Monday, November 16, 2009

Price-Gouging On Drugs: Another Argument For Single-Payer

By Manifesto Joe

For decades, I've heard that one big reason drug companies charge so much for their products is that they need plenty of money for R&D (research and development). Staying on the pharmaceutical cutting edge, the argument goes, is part of what has given America "the greatest health care system in the world." Yeah, it works just great -- for CEOs, stockholders and wealthy people in general.

The difference between what the drug companies are charging and what Americans pay for most other products is astonishing. Duff Wilson, reporting for The New York Times, wrote that drugmakers raised prices on their wares by an average of 9 percent during the past year, according to industry analysts. That compares with a decline of 1.3 percent in the Consumer Price Index. Read the full story here.

That's an awful lot of R&D. (And, it comes just before major legislation is anticipated. Coincidence?) So, what are we consumers getting for it?

Well, for starters, there are the drugs that don't work. Nearly two years ago, a study cast much doubt on the effectiveness of the alleged state-of-the-art cholesterol drug Zetia. Here's a report. And, more recently, a study found that a form of niacin actually had more effect on slowing the buildup of plaque on artery walls than did Zetia or a similar drug, Vytorin. That story was in a lot of newspapers today.

Another thing we consumers seem to be getting is a lot of adverse drug reactions to all these exotic new panaceas. There's now a plethora of lawsuits related to liver damage from Zetia and Vytorin regimens. And, these newer meds are more expensive than the older statin drugs, which are often prescribed in tandem. The drug companies had studies years ago indicating all of the above problems, but they persisted in misrepresenting the drugs because that meant higher profits for them.

For that matter, the statin drugs are bad enough. Three days for my mother on Zocor, and she collapsed and landed in the hospital. Three days on Lipitor for me, and I couldn't remember people's names.

So, all we seem to be getting for all that R&D we pay for are drugs that sometimes don't work, and even when they do, the ADRs can at worst kill you, and at best turn you into a zombie.

The payroll as a source of price-gouging?
On to another classic argument: "Those people have to be paid!" an obvious Limbaugh dittohead exclaimed to me during an drugstore argument back in 1992. She was referring to the assorted technicians, skilled laborers, etc., who work for the drug companies.

Last time I checked, it wasn't the rank-and-file lab workers who were pulling in the seven-figure salaries and bonuses. In 17 years we've learned a lot more about that, so forget about that canard.

The stockholders have to be paid, too, right? (Hmmm)
The third in this unholy trinity of drugmaker arguments is that the stockholders have to get a good return on their investments, otherwise they might not gamble on pharmaceuticals. It's considered a high-stakes, and high-risk, investment.

But recent studies, apparently some from the insurance companies themselves, have said that the insurers' profit margins aren't relatively high -- only around 6 percent. Why, then, am I paying more and more every year for needed medications? As the insurance companies keep jacking up co-payments and changing their preferred drug lists, why don't THEY make more money?

Based on the recent analysis, I think we know who's really raking it in. The insurers are just passing on the costs. And we, the consumers, seem to be getting about the same thing for good stockholder returns as we've been getting for all that "R&D."

The answer? Let's take the profit motive OUT OF MEDICINE.
Back in 1992, the same dittohead I mentioned earlier argued that a government takeover of medicine would inevitably lead to lower quality in health care.

I'm going to write something that might be considered astonishing. If that is the case about a "government takeover," I honestly do not give a rat's ass.

The reasons are simple. I'm not rich, and I've had lifelong health problems. I'm not satisfied with the standard of health care I've gotten for over 53 years now; I can't see how flat-out socialized medicine could make it that much worse, and at least what treatment there was would be guaranteed, pre-existing conditions or none.

If I were rich, being flown to Houston for the finest open-heart surgery would be no problem. But I'm not rich, so what good does all that state-of-the-art do me? I just want something I can afford, and can DEPEND ON.

In a single-payer system, there are probably many drawbacks. We've certainly heard all about them from the greedy interests who are fighting U.S. health care reform. But I've noticed something -- not one of the advanced nations that has single-payer, not even conservative-leaning Australia, is debating a change to an American-style "land of the fee" system. Nor do I hear any beneficiaries of Medicare -- a single-payer system for those 65 and older -- say they are willing to give up what they have.

Single-payer would get the profit motive out of medicine, on many levels, including drug prices. However long it takes to get real reform done, the debate will always take us back to that simple truth.

Manifesto Joe Is An Underground Writer Living In Texas.


Jack Jodell said...

We are definitely on the same page, Manifesto Joe. You have done a superb job of tearing down a lot of the myths and defenses used by the pharmaceutical and health insurance industries as to why the status quo is supposedly best. You make an excellent case for a single-payer system here that I agree with 100%. These bastards are ripping us off bad, plain and simple. I LOVE your quote "Let's take the profit motive OUT OF MEDICINE." I will amend my current post and place that quote right at its top. Thank you for your always clear and fair-minded, common sense analyses!

Marc McDonald said...

I've read that actually very little of Big Pharma's spending goes into researching new drugs. Big Pharma spends a lot more on marketing, for example (evidenced by all those Viagra TV commercials we're assaulted by 24/7).

Also, a lot of key drug research actually occurs in university labs and is largely paid for by the taxpayer.

Big Pharma routinely scoops up the rights for these taxpayer-funded drugs---and gets the rights to market them, often at bargain basement prices---vastly below what the "free market" would dictate.

It's interesting how America's corporations are all in favor of "free markets"---except when they're not.

Anonymous said...

I love how the drug industry wants to keep charging us more for drugs that never work, have at least a baker's dozen side effects, and might actually kill you... Only in a corporatocracy. Meanwhile the rest of the 1st world keeps living a longer, healthier lifestyle. I'm really hoping I don't live to 40 or 50 with the way things are going in this sinking ship of a plutocracy.