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.
Showing posts with label Big Pharma. Show all posts
Showing posts with label Big Pharma. Show all posts
Wednesday, September 23, 2015
Thursday, May 9, 2013
Obamacare vs. Anarchy-care
Exactly what did Obamacare try to accomplish? It really only tried to widen access to affordable health care insurance. It was a reform that was long past overdue despite the fact that it falls short of accomplishing what is actually needed, which is the control of health care costs.
I should know. After my wife's permanent layoff from her job at a large company, I needed to purchase health care insurance as a very small business owner for my family. Since my company had way fewer than 50 employees, the choices were not abundant despite living on Long Island, NY. I had 3 insurance companies in total to choose from. All the policies were odious.
The first year, 2002 or 2003, the cost of insurance was a shock to the system after being covered for relatively little out of pocket cost under my spouse's coverage from her job. But it got worse - much worse. By 2009, health care was costing before taxes $25,000 per year counting premiums, deductibles and co-pays. Unbelievable!
Fortunately, in 2010, my wife found a job with good benefits but the damage was done - we had spent about $175,000 on health care over about 7 or 8 years even though we were relatively healthy. Boy do we miss that $175,000!
The loss of this money to health care costs is particularly bothersome to me because I am all too well aware that our "system" of health care is so idiotic; it's the most expensive in the world and it's not close to being the best. In Canada, our neighbor to the north, the costs are a fraction of ours, yet Canadians live longer than we do. There is no way to justify what we do compared to what the Canadians do; they simply have it better. Anecdotal stories aside, the fact remains that Canadians are not clamoring to change their "Medicare for All" system. In fact, they probably would rebel if their system was changed into OUR system. Who wouldn't rebel? Our system is nothing more than anarchy.
Is that too strong a word?
Health and Human Services Secretary Kathleen Sebelius has released an enormous data file containing the secret "Chargemaster" price lists of hospitals from around the country revealing an almost completely random, arbitrary and capricious pricing of various hospital services that vary wildly from hospital to hospital. Truly the prices are inexplicable!
Steven Brill, who wrote the masterful article "Bitter Pill" highlighted in an earlier blog post, wrote on 5/8/2013, "For example, the first line in the more than 163,072 lines of data in the CMS file released May 8 covers the treatment of “extra cranial procedures” (“without complications”) at the Southeast Alabama Medical Center in Dothan, Ala. When Medicare reviewed the list prices on bills it received for 91 patients getting that treatment at the Dothan hospital in 2011, the average Chargemaster bill claimed by the hospital was $32,963. Medicare paid only an average of $5,777...
Helpfully, Sebelius points out in her announcement that “average inpatient charges for services a hospital may provide in connection with a joint replacement range from a low of $5,300 at a hospital in Ada, Oklahoma, to a high of $223,000 at a hospital in Monterey Park, California. Even within the same geographic area,” she notes, “hospital charges for similar services can vary significantly. For example, average inpatient hospital charges for services that may be provided to treat heart failure range from a low of $21,000 to a high of $46,000 in Denver, Colorado, and from a low of $9,000 to a high of $51,000 in Jackson, Mississippi.”
" Go to
http://swampland.time.com/2013/05/08/an-end-to-medical-billing-secrecy/ .
Please note that the hospital, which makes a profit at the payment level that Medicare pays, would try to charge the uncovered about 600% more than it charges Medicare. Those persons would most likely be lower income persons. Furthermore, the Chargemaster price lists are the basis for their negotiations with health care insurers, none of whom have anywhere near the bargaining power of Medicare which has a monopoly on older health care consumers. It is Medicare's bargaining power that is the key to lowering health care costs. The only times Medicare is ineffective in bargaining is when its hands are tied legislatively; Congress prevents it from bargaining fully with medical equipment companies and drug companies. Why? Because these companies are the biggest lobbyists in Washington DC and spend huge amounts supporting their political candidates. What a shock!
Is this crazy or not? Why would we all not want Medicare for all? If you think your taxes would go up, think again - the money saved in insurance premiums, deductibles and co-pays would be far greater than any tax increase since the total cost of health care expenses would decrease - a lot! That decrease ends up in our pockets and it comes out of the pockets of hospitals, medical equipment companies and Big Pharma. Do not cry for them, they will not starve. But if we do not adopt some form of Medicare for All, perhaps we, the American taxpayer and consumer, will starve.
I should know. After my wife's permanent layoff from her job at a large company, I needed to purchase health care insurance as a very small business owner for my family. Since my company had way fewer than 50 employees, the choices were not abundant despite living on Long Island, NY. I had 3 insurance companies in total to choose from. All the policies were odious.
The first year, 2002 or 2003, the cost of insurance was a shock to the system after being covered for relatively little out of pocket cost under my spouse's coverage from her job. But it got worse - much worse. By 2009, health care was costing before taxes $25,000 per year counting premiums, deductibles and co-pays. Unbelievable!
Fortunately, in 2010, my wife found a job with good benefits but the damage was done - we had spent about $175,000 on health care over about 7 or 8 years even though we were relatively healthy. Boy do we miss that $175,000!
The loss of this money to health care costs is particularly bothersome to me because I am all too well aware that our "system" of health care is so idiotic; it's the most expensive in the world and it's not close to being the best. In Canada, our neighbor to the north, the costs are a fraction of ours, yet Canadians live longer than we do. There is no way to justify what we do compared to what the Canadians do; they simply have it better. Anecdotal stories aside, the fact remains that Canadians are not clamoring to change their "Medicare for All" system. In fact, they probably would rebel if their system was changed into OUR system. Who wouldn't rebel? Our system is nothing more than anarchy.
Is that too strong a word?
Health and Human Services Secretary Kathleen Sebelius has released an enormous data file containing the secret "Chargemaster" price lists of hospitals from around the country revealing an almost completely random, arbitrary and capricious pricing of various hospital services that vary wildly from hospital to hospital. Truly the prices are inexplicable!
Steven Brill, who wrote the masterful article "Bitter Pill" highlighted in an earlier blog post, wrote on 5/8/2013, "For example, the first line in the more than 163,072 lines of data in the CMS file released May 8 covers the treatment of “extra cranial procedures” (“without complications”) at the Southeast Alabama Medical Center in Dothan, Ala. When Medicare reviewed the list prices on bills it received for 91 patients getting that treatment at the Dothan hospital in 2011, the average Chargemaster bill claimed by the hospital was $32,963. Medicare paid only an average of $5,777...
Helpfully, Sebelius points out in her announcement that “average inpatient charges for services a hospital may provide in connection with a joint replacement range from a low of $5,300 at a hospital in Ada, Oklahoma, to a high of $223,000 at a hospital in Monterey Park, California. Even within the same geographic area,” she notes, “hospital charges for similar services can vary significantly. For example, average inpatient hospital charges for services that may be provided to treat heart failure range from a low of $21,000 to a high of $46,000 in Denver, Colorado, and from a low of $9,000 to a high of $51,000 in Jackson, Mississippi.”
" Go to
http://swampland.time.com/2013/05/08/an-end-to-medical-billing-secrecy/ .
Please note that the hospital, which makes a profit at the payment level that Medicare pays, would try to charge the uncovered about 600% more than it charges Medicare. Those persons would most likely be lower income persons. Furthermore, the Chargemaster price lists are the basis for their negotiations with health care insurers, none of whom have anywhere near the bargaining power of Medicare which has a monopoly on older health care consumers. It is Medicare's bargaining power that is the key to lowering health care costs. The only times Medicare is ineffective in bargaining is when its hands are tied legislatively; Congress prevents it from bargaining fully with medical equipment companies and drug companies. Why? Because these companies are the biggest lobbyists in Washington DC and spend huge amounts supporting their political candidates. What a shock!
Is this crazy or not? Why would we all not want Medicare for all? If you think your taxes would go up, think again - the money saved in insurance premiums, deductibles and co-pays would be far greater than any tax increase since the total cost of health care expenses would decrease - a lot! That decrease ends up in our pockets and it comes out of the pockets of hospitals, medical equipment companies and Big Pharma. Do not cry for them, they will not starve. But if we do not adopt some form of Medicare for All, perhaps we, the American taxpayer and consumer, will starve.
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