down a drug like sovaldi if it is your opinion that preventing cirrhosis, hospitalizations for liver disease, liver cancer, liver transplant and death are not worth the cost. We can argue about the true cost of sovaldi but the value and benefits are undeniable. This is not the case for many cancer drugs and many other drugs.
The idea that government can intrude upon the free market, affect prices, and win concessions for the little guy is absurd. The pharma industry is a profit-driven enterprise and anything that diminishes profits will inevitably diminish R&D. It would be better if the billions of dollars of federal research grants were awarded for truly good research and no into finding out whether gypsy moths see or feel light and other such nonsensical "research." Also, the prescription drug user fee act and other such innovations have increased the cost of drug development, a cost that must be passed along to the consumer. Companies are more than willing to pay these costs knowing that they will recover them in sales of overpriced drugs. In short, this author gives us no new insights to the problem but wants more government intrusion -- yet, it has been that intrusion that arguably has caused the problem in the first place.
2
Sice drug companies spend THREE times as much on marketing as on research (34% v 11%), here are some government intrusions that will save money.
1. Forbid prescription drug advertising. This can be done by an act of Congress and IS done in all other developed countries.
2. Require pushers (aka drug reps) to have a degree in pharmacology, medicine or biology. This will effective eliminate them.
3. Strongly regulate the payments of drug companies to physicians including vacations to fancy resorts disguised as conferences, lectures to spread false or incomplete information (with an expensive dinner included), payments for non-existent research, etc.
http://www.nytimes.com/2007/11/25/magazine/25memoir-t.html?pagewanted=all
http://www.theatlantic.com/magazine/archive/2006/04/the-drug-pushers/4714/
http://dcc2.bumc.bu.edu/hs/sager/pdfs/020402/Pharmaceutical%20Marketing%...
1. Forbid prescription drug advertising. This can be done by an act of Congress and IS done in all other developed countries.
2. Require pushers (aka drug reps) to have a degree in pharmacology, medicine or biology. This will effective eliminate them.
3. Strongly regulate the payments of drug companies to physicians including vacations to fancy resorts disguised as conferences, lectures to spread false or incomplete information (with an expensive dinner included), payments for non-existent research, etc.
http://www.nytimes.com/2007/11/25/magazine/25memoir-t.html?pagewanted=all
http://www.theatlantic.com/magazine/archive/2006/04/the-drug-pushers/4714/
http://dcc2.bumc.bu.edu/hs/sager/pdfs/020402/Pharmaceutical%20Marketing%...
5
The free market isn't free, it's very expensive. Greedy, in fact. Drug company executives don't seem to care very much about other people; they care about themselves, their bank accounts and their lifestyles. I'm not sure how we relearn caring about each other, but this selfish attitude is making living in this country almost intolerable.
114
The history of civilization shows few, if any, examples of people caring for one another, at least on a grand scale. Rational choice theory suggests we are rational beings and reach choices and decisions on the basis of self-interest, a common sentiment observable in all animal species. The notion that drug company executives should not act in their own self-interest is to say that we should not have drug company executives. Utopia does not exist. We must deal with the world that is, not the one we would like to see.
"Propose a comprehensive solution" is a new code for, "nothing will get changed".
The solutions proposed are interesting. As someone who grew up and worked under the old US system (pre-ACA) and currently lives in a democratic socialist system, I can fully appreciate both proposed solutions.
The Australian an the Swedish models have great results. Now think of the US press sound bites: "Government setting prices!" "Government making lists of what drugs are good and bad!" "It is socialism; communism!" You have to be willfully ignorant or disingenuous to propose that either plan has a more than 0.1% chance of becoming law in 2015 America.
This is "making the good the enemy of the perfect". The ACA is a compromise that moves us in the right direction* (lower costs for the same or better health care), while not being single payer. Good. Not perfect.
The restriction on Medicaid being blocked from negotiating prices for their customers is something everyone can understand. It is clearly unfair. Stopping something that is clearly unfair is far more achievable than a "comprehensive solution" that fixes everything.
Like the ACA, removing the restriction that Medicaid can't negotiate on drug prices would move us in the right direction* and would, also like the ACA, create incentives to improve the system as a whole. Good. Not perfect.
The solutions proposed are interesting. As someone who grew up and worked under the old US system (pre-ACA) and currently lives in a democratic socialist system, I can fully appreciate both proposed solutions.
The Australian an the Swedish models have great results. Now think of the US press sound bites: "Government setting prices!" "Government making lists of what drugs are good and bad!" "It is socialism; communism!" You have to be willfully ignorant or disingenuous to propose that either plan has a more than 0.1% chance of becoming law in 2015 America.
This is "making the good the enemy of the perfect". The ACA is a compromise that moves us in the right direction* (lower costs for the same or better health care), while not being single payer. Good. Not perfect.
The restriction on Medicaid being blocked from negotiating prices for their customers is something everyone can understand. It is clearly unfair. Stopping something that is clearly unfair is far more achievable than a "comprehensive solution" that fixes everything.
Like the ACA, removing the restriction that Medicaid can't negotiate on drug prices would move us in the right direction* and would, also like the ACA, create incentives to improve the system as a whole. Good. Not perfect.
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The ACA is only a step in the right direction. Allowing Medicare and Medicaid to negotiate prices would be another step in the right direction.
For working people who have to rely on insurance, ACA hasn't been able to help with drug prices and allowing Medicare and Medicaid to negotiate won't help much either.
The name of the game in the U.S. is Milk the Working Middle Class for all the profit you can get. It's easy because they're too busy and tired to fight it. The working middle class, at least what's left of it, and the working poor need more help with the prices for meds and health care so we can keep on working and supporting everyone.
For working people who have to rely on insurance, ACA hasn't been able to help with drug prices and allowing Medicare and Medicaid to negotiate won't help much either.
The name of the game in the U.S. is Milk the Working Middle Class for all the profit you can get. It's easy because they're too busy and tired to fight it. The working middle class, at least what's left of it, and the working poor need more help with the prices for meds and health care so we can keep on working and supporting everyone.
3
Imagine - a LAW than prohibits the government from negotiation for lower prices. How does this happen?
'Tauzin resigned from Congress and began work as the head of the Pharmaceutical Research and Manufacturers of America, or PhRMA, a powerful trade group for pharmaceutical companies, for a salary outsiders estimated at $2 million a year. Five years later he announced his retirement from the association (as of the end of June 2010).[5]
Two months before resigning as chair of the committee which oversees the drug industry, Tauzin had played a key role in shepherding through Congress the Medicare Prescription Drug Bill."
The revolving door and campaign contributions! It would take a law to cure this, but its obviously a Catch-22!
'Tauzin resigned from Congress and began work as the head of the Pharmaceutical Research and Manufacturers of America, or PhRMA, a powerful trade group for pharmaceutical companies, for a salary outsiders estimated at $2 million a year. Five years later he announced his retirement from the association (as of the end of June 2010).[5]
Two months before resigning as chair of the committee which oversees the drug industry, Tauzin had played a key role in shepherding through Congress the Medicare Prescription Drug Bill."
The revolving door and campaign contributions! It would take a law to cure this, but its obviously a Catch-22!
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Every person in a committee which oversees any industry should be banned for life to get revolving-door employment there.
2
Couldn't agree more!
But in the meantime, you know all the noise about policemen wearing cameras while out on duty?
Why not make every legislator wear one every time he/she meets will a "lobbyist" with a public release of all written communication between them?
But in the meantime, you know all the noise about policemen wearing cameras while out on duty?
Why not make every legislator wear one every time he/she meets will a "lobbyist" with a public release of all written communication between them?
1
There is no need to have our government negotiate drug prices with pharmaceutical companies, we all know how that would turn out.
Simply make a law that a drug may not be sold in the US at a price exceeding the average price in other developed nations.
Simply make a law that a drug may not be sold in the US at a price exceeding the average price in other developed nations.
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Because we have the best Congress money can buy, Dr. Emanuel's claim that "Everyone, including drug company executives, believes that high prices cannot continue" is questionable. According to the Center for Public Integrity, in the last seven years the industry spent more than $800 million in federal lobbying and campaign donations. Congress is very likely to stay bought and it's their decision that Medicare can't bargain for drug pricing. They are probably being asked to do something about the VA, that apparently still can...
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"Even if profits were cut by a third or a half, there would be sufficient incentive to assume the risks of drug development."
That's easy for you to say. You are not the one getting stinking filthy rich on those profits. Think of those poor people who would lose those profits. Well, they are not poor but still....
That's easy for you to say. You are not the one getting stinking filthy rich on those profits. Think of those poor people who would lose those profits. Well, they are not poor but still....
9
Single payer and cost controls - every other advanced nation has discovered this and it's the only way out. It will happen eventually, but not before a lot of Americans have to needlessly suffer. Capitalism, like fire, has helped billions, but it must be controlled.
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Capitalism is the fire of our economic life
A great servant
But a terrible Master
A great servant
But a terrible Master
People who know better buy their expensive prescriptions in Canada - in many cases from online pharmacies. After you get disgusted, extorted and just plain fed up - that's what you do.
It's a pain in the neck to use a foreign pharmacy - it takes research. Then there's the fear factor - is it safe?
But millions of Americans cross that bridge - because they have to.
The big drug companies are getting exactly what they deserve.
It's a pain in the neck to use a foreign pharmacy - it takes research. Then there's the fear factor - is it safe?
But millions of Americans cross that bridge - because they have to.
The big drug companies are getting exactly what they deserve.
19
Canada saved me when I was uninsured.
1
A nation of upper income, better educated drug smugglers.
I hope that there will be a blanket amnesty.
More likely fines to be paid directly to drug companies to compensate them for their losses.
I hope that there will be a blanket amnesty.
More likely fines to be paid directly to drug companies to compensate them for their losses.
Dr. Emanuel highlights a much larger problem regarding health care costs-- the pricing power of "not for profit health system cartels" --huge, multibillion dollar, vertically and horizontally integrated regional conglomerates-- integrated for private insurer price, revenues, and profit maximization. As Dr. Emanuel notes: "The bigger problem, though, is that Medicare negotiations would do nothing to contain drug (substitute here: hospital, physician, home health, ER, diagnostic, PT, ambulatory surgery, and almost anything else health related ..) prices for the 170 million Americans who have private health insurance. Having the federal government negotiate lower prices for Medicare would most likely drive up prices on the private side as drug (substitute here, regional health systems) companies tried to recoup their “lost” profits".
In an environment of no anti-trust enforcement, such regional health system cartels routinely control 50%+ marketshare in many metropolitan areas. The boards of these not for profit health system cartels reward health executives multimillion dollar bonuses for consolidation as well as achieving higher private insurer prices, revenues, and profitability. How does that benefit patient or community interests?
What's wrong with this picture? Nothing, unless you happen to be a patient, or employer paying exorbitant private health insurance premiums and private sector provider prices--- often more than double what Medicare pays!
In an environment of no anti-trust enforcement, such regional health system cartels routinely control 50%+ marketshare in many metropolitan areas. The boards of these not for profit health system cartels reward health executives multimillion dollar bonuses for consolidation as well as achieving higher private insurer prices, revenues, and profitability. How does that benefit patient or community interests?
What's wrong with this picture? Nothing, unless you happen to be a patient, or employer paying exorbitant private health insurance premiums and private sector provider prices--- often more than double what Medicare pays!
9
Actually, the way it's done now, some drugs can be refused on part D. For example, I use Aetna for my part D coverage and I've had to have Symbicort (asthma drug) and Nexium donated through the drug company' "acess to care" program, because they aren't covered by insurance.
2
Yes, Karen. I had to switch from a drug I have used for 5 years (wile on private insurance) to another drug once I went on Medicare and Part D. Thankfully the new drug works pretty much as well, but I sure don't understand the reasoning behind this behavior by the Part D insurance companies.
"We must come up with a comprehensive solution now." How does Dr Emanuel propose for this to happen, given the divisiveness of Congress, the difficulty of imposing a reduction of profits for powerfully lobbying pharmaceutical companies, and the unpopularity of blandly successful collective efforts like Obamacare ? Logically it is easy to see why the US should not willingly be spending 2 to 3 times what other developed countries pay for equivalent care and products. I'd love to hear some concrete ideas from somebody as experienced as Dr Emmanuel about the path to a saner health policy.
3
It is not up to Dr Emanuel to fix Congress. We the voters need to do this.
There's no benefit to whining about Congress. More voters need to respectively educate their circle (without insulting people who disagree) by sharing simple, clear examples.
There's no benefit to whining about Congress. More voters need to respectively educate their circle (without insulting people who disagree) by sharing simple, clear examples.
3
It has long been my belief that most pharmaceuticals are developed at least in part with funding from the Government yet the Government does not get a share of the patents or the financial returns. We foolishly give that away. For example, the first drug Dr. Emanuel mentions in this opinion piece is the cancer drug Yervoy which he states routinely costs in excess of $120,000/year. Yervoy was developed from research done by James P. Allison while he was Director of the Cancer Research Laboratory at the University of California, Berkeley. How is it that the Government does not own at least a partial interest in this drug? We should be able to set the price or at the very least get a big cut of the profits from this drug that could be used to lower the cost for the public. The system is rigged against the tax payers and the patients. What we have now is tax-payer funded research costs for private gain and that is outrageous.
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Eric, the last word,"outrageous" doesn't come close to hitting the true mark on this. After reading your comment ending with that final word, I thought unprintable thoughts
1
Don't be simple. Our political and economic system is one and the same. There is no politics without economics and vice versa. In the United States it is all corrupted by money and government exists to protect those who have money. The is no other use for government but to protect those who have money usually lots of money. In high places there is no concern that money is a necessary ingredient for sustenance of life and those who cannot scrape enough money together to make life anything but hard scrabble are scorned. If life has no quality due to lack of monetary resources then an individual fault is indicated which is of course no concern who control the wealth of the nation. It is a complex problem but for as long as money is revered in the United States as a selfish possession our country will continue to slide down the slippery slope of complete political and economic disregard for tens of millions of citizens. Common humanity is not enough to inspire our too many current leaders to forgo amassing huge fortunes for themselves at the expense of others.
You ask, "How is it that the Government does not own at least a partial interest in this drug?"
The answer is that the drug industry owns a big part of the government.
We know this, and we also know how they do it. To many people it's comparable to the drug czars that take over the governments of other countries.
The answer is that the drug industry owns a big part of the government.
We know this, and we also know how they do it. To many people it's comparable to the drug czars that take over the governments of other countries.
3
From what I understand, the drug companies spend more on advertising than on research. If advertising (and expensive "conferences" at vacation hot spots, etc.) were illegal or heavily penalized, the cost to the companies would be lowered. In theory, this could be passed on to the consumer. A cure for cancer really does not need much advertising, does it?
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Ed, good point...if you deduct the cost of advertising and "conferences", I wonder what the ACTUAL profits would look like??? 70%, 80%???
Yes, it's very easy to decry the cost of drugs and pile the onus on the pharmaceutical companies. And yes, some drugs are definitely overpriced in the grand scheme of things (Sovaldi being the prime example). Yet we need to give this some perspective. Drug costs account for approximately 10% of all healthcare costs. The biggest culprit is hospital costs by a wide margin.
Let's also not forget the costs of treatments. To wit, I was recently tested as a potential bone marrow donor for a close relative (turns out I was only a half-match). The cost for the test (which analyzed my blood)? Approximately $30,000—paid by the patient's health plan. The cost for her stay in the hospital? To date (and she's out now) it's over $1 million for four weeks. The cost of the drugs she was administered (and worked) was a couple of thousand dollars. Hmm...
Why are hospitals so large a share of costs? A couple of years ago the Times did run an informative article noting some facilities charge patients $69 for a generic aspirin. Hospitals have had to do this because they are mandated to provide free medical treatment for the uninsured (thanks, Ronald Reagan).
The Affordable Care Act addresses this by insuring the uninsured so they don't receive routine medical care in emergency departments. Over the next 10 years, savings of over $1 trillion are expected to be realized (so far we're ahead). But have hospitals passed on these savings to consumers or health plans? Of course not. Not one dime.
Let's also not forget the costs of treatments. To wit, I was recently tested as a potential bone marrow donor for a close relative (turns out I was only a half-match). The cost for the test (which analyzed my blood)? Approximately $30,000—paid by the patient's health plan. The cost for her stay in the hospital? To date (and she's out now) it's over $1 million for four weeks. The cost of the drugs she was administered (and worked) was a couple of thousand dollars. Hmm...
Why are hospitals so large a share of costs? A couple of years ago the Times did run an informative article noting some facilities charge patients $69 for a generic aspirin. Hospitals have had to do this because they are mandated to provide free medical treatment for the uninsured (thanks, Ronald Reagan).
The Affordable Care Act addresses this by insuring the uninsured so they don't receive routine medical care in emergency departments. Over the next 10 years, savings of over $1 trillion are expected to be realized (so far we're ahead). But have hospitals passed on these savings to consumers or health plans? Of course not. Not one dime.
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I'm not sure why you are switching attention to hospitals. Yes they are expensive, but their margins are razor thin. If you read the editorial, the point is made that Solvadi actually delivers value for it's enormous price. That being said, it'd be nice if Trump called out Congress for protecting pharma companies by preventing the govt from negotiating and not reforming patent law to stop shenanigans like minor changes extending patent life, and not addressing pharma companies that pay competitors to not bring drugs to market.
1
I agree with all your points -- but would add that a percent reduction in costs here and there does add up to a lot of money. So while we go after reducing hospital costs, all other cost reductions should be pursued as well. Dr. Emanuel once wrote a piece on the amounts that could be saved from health insurance company reductions, reduced number of tests etc. -- he argued that reductions in any would not be a silver bullet. He never added them all up. I say go after every little bit here and there -- it will add up to substantial savings.
3
Kofender wrote:"The Affordable Care Act addresses this by insuring the uninsured so they don't receive routine medical care in emergency departments."
According to usa today May 4, 2015(http://www.usatoday.com/story/news/nation/2015/05/04/emergency-room-visi..., "Three-quarters of emergency physicians say they've seen ER patient visits surge since Obamacare took effect — just the opposite of what many Americans expected would happen."
Kofender wrote: "Hospitals have had to do this because they are mandated to provide free medical treatment for the uninsured (thanks, Ronald Reagan)."
Presidents can not make law, they can only sign into law bills provided by congress so congress deserves a thank you as well.
According to usa today May 4, 2015(http://www.usatoday.com/story/news/nation/2015/05/04/emergency-room-visi..., "Three-quarters of emergency physicians say they've seen ER patient visits surge since Obamacare took effect — just the opposite of what many Americans expected would happen."
Kofender wrote: "Hospitals have had to do this because they are mandated to provide free medical treatment for the uninsured (thanks, Ronald Reagan)."
Presidents can not make law, they can only sign into law bills provided by congress so congress deserves a thank you as well.
1