Bad Medicine for a Sick Country

The current healthcare plans being considered by the House, and as referred by the Senate, have eschewed the right of members of the American public to buy their prescription drugs from legitimate European or Canadian sellers. The big drug companies cried “importing drugs eliminate the ability of the government to protect its citizens from bad or impure drugs.” Obviously, Canadians and Europeans must have healthcare systems that delight in exposing their people to sub-par prescription drugs if not downright poisonous substitutes. The Canadian and European governments were delighted at the failure of the U.S. to recognized their pharmacies as being “good enough”… since in no way do they want Americans creating greater demand, which might increase their local prices.

The American pharma industry (a $315 billion/year business sector) has pledged to the President to implement serious cutbacks in the cost of prescription drugs in order to help institute overall healthcare reform… $80 billion worth over a decade. However, if you raise prices enough and then cut them, you look like you are making a big concession… but you’re not! Want some serious evidence of this nasty tendency? How about this from DailyFinance.com (January 14^th): “Given that pharmaceutical companies have been accused of hiking drug prices ahead of the passage of health care reform, perhaps nobody will be surprised to learn that the industry has a history of passing big price bumps on to their customers. Even so, the magnitude will no doubt raise an eyebrow or two: The Government Accountability Office has found that between 2000 and 2008, the prices for 321 different brand-name drugs soared from 100% to more than 2,000%.

“The GAO found that from 2000 to 2008, 416 drug products (which in some cases include multiple dosages of a single drug) had such extraordinary price increases. Most often, these extraordinary price increases ranged from 100% to 499%, but in a few cases, prices were raised by 1,000% or more and in nine cases, the prices soared by over 2,000%. The number of extraordinary price increases each year jumped from 28 in 2000 to 71 in 2008.”

In addition, the GAO cited a number of basic reasons for the above increases (from DailyFinance.com):

1. Lack of competition. In many cases, “there was a lack of therapeutically equivalent drugs on the market -- both generics and other brand-name drugs used to treat the same condition -- due to patent protections for new drugs. Similarly, by extending patents for existing drugs that have been modified, and receiving market exclusivity rights, drug manufacturers have been able to limit competition.”
2. Particularly for very narrowly focused treatments, “the size of the market for a given drug can reduce competition.”
3. “[T]he transfer of the rights to a drug and corporate consolidations among drug companies may result in fewer drug options and contribute to extraordinary price increases.”
4. “[M]ore than half of all extraordinary price increases were for repackaged brand-name drug products, meaning third parties firms, which purchased drugs from manufacturers or wholesalers and resold them in smaller packages to health care providers, were the cause of the price hikes.” Sneaky, huh?
5. “[U]nusual events -- such as disruptions in production due to shortages of raw materials -- and other factors may also contribute to some extraordinary price increases.”

Sure the U.S. dollar is falling, and that is also going to continue to drive up costs, notwithstanding that our general cost of living has dropped generally in this country. But in the end, we probably need some serious explanations from this out-of-control industry which charges Americans the highest prices on earth for prescription drugs. They seem to have purchased the right politicians to guarantee that we Americans are still number one in at least one major category!

I’m Peter Dekom, and I approve this message.