When the 2010 Affordable Care Act (ACA) needed support to pass Congress, the Obama administration courted the health insurance industry by adding the individual mandate, which forced folks to get coverage or face statutory penalties. The Supreme Court struck down those mandates two years later. Obama also reached out to pharmaceutical manufacturers, but to get their support, he had to shave the ACA and agree not to use the obviously heavy bargaining power of the expected massive healthcare exchanges to reduce the cost of prescription drugs. The ACA would pay full freight to these corporate greed-meisters. So the United States continues, far and away, to have the most expensive prescription drugs on earth.
With the Trump administration unwilling to live up to its pledge of a better, cheaper and more accessible healthcare system for all Americans, and the GOP unwilling to make what everyone knows are necessary amendments to the ACA – even going to far as to continue to litigate in the hopes of killing the ACA completely – the Act just limps along with lots of people covered. Trumpers are continuing to find ways to cut ACA benefits, eliminate preexisting conditions and raise prices.
Indeed, scandals erupted as hedge funds bought into widely-used drugs and simply jacked up prices to beyond intolerable. In 2015, “Martin Shkreli [pictured above], the ‘bro’-ish CEO of Turing Pharmaceuticals, managed to become ‘the most hated man in America.’ His company acquired the patent to a drug used to treat malaria, cancer, and AIDS, and increased its price from $13.50 to $750 a tablet--5,455 percent. Adding insult to injury, Shkreli gave a long series of TV interviews and fired off tweets in which he seemed to suggest others were too stupid to understand how pharmaceutical research works, and almost reveled in the controversy.” Financial Post (9/22/15).
His malevolence was so nasty that federal prosecutors were hell-bent on finding some reason to charge Shkreli with a crime. “Shkreli was charged in federal court, then convicted on two counts of securities fraud and one count of conspiring to commit securities fraud. He was sentenced to seven years in federal prison and up to $7.4 million in fines.” Wikipedia. While the price dropped to “less” on his targeted drug, it was still outrageous... a factor that seems to permeate the entire pharmacological sector.
The government is not doing a thing to fix this giant problem, so we are watching socially-conscious billionaires and pragmatic hospitals begin to grapple with absurd drug costs, and occasional market-manipulating unavailability, rather directly.
“A group of major American hospitals, battered by price hikes on old drugs and long-lasting shortages of crucial medicines, has launched a not-for-profit generic drug company, Civica Rx, to take some control over the drug supply.
“Backed by seven large health systems and three philanthropic groups, the new venture will be led by an industry insider who refuses to draw a salary.
“The company will focus initially on establishing price transparency and stable supplies for 14 generic drugs used in hospitals, without pressure from shareholders to issue dividends or push up a stock price.
“We’re trying to do the right thing — create a first-of-its-kind societal asset with one mission: to make sure essential generic medicines are affordable and available to everyone,” said Dan Liljenquist, chairman of Civica Rx and chief strategy officer at Intermountain Healthcare in Utah.
“The consortium, which includes health systems such as the Mayo Clinic, Providence St. Joseph Health and HCA Healthcare, collectively represents about 500 hospitals, including Mission Hospital in Mission Viejo, St. Joseph Hospital in Orange and Riverside Community Hospital.
“Liljenquist said the initial governing members have committed $100 million to the effort. The business model will ultimately rely on the long-term contracts that member healthcare organizations agree to — a commitment to buy a fixed portion of their drug volume from Civica...
“Civica did not disclose which drugs it’s focusing on for competitive reasons, but Elie Bahou, chief pharmacy officer of Providence St. Joseph Health, said the criteria include drugs that underwent price increases of 50% or more between 2014 and 2016 and essential medicines that were on national shortage lists.
“A 2016 survey commissioned by hospital lobbying groups found that a third of hospital administrators reported that higher drug prices had a “severe” effect on their ability to manage their budgets.
“Several hospital leaders said shortages and price leaps on old drugs are managed on a near-daily basis. The cost isn’t just the price of a drug but also the clinical and staff time spent tracking the supply, looking for alternatives and changing protocols.”Carolyn Johnson writing for the September 7th Los Angeles Times.
Since our current government, effectively a lapdog to the rich, isn’t doing anything to help most of us, private forces are beginning to move. We are watching some interesting micro-trends such as Civica RX... and big retailers, like Wal*Mart, CVS and Amazon, buying into healthcare providers. A big reach directly into the neighborhood. States are considering expanding the roles of nurse practitioners to make up for the dearth of medical doctors. These experiments may well define the future of American healthcare. Baby steps for a system that needs a ground-up overhaul. But at least in the right direction.
I’m Peter Dekom, and it is strange to live in the only developed country where bankruptcy, because of an inability to pay medical bills (the leading form of bankruptcy), is still possible.
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