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Tag: drug prices
Can These Corporate Titans Reform Health Care — And Tame Big Pharma?

Can These Corporate Titans Reform Health Care — And Tame Big Pharma?

President Trump offered few words about health care in his State of the Union address. He did mention drug prices, though.

“One of my greatest priorities is to reduce the price of prescription drugs,” he said. “In many other countries, these drugs cost far less than what we pay in the United States. … That is why I have directed my administration to make fixing the injustice of high drug prices one of my top priorities.”

Which is an interesting thing for Trump to say, given that he has just made Alex Azar, a top executive at drugmaker Eli Lilly, head of Health and Human Services. Lilly tripled the price of insulin during Azar’s tenure there. Suffice it to say, the one injustice Eli Lilly does not want to fix is high drug prices.

There was a bigger story going on, and it was not unrelated. Amazon, Berkshire Hathaway and JPMorgan Chase announced that they are putting their heads together to create a health care plan for their 1.1 million U.S. employees. Sounds like leverage to me. Eight states have fewer people.

During the presidential campaign, Trump vowed that if elected, he would have Medicare negotiate more favorable drug prices with the manufacturers. Since he took office, that pledge has not seen the light of day.

Washington was never good at standing up to the medical-industrial complex. There’s too much money to be made in standing down. And a separation between the public’s wallet and Big Pharma’s desire to extract huge profits is surely one wall Trump will never build.

But the medical industry does not own Amazon, the world’s largest internet company, or Berkshire Hathaway, the conglomerate Fortune ranks as America’s third-most profitable company, or JPMorgan Chase, America’s biggest bank.

The fine details have yet to be revealed, but the stated plan is to create a company that would be free from profit-making incentives. That’s not great news for profit-oriented suppliers. The stocks of UnitedHealth Group, Aetna and CVS — which plans to buy Aetna — all took a beating after the announcement.

The partners say they will use technology to simplify the delivery of health care. And they insist the new system will improve the services available to employees.

The beauty of this corporate trio’s gambit is they are bypassing the politicians. Their aim is to “disrupt” the forces that saddle them with exorbitant prices.

“The ballooning costs of health care act as a hungry tapeworm on the American economy,” Warren Buffett, Berkshire’s fabled CEO, stated with trademark simplicity.

Wonder what they’re going to do about drug prices. The drug Humira offers a window into the challenges.

According to the ads, Humira enables a woman hurting from rheumatoid arthritis to chase her puppy all over the house. (“Ask your doctor about Humira.”) In 2012, Humira cost a ridiculous $19,000 a year. Its maker, AbbVie, recently raised the price to a piratical $38,000.

The bottom line is that the U.S. spends nearly twice as much on health care as a percentage of the economy as do other industrialized countries — while its people use about the same amount of health care. Corporate America has long objected to what this costly health care is doing to its bottom line.

So bringing down the prices is the big game in taming total health care spending. No one says this will be easy, and doubters point to past failed corporate efforts. But these are three giants who don’t scare easily. Amazon has already shown interest in selling pharmaceuticals.

Since Washington won’t do much about the prices for health care, let’s see what Amazon, Berkshire and JPMorgan come up with. Go forth and disrupt, we say.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.

PHOTO: Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks  in Washington, D.C.,  October 13, 2015. REUTERS/Kevin Lamarque

How Can A CEO Feel Good About Being Vile?

How Can A CEO Feel Good About Being Vile?

Corporate price gouging is never nice. But gouging people on the price of medicines they rely on to stay alive is worse than not nice — it’s predaceously evil.

And if you think corporate morality can’t go lower than that, how about gouging people on the price of a life-saving medicine in order to jack up the personal pay of a drug maker’s CEO? That’s the bottom level of grotesque immorality where Heather Bresch dwells. She is chief executive of Mylan, a pharmaceutical profiteer that markets the EpiPen medical device, which literally is a lifesaver for people who suffer deadly anaphylaxis allergy attacks.

These allergy attacks kill nearly 200 people a year in the U.S. alone. Within seconds, something as common as peanuts or a bee sting can cause sever rash, swelling of the airways, drops in blood pressure, shock, and if not treated right away, death. So, naturally, we would want to increase access to the life-saving medicine that prevents these attacks, right?

Increasing that access is hard to do at today’s price. For years, a two-shot packet of EpiPens cost under $100, but Mylan bought the rights to the injectable drug in 2007, gained monopoly control of the market, and in 2012 suddenly began sticking dependent patients again and again with drastic price hikes. Now, the two-pack averages more than $600, with some paying above $900!

Drug makers routinely claim they must charge high prices to recoup their cost of developing their products — but Mylan didn’t develop the EpiPen, taxpayers did. The original research was initiated by the Pentagon back in 1973. Today, the device and the medicine in it cost Mylan only a few dollars to produce, and the product itself is essentially unchanged from when Mylan bought it. So the company’s only real contribution to the EpiPen has been to raise its price by more than 600 percent — a shameful act of sheer profiteering that rips off hundreds of thousands of users and endangers the lives of those families who simply can’t afford it.

Mylan’s CEO, the one responsible for this price gouge, regards herself as a self-made corporate success story — a woman who came out of hard-scrabble West Virginia and scrambled to the top of the food chain at Mylan. “There is a work ethic and grit about [West Virginia] that allows me to help make a difference,” Bresch told the New York Times.

Well, yes, grit, hard work — and having the advantage of being the daughter of the state’s former governor and current US Senator, Joe Manchin III. Take the MBA degree she got from West Virginia University, an academic credential bestowed on her 10 years after she left the school, having completed only about half of the coursework required to get a degree. The state university later conceded that Bresch was awarded this business degree… well, because her father was governor at the time, overseeing the school’s budget. It’s this sort of ethical “grit” that Mylan’s chief exec has employed to pick the pockets of thousands of vulnerable customers who rely on EpiPen.

Heather’s greed has sparked a furious public backlash, leading to congressional investigations. But, again, her “grit” might pay off, for she has bought off several top allergy-patient advocacy groups who are not backing the people. Why? Because she’s been dispensing millions of dollars to them in PR grants, making them “allies” in her blatant price-gouging scheme.

One thing that has risen higher than EpiPen’s price: CEO Heather Bresch’s paycheck. It’s up by 671 percent since 2007, and last year alone she pocketed $18.9 million! But I wonder — is that enough to make her feel good about being so vile? Of Course, Congress and the courts will do nothing to deter her and the other Big Pharma gougers — but surely the lowest level of Dante’s Inferno has rooms reserved for all of them.