23 July 2015

Nice That This Has Made The Times

It appears that the mainstream media is finally noticing that a big problem in US healthcare is prices, and not people taking their children to the doctor for a case of the sniffles:
As complaints grow about exorbitant drug prices, pharmaceutical companies are coming under pressure to disclose the development costs and profits of those medicines and the rationale for charging what they do.

So-called pharmaceutical cost transparency bills have been introduced in at least six state legislatures in the last year, aiming to make drug companies justify their prices, which are often attributed to high research and development costs.

“If a prescription drug demands an outrageous price tag, the public, insurers and federal, state and local governments should have access to the information that supposedly justifies the cost,” says the preamble of a bill introduced in the New York State Senate in May.

In an article being published Thursday, more than 100 prominent oncologists called for support of a grass-roots movement to stem the rapid increases of prices of cancer drugs, including by letting Medicare negotiate prices with pharmaceutical companies and letting patients import less expensive medicines from Canada.

“There is no relief in sight because drug companies keep challenging the market with even higher prices,” the doctors wrote in the journal Mayo Clinic Proceedings. “This raises the question of whether current pricing of cancer drugs is based on reasonable expectation of return on investment or whether it is based on what prices the market can bear.”


“The industry has used R&D costs for the justification, but anyone who is reasonably sophisticated understands those are sunk costs and have little to do with pricing,” Mr. Rother said. “The more important information is any calculation of value. If the drug actually cures people, then what costs in health care are you saving?”

Dr. Jerry Avorn, a professor at Harvard Medical School and critic of some drug company practices, said the industry “has brought this on itself by charging prices that are so astonishing, it makes citizens wonder, ‘Where did this figure come from?’ ”
Yes, it does make citizens wonder.

What could help is ending evergreening, where a company uses a compliant FDA and US Patent Office to extend their legal monopolies, or the insane way in which the orphan drug act is used to grant legal monopolies on drugs that are literally thousands of years old.  (For example Colchicine has been in use for at least 3500 years, and when the company got exclusivity, it raised the price by a factor of 50)

The problem with drug prices, as well other medical prices, is that we have structures in place that allow corporations, which are by their very nature designed to function as sociopaths to extort excessive rents.

And we are exporting this model to the rest of the world through out trade deals like the TPP and TTIP, which will put the health of citizens in the signatory nations at the same sort of risk that exists here.


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