When the rest of the developed world
was deploying virtually all of their financial resources toward rebuilding WWII
-decimated, bombed out cities and infrastructure, the United States was
beginning to figure out what to do with millions of returning soldiers, workers
who staved off their pay demands in support of the war effort and massive
unemployment. We did not have cities that needed rebuilding or infrastructure
that needed to be fixed.
Strikes were so rampant that Congress
passed the Taft-Hartley Act in 1947 to create economic stability. That combined
with the GI Bill, affording returning soldiers with access to government
subsidized college or trade school education and home ownership, began to
accelerate the United States into a high-growth internally stimulated consumer
economy. New homes, cars and modern appliances proliferated. Soon, 60% of
Americans became homeowners.
Wages and salaries soared. Americans
were earning multiples of their counterparts in other developed nations, who
were still struggling to fix war damage. There wasn’t a lot of universal
healthcare anywhere (it was still a nascent movement), and lucrative union
health plans pushed us ahead of most of the rest of the world. Government
workers were accorded comparable benefits, and major employers (where unions
were not already mandating their plans) filled out most of the rest. Less
affluent Americans were left with little or nothing in the way of healthcare.
Those who were working were making a bundle when compared with their foreign
counterparts.
Salaries for professionals also took
off, and that most definitely included doctors and medical specialists. With
generous medical insurance, to cost of virtually every category of medical
expense took off like a rocket. Somewhere in the 1960s, the rest of the world
seemed to have recovered from the post-WWII rebuild, and government-provided
universal healthcare began to accelerate… except in the United States. We were
already far and away the country with the most expensive healthcare on earth,
double the average cost of the next most expensive nation, and we were spending
20% of our GDP on healthcare (a bit over 17% today), far more than any other
country.
That lingering mega-cost of
healthcare has never gone away. It has plagued the United States as the rest of
the developed world began to equal, and in some cases exceed, our standard of
living. And given the political reality that we have become a nation governed
by well-heeled special interests with major lobbying power and little in the
way of capping their political advertising budgets, incumbent medical
constituencies were hell-bent on keeping those medical prices exceptionally
high. Congress is addicted to those campaign contributions. When the Affordable
Care Act (Obamacare) was passed in 2010, pharmaceutical lobbies were placated
by a statutory guarantee that the resulting healthcare exchanges were unable to
challenge whatever prices these corporate giants wanted to charge.
Today, Americans pay a serious
multiple for prescription drugs over what is charged in any other developed
nation (and of course in virtually all developing nations except where price
gouging is not curtailed). Pharmas tell us that they need this excess to pay
for research and development for new medications, particularly since recent
government research cutbacks have seriously impaired government support for
that R&D. You only have to look at share prices and the proliferation of
advertising for prescription drugs to know where that extra money is really
being spent!
Everybody is complaining that without
getting the cost of prescription drugs under control, medical care in this country
will zoom into a “generally unaffordable” range. Even Medicare, which is
substandard when compared with healthcare systems overseas, has a “donut hole,”
where prescriptions just fall into an uncovered crack in the system.
Supplemental insurance is required, for those elders able to write the checks,
to achieve more affordable prescriptions… or elders simply go without. Between
exclusions, caps, deductibles and premium costs, even people with healthcare
insurance are often forced to file for bankruptcy for uncovered medical costs
they are unable to pay. That just does not happen in any other developed
nation.
Donald Trump has openly chastised
pharmas for what appears to be a pattern in this country of price-gouging
pricing structure. He began by ordering pharmas to publish pricing in their
marketing materials, immediately challenged in the courts. In mid-September, he
expanded the earlier executive order by mandating that Americans not be
required to pay more than what the pharmas charge for the same prescription
product overseas. Pharmas scoffed at the effort… “President Donald Trump's
latest executive order aimed at lowering U.S. drug prices by linking them to
those of other nations is ‘light on details’ but ‘surely exceeds’ his
authority, [pharmaceutical giant] Roche's top drug executive said on Monday
[9/14].
“Trump's plan, which he called a
‘Most Favored Nation’ (MFN) order on Sunday [9/13], would pay a price for a
prescription drug that matches the lowest price paid among wealthy foreign
governments. Medicare, the U.S. government healthcare program for seniors, is
now prohibited from negotiating prices it pays to drugmakers.
“‘This is really not the right way to
go,’ Bill Anderson, the Swiss company's pharmaceuticals division CEO, said on a
call with investors. ‘The fundamental problem with MFN is it really brings the
policies from other countries that don't support innovation, it just brings
those into the U.S....The executive order, it's basically one page, it's light
on details, but it surely exceeds the authority of an executive order.’”
Reuters, September 14th. Trump was obviously aware that the pharmas
were unlikely to comply with his order, but at least it looked as if he were
trying.
If you really want to understand how
little this executive order means to these pharmaceutical behemoths, let’s look
at one of the companies that the federal government blessed with ten figure
COVID-development grants: UK pharma AstraZeneca. That company just announced
steep increases in just about all of their prescription drugs, including the
prospective cost of a coronavirus vaccine if successfully developed.
Noam Levey, writing for the September
15th Los Angeles Times, fills in the details: “One of the world’s
largest drug companies has been aggressively raising prices even as it received
hundreds of millions of dollars of U.S. government aid to develop a COVID-19
vaccine… AstraZeneca, which the Trump administration has lauded for its vaccine
work, boosted prices despite renewed promises by President Trump this summer to
keep drug costs in check.
“The multinational pharmaceutical
firm raised prices in a way that stood out even among other big drug companies.
It announced not just one set of price hikes in 2020 but two, often on the same
drugs, according to an analysis of drug pricing data by The Times and
46brooklyn Research, a nonprofit that studies the pharmaceutical industry.
“AstraZeneca hiked prices on some of
its biggest-selling medicines by as much as 6% this year at a time when the
overall inflation rate is hovering around 1%, the analysis shows. The
administration has said nothing about the price increases… AstraZeneca’s second
round of increases came after it secured a $1.2-billion commitment in May from
the U.S. for vaccine development and as the company was reporting more than
$3.6 billion in operating profit in the first half of 2020… ‘They clearly made
a decision to do their pricing differently, both from their recent past and
from their peers, at the same time they were seeking billions of dollars,’
46brooklyn founder Eric Pachman said…
“The company’s price hikes
underscored the persistent inability of U.S. policymakers, including Trump, to
rein in drug prices, even during a public health crisis when pharmaceutical
companies are getting substantial public assistance… Although the federal
government has committed more than $10 billion this year to drug companies to
develop a COVID-19 vaccine, the administration hasn’t required any commitments
from drugmakers on the price they would charge.
“Thus far, companies receiving
government aid have only made vague promises to make any vaccines they develop
affordable… AstraZeneca has said it wouldn’t profit from vaccine sales during
the pandemic, but it remains unclear how this would be verified and whether the
company might raise prices after the worst of the crisis passes.
“Drugmakers for years have pledged to
make their products more affordable, assuring U.S. lawmakers, patient groups
and others that they are sensitive to the struggles many Americans have paying
for their medications… Yet patients in the U.S. are finding it increasingly
difficult to afford prescriptions, with 1 in 5 households reporting last year
that they were unable to pay for a medicine that a doctor had prescribed in the
previous year because of costs.
“Nevertheless, to start this year,
most major pharmaceutical companies continued to hike prices at rates far
exceeding inflation, The Times and 46brooklyn found… Several of the world’s
biggest drugmakers announced hikes of 5%, 6%, even 9% on a host of popular
medicines, according to the analysis, which looked at list prices by the 15
largest drug companies using the Elsevier Gold Standard Drug Database, which
includes pricing and clinical information on tens of thousands of medications.”
Trump’s promised new healthcare plan, intended to replace the Affordable Care
Act his administration is attempting to end via a Supreme Court ruling, has
never surfaced, and none of his prescription drug containment orders has been
implemented. Sound and fury signifying nothing.
I’m
Peter Dekom, and it is time to pass truly complete and meaningful US universal
healthcare, battle the pharmas in court as they challenge the effort, and joint
the rest of the developed world in providing healthcare as a modern right for
all residents.
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