Readers Write: Drug prices now a crisis

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The Commonwealth Fund is a private U.S. Foundation whose stated purpose is to “promote a high performing health care system that achieves better access, improved quality and greater efficiency, particularly for society’s most vulnerable and the elderly: Wikipedia

Shawn Bishop, who is vice president of Advancing Medicare and Controlling Healthcare Costs at Commonwealth said at a podcast, “New Directions In Healthcare”,  the U.S. pays the highest prices for drugs in the world, and we put more of our healthcare costs toward prescription drugs than any other country. Seventeen percent of total national healthcare spending goes for prescription drugs.

Analysts  who advise Congress expect the share to rise over the next 10 years because drug costs are expected to outpace those of all other services like doctor visits and hospital care.”

The crisis today is fueled by the high launch prices of new brand organics and year over year price increases of brand name drugs that face no competition in the market for many years due to “abuses of the patent system”. 

Brand name drugs now account for 77 percent of all spending on prescription drugs yet only up to ten percent of all prescriptions written. 

Even people with good health insurance are concerned. The” Association for Accessible meds” says “when the price of prescription drugs fits within a family’s budget, everyone is able to live and work at their healthiest. On the other hand, when people are unable to afford their medication, this negatively affects their health. And their lives, and exacts a heavy toll on society .”

Shawn Bishop, who is vice president of Advancing Medicare and Controlling Healthcare Costs at Commonwealth is quoted “conditions like Multiple sclerosis and rheumatoid arthritis and cancer which are treated with what are called specialty drugs and biologics – they are the highest priced medicine – often $50,000-$100,000 per year, and some drugs in these conditions are priced in the $300,000-$400,000 range for an annual treatment.

But even drugs for common conditions like diabetes have been increasing astronomically and creating affordability issues for patients, because patients who are being treated for diabetes take those medications every day, so year over year increases are having an impact on their pocketbooks as well.

Writing for the “Commonwealth Fund”,  Sandy Hausman says “The U.S. pays the highest prices for drugs in the world, and we put more of our health care costs toward prescription costs than any other country. Seventeen percent of total national healthcare spending goes for prescription drugs

I do not consider price increases by brand name manufacturers an abuse as some do but rather a skillful use of making a profit, legally, and within the boundaries set forth by the laws of our land. Making a profit for your shareholders is not an illegal act but is really what is expected by those who invest in these companies.

David Mitchell of Commonwealth Fund acknowledges “The idea that you made an investment. You deserve a return on that investment. For a small molecule drug, a period of exclusivity is five years. For an orphan drug for small population, the period of exclusivity is seven years.

For organics, it is 12 years. During that period of exclusivity, you are able to exercise monopoly pricing power. The short term outcome of that is that drug companies are able pretty much to charge whatever they want, and we have no way to stop them.”

Instead of complaining of the high prices, perhaps some of those elected officials should learn how to run the biggest company of all, the U.S. Government, as efficiently as the drug companies run their business. Why not change the laws that permit what you consider so wrong.

Former Congressman Henry Waxman who co-sponsored the 1984 Hatch-Waxman Act that reformed the system for drug approval and patenting, said companies defend high prices by claiming they need money for research and development.

PHRMA, the trade association for the pharmaceutical industry, is quite powerful and have increased their lobbying and budget for advertising.

Neither is illegal. Has anyone checked the price increases in cable television, tickets for sporting events, theater tickets on Broadway, apartment rentals in Brooklyn, apartment purchases in Bedford-Stuyvesant. All legal. 

David Mitchell points out that much of the research leading to new medications is done through the National Institutes of Health using tax dollars.

That is true. He also says that drug companies spend more on sales and marketing than on research and development but Waxman says many on Capitol Hill believe high prices for existing drugs help fund new ones. Probably also true.

The consensus in Congress has consistently been that they did not want to enact price controls. The alternative to that was to have competition with a generic drug.

Change the rules that allow for fraud to proliferate as now shown by the Office of Inspector General, Criminal and Civil Enforcement, U.S. Department of Health and Human Services. 

Just his past June the former president of Oregon Foster Care Agency was sentenced to federal prison for theft, money laundering.

Also in June former medical director and two former operators of a Houston Medical Clinic charged in a multi-million dollar health care fraud scheme.

I say, eliminate “pay for delay”, eliminate “evergreening” which is the making of small changes to drugs to delay the manufacture and sale of generics. Eliminate the “phony prices” and “rebates” as currently exists.

Bertram Drachtman

Great Neck

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