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America’s Addiction To Abusive Drug Pricing

Economy Featured Post Health

America’s Addiction To Abusive Drug Pricing


Reprinted with permission from Creators.

Consider what got Martin Shkreli in trouble with the law. Shrkeli is the infamous “pharma bro” who bought patents to lifesaving drugs then hiked their prices to obscene levels. In one egregious example, he raised the price of a 62-year-old drug crucial to AIDS patients by over 5,000 percent.

But this money-or-your-life extortion racket isn’t the root of the case against him. It’s whether he lied to investors.

Defrauding investors is illegal. Charging outrageous prices to desperate patients is not (a point that Shkreli himself repeatedly makes). This is the only advanced country that puts its people’s lives at the mercy of corporate barracudas.

For those who think they can stop these gougers through shaming or otherwise showing them the error of their ways, I wish them luck. Better to pitch a harder ball and get government on the side of the public.

Louisiana is plagued by obesity, opioid addiction and other health crises. It has 35,000 residents with hepatitis C who are on Medicaid or uninsured. Hepatitis C destroys the liver, but the drugs to treat it cost $85,000 for a 12-week regimen. Thus, the state decided to cover only 324 patients already suffering severe liver damage. It was that or have little money left for schools and roads.

But Louisiana’s health secretary has landed on a novel approach that other states are watching. Rebekah Gee has dusted off an old federal law that lets Washington regulators sidestep drug patents in the interests of the public good. A panel has advised Gee to ask Secretary of Health and Human Services Tom Price to let Louisiana use the patents at more earthly prices. Just the possibility of taking such measures could get drug makers to the negotiating table.

Gilead Sciences makes the hepatitis C drugs — Sovaldi and Harvoni — but $85,000 is an only-in-America price. Sovaldi sells for about $1,000 a pill in the U.S. while a generic version costs only $4 a pill in India. Canada pays $55,000 for a course of treatment. France recently got Gilead down to a price of about $33,000.

Gilead adopts the Big Pharma line that drug companies must charge huge sums to pay for the research and development of their pathbreaking products. And Sovaldi is undeniably a fabulous drug. But actually, it’s not Gilead’s invention. The developer was Pharmasset, a company that Gilead bought some years ago. Pharmasset, interestingly, had planned to charge only $36,000 for a course of treatment.

Good capitalists can agree that those who develop cutting-edge drugs deserve to be richly rewarded for their efforts. But then Americans must ask why they alone must bear the costs of bestowing the rewards.

The difference is that our government refuses to intervene meaningfully on the people’s behalf. Even our taxpayers don’t seem to matter. General revenues cover 74 percent of the Medicare drug benefit, yet Congress has forbid the government to negotiate the program’s drug prices.

Clearly, the industry needs a new business model in which costs of development are fairly shared. The same goes for breaks on price.

The real problem in American health care is not that we can’t afford what we need. Other countries with far less resources provide as good or better health care than we do. The problem is that, by international standards, we pay inflated prices for just about everything.

Overpaying has become almost an addiction. We don’t think we can kick it, and the default has been to not even try. Until we move the emphasis from “How do we pay?” to “What are we paying?” we will never stop the abusive pricing of essential drugs.

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.

Froma Harrop

Froma Harrop’s nationally syndicated column appears in over 150 newspapers. Media Matters ranks her column 20th nationally in total readership and 14th in large newspaper concentration. Harrop has been a guest on PBS, MSNBC, Fox News and the Daily Show with Jon Stewart and is a frequent voice on NPR and talk radio stations in every time zone as well.

A Loeb Award finalist for economic commentary in 2004 and again in 2011, Harrop was also a Scripps Howard Award finalist for commentary in 2010. She has been honored by the National Society of Newspaper Columnists and the New England Associated Press News Executives Association has given her five awards.

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  1. Aaron_of_Portsmouth July 13, 2017

    With this story in mind, I think it would be instructive to review 3 “Core Values” of one of America’s Political Parties that describes itself as being “Conservative” in its values, and is known by the acronym “GOP”.

    This Party has been repeating the mantra of Lower Taxes, “Sanctity of Human Life”, and is extremely keen on Business and “Fiscal Responsibility”. From the few core principles I picked, and from the practices of entrepreneurs in America who take advantage of the “Business Climate” so highly touted, we see a startling and deeply disturbing asymmetry between human life, and the promotion of business and the maximizing profits.

    1. Lower Taxes
    American’s cannot and will not continue to pay higher taxes. Even the current
    national, state and local taxes must be decreased to safeguard the financial
    health of our citizens and country.

    2. Smaller Government
    The growth of government must be stopped and reversed by the privatization
    or transitioning of government jobs back to the private sector. According to one
    of America’s top ten economist, the only major city in America that continues to
    show significant growth is Washington D.C. (February, 2010). Government
    growth must be stopped at all levels, national, state and local or we will never
    be able to lower taxes.

    3. Encourage The Growth of Business
    Business growth must be encouraged by all levels of government through the
    elimination of all unnecessary regulations that slow the growth of businesses,
    especially small businesses.

    4. Sanctity of Human Life
    Faithful to the first guarantee of the Declaration of Independence, we assert
    the inherent dignity and sanctity of all human life and affirm that the unborn
    child has a fundamental individual right to life which cannot be infringed.

    If we start with “Sanctity of Human Life”, we see an instance of the failure to be infused with the sanctity of human life, as reiterated time and again in all the Religions which God has sent in progressive stages.
    Big Pharma, with the blessings of the GOP by way of its ideology, is more concerned with profits and brick and mortar than it is with human life. Which is why Martin Shkreli, and the GOP by proxy, encourages gouging if it keeps the business alive—to hell with whether the human being is made a sacrifice for Core Value #3, while talking out of the other side of their mouths about Core Value #4.

    As far as the text of Core Value #4, the GOP demonstrates another asymmetry of its dysfunctional group mentality. By that, I mean the right to life of the fetus is held very high, but as soon as the fetus comes into the world and becomes a toddler, its value becomes diminished. And when the toddler becomes an adult, it value is downgraded even further; and if the fetus is in the womb of a black woman, its value is null and void based on policies directed against the mother and father because of “Race”.

    But whether the child, or adult is of whatever skin color, the predominating sentiment will be in favor of preserving profit, business, and insuring the profit margin of the CEO and other top execs. After all, by Reagan’s reckoning and myopic view, the Shkreli’s of the world would know instinctively to “trickle down” their wealth to ordinary people who are less fortunate. But since the GOP wants to make sure that the have’s maximize their wealth, and discourages the notion of sharing—a “socialist concept” rather than seen as Christian. Besides, in the hypnotic state the GOP has conjured in the minds of the poorer members of society, who follow blindly the “Core Values”, they feel that their plight is deserved because “God willed them to be poor and undeserving of assistance”. A distortion of Religion and of the Message of Jesus which many Evangelical and extremists clerics preach weekly.

    From this brief assessment, one can see from another angle the paucity of spiritual values that course through the souls of a Party devoid of real concern for humanity and who disdain openly the Counsels exhorted by Jesus and their refusal to allow themselves to be infused with His Spirit which was breathed into the world. Alas, that Spirit is largely ignored by our politicians and materialist arm-chair philosophers like Steve Bannon, and others, including Donald Trump.

    This is an objective assessment not meant to be a personal attack against any of the GOP, Trump, or of Steve Bannon.

    1. stcroixcarp July 14, 2017

      VP Mike Pence says his guiding principles are: The Sanctity of Life, The Sanctity of Marriage , and The Sanctity of the Second Amendment. I would prefer the Zombie Apocalypse to a Pence presidency. On second thought, no. We now have the Zombie Apocalypse presidency, and it ain’t pretty.

      1. Eleanore Whitaker July 14, 2017

        Reverend Pence is a moron. If he is religious, I’d love to know what sins in his past suddenly turned him so religious.

        Anyone in the deep south knows men like Pence. They commit all manner of evil and sins and then the minute the first grey hair shows up, they suddenly “get religion” as the southern saying goes.

        But, having to behave and follow the Good Book is just too too too much for guys like Pence. It makes them so miserable to have to do what’s right for a change that they automatically go for the “Misery Loves Company” card and start on the trail of trying to convert the world. BS.

        I don’t need a phony like Pence to show me what’s right and wrong. Those of us who were well born and well bred know that what our parents and teachers taught us was right and wrong has always helped us stay on the right path.

        Pence is a phony like Cornballs, Ryan, McBourbon Boy McConnell and their little liar boys, Cartoon Cotton, Gumballs Gowdy and Nutty Nunes.

        These guys lie and distortion facts and truth in ways that only they believe are reality. Hence, “the alt reality” they love about the Lard Ass in chief.

  2. Aaron_of_Portsmouth July 13, 2017

    “O YE RICH ONES ON EARTH! The poor in your midst are My trust; guard ye My trust, and be not intent only on your own ease.”

    This reaffirmation of an eternal principle, which Abraham, Moses, Jesus, Muhammad, the Buddha, and others enunciated in previous centuries, was issued by Baha’u’llah for this Day and Age. I take this to mean not just those who are destitute, but for those members of the human family who have fallen on hard times. This is a concept lost on Big Pharma, CEO’s, and totally foreign to most in the GOP and in other spheres.


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