Wednesday, September 23, 2015

Greed, the American Health Care System and Campaign Finance Reform

One of the things most people just don't understand about the American Health Care System is the how the game is rigged in favor of pharmaceutical companies, medical equipment makers and hospitals, and who is rigging it this way.

This past week it came to light that a older drug, acquired by a new ownership group, had its price raised by over 4000%, from $13.50 per pill to over $750 per pill.  "Shkreli is the founder and chief executive of the pharmaceutical company Turing. He and his company have, of course, been the subjects of widespread news coverage this week after the New York Times highlighted Shkreli's decision to boost the cost of the more-than-60-year-old drug Daraprim from $13.50 to $750 after the company purchased the drug in August. The drug, developed long ago (i.e. the research costs were borne by a previous owner of the drug), is not exactly a frequently used medication but is considered the most effective drug and therefore the standard of care for people suffering with an infection called toxoplasmosis." http://www.washingtonpost.com/news/the-fix/wp/2015/09/23/martin-shkreli-a-new-icon-of-modern-greed/  This was a completely legal move.

This is not an isolated situation and in fact it is the rule, although in most cases, the price increase is nowhere near 4000%.  Consider, however the case of "Sovaldi," a drug made by Gilead, that cures a form of hepatitis.  "In the United States, Sovaldi costs $1,000 a pill, or $84,000 for a typical 12-week course of treatment. It is likely to be sold for less than $1,800 for a 24-week course of treatment in India, where people are generally infected with a different form of the virus and treatment regimens can take twice as long.  Gilead plans to introduce the drug in India for about $10 a pill — 1 percent of the price in the United States, Gregg H. Alton, Gilead’s executive vice president, said at a news conference."  http://www.nytimes.com/2014/09/16/business/international/maker-of-hepatitis-c-drug-strikes-deal-on-generics-for-poor-countries.html?_r=0  How can this be?  Why would Gilead sell the drug in India at $10 per pill while charging $1000 per pill in the U.S.?  If it's profitable in India at $10 per pill, why can't that be the price here as well?

The answer is that the game is rigged and its rigged by Congress and the Big Pharma lobby.  If you did not know, the Health Care Lobby is the largest lobby in the country, larger than military-industrial complex or any other lobby group.  They donate incredible amounts to campaigns and their support is crucial to may legislators financially.

Congress, the beneficiary of the huge campaign donations, has actually passed laws that prevent Medicare from negotiating the pricing of drugs with drug makers!  Medicare cannot use its enormous leverage to get the best prices out of the drug makers in the same way that other countries do within their single payer nationalized health care systems.  No, in the U.S., Medicare can only pay a premium over an average cost for drugs and that average is pretty high when the rest of the market consists of drug makers with monopolies on their drugs and a very fragmented market of numerous health insurance companies.  All the leverage is on the side of the drug makers.

Obviously the solution is to take the handcuffs off of Medicare and in fact, go to a 100% single payer system, a Medicare for All system, in the U.S.  To do this, we have to have a revolutionary campaign finance reform movement so that Congress is not in the pocket of their big donors.  Good luck with that!  Still, the first step to a better health care system, and solving numerous other problems, is campaign finance reform and  as difficult and hopeless as it seems to be, reform must begin.

Presidential candidate Hillary Clinton expressed outrage over the costs of the above drugs mentioned this week made some recommendations to prevent this from happening were she elected President.  "Under Mrs Clinton’s proposals, partially unveiled on September 22nd, Medicare, the government health scheme for elderly Americans, would be allowed to negotiate prices directly with drug companies—something the firms would fight tooth-and-nail. She also wants to stop drug firms treating the cost of direct-to-consumer advertising as a business expense allowable against tax; such ads encourage patients to demand specific drugs when there may be cheaper alternatives that are just as effective. And Mrs Clinton would require drug companies that benefit from government spending on research and development to invest a “sufficient amount” in R&D of their own. If she were elected president however, she might struggle to get much of this through Congress, and even then it might have only a marginal effect on the unrelenting rise in the cost of medicines." http://www.economist.com/news/business-and-finance/21665436-dramatic-rises-price-some-medicines-prompt-calls-action-hillary-clinton-promises 

This is a good proposal but it will not pass through Congress UNLESS Congress is no longer owned by the Health Care Lobby and greed is no longer rewarded in the American Health Care System.  Job Number One is Campaign Finance Reform.

Note: After Secretary Clinton's comments, Turing, the company that owns Daraprim, announced it would roll back the price to some as of yet unspecified lower price and the stock prices of many large pharmaceutical tanked on Wall Street.

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