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Why Prescriptions Cost So Much and What You Can Do About It


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A couple of weeks ago the news was filled with stories about Martin Shkreli the CEO of Turing Pharmaceuticals, a relatively small drug manufacturer. Some media branded him with this headline world's biggest a holebecause he raised the price for one pill of Daraprim, a 62 year old drug,
from $13.50 to $750. That’s about 5,000 percent. Now, he says he will lower the price, but there’s no indication of how much or, as of this writing, when (According to Web MD Daraprim is used with other medication (such as a sulfonamide) to treat a serious parasite infection (toxoplasmosis) of the body, brain, or eye or to prevent toxoplasmosis infection in people with HIV infection).

As it turns out, though, the “World’s Biggest A–Hole case is not in the least bit unusual, it happens with pharmaceutical companies with great regularity as a tactic to increase profits on older drugs, drugs that have long since paid for themselves.

The global market for pharmaceuticals topped $1 trillion in sales in 2014. The world’s 10 largest drug companies generated $429.4 billion of that revenue. Five of these companies are headquartered in the U.S. They are: Johnson & Johnson, Pfizer, Abbot Laboratories, Merck and Eli Lilly.

Johnson and Johnson, America’s biggest pharmaceutical manufacturer raised prices on over 130 brand name products this year alone. Merck & Co. raised the price of 38 drugs. The increases in the U.S. have added over a billion dollars of revenue in the last three years. So, while Mr. Shkreli may get the award for being the biggest you know what, he is in good company — only the others were smart enough not to brag about it.

Before I go on it is important to point out that my interest in the topic is both personal and professional. I am a senior citizen, who has had a heart transplant and who also has Chronic Obstructive Pulmonary Disease (COPD). I take a good number of prescription drugs and despite having Medicare Part D insurance I still pay thousands of dollars a year for my prescriptions. Most of the drugs I take have been around for quite a while, but not long enough to allow the sale of generics and because there are few if any pricing restrictions, most of my meds are outrageously high priced.

One of the drugs I take is called Foradil. It was approved by the FDA in February 2001 for the maintenance treatment of asthma and the prevention of bronchospasm in reversible obstructive airways disease. Despite being on the market that long, it still retails for about $250.00 for a 30 day supply. Spiriva is another COPD drug and is often taken with Foradil. It retails for about $350.00. I take about a dozen drugs and these two alone total over $600.00 a month. Insurance cuts that cost in half, but they are still expensive. Because of these prices I know of many seniors and others who have to choose between eating and paying for their prescription meds.

In Europe, Asia, Australia and anywhere else with some form of socialized medicine strict government regulation helps prevent those kinds of actions and subsequently keeps prices down. Things are a whole lot looser in the U.S.

In 2013 each of us spent over $1,000 on prescription drugs. That works out to $429 billion. In case that figure boggles your mind, let me boggle it more by showing you what it looks like in black and white — $429,000,000,000. By anyone’s measure that’s a lot of money. To put it all in perspective Prescription medications make up close to 10 percent of the $2.9 trillion annual total spent on healthcare in the U.S.

Americans spend more on drugs than any other country in the world and – we also pay more for them than any other country.

big pharmaBefore we go into detail on why prescription drugs cost more here than anywhere else, let’s look at the biggest drug and biotech companies in the world. They account for more than a third of the industry’s total market share according to the World Health Organization. We won’t go into detail but here’s the top ten and their 2014 revenue.

  • Gilead Sciences $24.474 billion.
  • Bayer $25.47 billion.
  • AstraZeneca $26.095 billion.
  • GlaxoSmithKline $37.96 billion.
  • Merck’$42.237 billion.
  • Sanofi $43.07 billion.
  • Pfizer 49.605 billion.
  • Roche $49.86 billion.
  • Johnson & Johnson $74.331 billion.

If you were to ask any of those companies why prescription drugs cost so much they would likely tell you that the price reflects the immense costs of research and development. They would explain that it costs millions andcosts millions of dollars to develop a new drug and then millions more to get through animal and human studies and FDA approval, and that’s partially true. Partially. Those costs are very high, but what big pharma won’t tell you is that you are also paying for the costs of marketing the drug to physicians and patients and those costs dwarf the research and development expense. http://tinyurl.com/pr23j3q

The world’s largest pharma company, Johnson & Johnson, spent $17.5 billion on sales and marketing in 2013, compared with $8.2 billion for R&D. Most of that marketing effort is aimed directly at physicians, the people who write the prescriptions, rather than customers like you and me. It should be noted that the U.S. and New Zealand are the only two countries that allow any form of advertising for prescription drugs.

No sane person can object to a company making a profit, it’s part of the American way, but the drug industry’s profits are excessive. At the risk of being accused of repetitiveness I must say again. We pay significantly more than any other country for the exact same drugs. United States spends more than $1,000 per person per year on pharmaceuticals. Per capita drug spending in the U.S. is about 40 percent higher than Canada, 75 percent greater than in Japan and nearly triple the amount spent in Denmark. So why is that?

Well, first the U.S. is a very rich and therefore lucrative market because we use more medicine than any other developed country. We account for 35 percent of the world market for pharmaceuticals. Americans have become quite accustomed to leaving their doctor’s office with a handful of prescriptions.

Due to our ill health and our wealth, companies often choose the U.S. in which to launch new products. And, because the US market is so big and profitable, investments in research and development have long been steered towards meeting clinical needs.

But if we Americans take more prescription drugs, we also pay an arm and a leg more for them. Why? Because other countries have tough regulations about pharmaceutical prices and they set reimbursement limits. MedicareAnother smart thing they do is to agree to pay for a drug only if the price is justified by the medical benefits. In the U.S., Medicare which is the world’s largest buyer of prescription drugs is prohibited from negotiating prices with drug companies. If the company says that a pill is $100, Medicare has no choice, but to pay it if the patient needs it. They have no wiggle room and that costs taxpayers billions of dollars a year in a direct giveaway to the pharmaceutical behemoths and speaks to the power of their lobbyists.

Speaking of lobbyists, here’s the real rub. The pharmacy industry views congress as a place to invest against future price controls and this is what really adds to the price of your prescriptions.

Big Pharma Spends More on Lobbying Than Anyone
lobbyistsSince 1998, the industry spent more than $5 billion on lobbying in Washington, according to the Center for Responsive Politics. To put that in context, that’s more than the $1.53 billion spent by the defense industry and more than the $1.3 billion forked out by Big Oil.

From 1998 to 2013, Big Pharma spent nearly $2.7 billion on lobbying expenses — more than any other industry and 42 percent more than the second highest paying industry: insurance. And since 1990, individuals, lobbyists and political action committees affiliated with the industry have doled out $150 million in campaign contributions.

Now here’s how it works for you and me. In the U.S. insurers only accept the price set by the drug makers. If the drug is exclusive, meaning there is no competing medication from other companies. Insurers then cover the total cost by forcing a higher co-pay on patients. Unlike Medicare, insurers have bargaining power when there are competing drugs and therefore can reduce the co-pays.

generic drugs1Then, there is the Generic drug market, those are drugs in which the patent has run out and other manufacturers are allowed to produce the product. As an example the antidepressant Remeron is also known by its generic name Mirtazapine. Remeron is the brand name given it by the original manufacturer, but Mirtazapine can be made and distributed by any pharma company and sold for a much lower price.

Competition in that area is fierce and generic drug prices are usually low. Today generics account for about 85 percent of drugs dispensed in the U.S.

Despite generics and their low prices, there are still many Americans who daily make the choice between food or drugs, between paying the rent and drugs or giving up some other type of health care in order to afford the drugs that keep them going. Many Americans don’t take their recommended prescriptions because they can’t afford them. One recent survey showed that about one in five U.S. adults did not fill their prescription or skipped doses due to cost as opposed to Australia and some other countries where the ratio is one in ten. http://tinyurl.com/pejvoyn

Some people have turned to foreign sources for their prescriptions and advairthere are many with some of the more popular ones thriving in Canada. Here’s an example of the savings that can be had. If you want a three month supply of the popular asthma inhaler Advair it will likely cost you somewhere in the neighborhood of $600 to purchase it from one of your local pharmacies. If you select one of the Canadian pharmacies you can import the same three month supply of the same medication, Advair, for about $150, with shipping included. That amount may not mean much to the Donald Trump tax bracket, but to average Americans it’s a whole lot of money. Advair is just the tip of the iceberg. ABC news reports the following price comparisons:

  • Mirapex, for Parkinson’s disease: $157 in Canada vs. $263 in the United States.
  • Celexa, for depression: $149 in Canada vs. $253 in the United States.
  • Diovan, for high blood pressure: $149 in Canada vs. $253 in the United States.
  • Oxazepam, for insomnia: $13 in Canada vs. $70 in the United States.
  • Seroquel, for insomnia: $33 in Canada vs. $124 in the United States.

Tufts University in Boston released a study in the year 2000 that placed the cost of approval for a single drug at $802 million, and that was fifteen years ago. To be fair it must be revealed that the dollar amount adds in each successful drug’s prorated share of failures (only one out of fifty drugs eventually reaches the market), but that still does not explain why the retail price is higher here than anywhere else.

The only logical explanation I can come up after some a fair amount of research is that pharmaceutical companies can get away with much higher prices in the U.S. and they can’t elsewhere. Period!

So what are your options, what can average patients who have difficulty Optionaffording some drugs do to stay healthy and be able to eat and pay their rent and other bills at the same time?

Well, there are several steps you can take. Among them are:

  • Contact state and federal legislators and ask them to allow Medicare to negotiate the price of prescription drugs
  • Also ask them to allow importing of essential drugs from foreign companies through approved pharmacies.
  • Ask big pharma companies to see if you qualify for their reduced prices for people who have trouble affording them.
  • Read the Consumers Report story on the issue. It will give you the information you need to identify trustworthy pharmacies. http://tinyurl.com/qbflucm

But, if you are like me you want even more detail. Ok. Here’s the best I can do.

You can shop for the best price and because of the internet that’s become a whole lot easier. You can look up a specific drug and find the best price at a pharmacy near you. Here are two resources. I’m sure you can find a lot more https://www.lowestmed.com/Search#/  orhttp://www.goodrx.com/ All you have to do is type in the drug you need and your zip code and it will find the price of that drug in pharmacies near you.

Transplant recipients might be interested in the cost of anti-rejection drugs. The price is hard to stomach but easy to find. In my zip code 32244 100 Mg Cyclosporine capsules range in price from $526.00 at Wall Mart to $584 at Target. If you are a heart patient and take Carvedilol in my neighborhood it ranges from $4.00 at Wal Mart to $9.54 at Kmart. Lisinopril also has a wide range. At the Publix Supermarket pharmacy near me it is FREE…that’s right FREE.  But at CVS it is $12.00.  Those price variations might make it worth a little longer drive to get a better bargain.

You can also get help with coupons which are an obvious choice to savecouponmoney when grocery or clothes shopping, but they’re often overlooked as a way to cut costs of over-the-counter and prescription drugs. Manufactures frequently offer one time and repeat coupons that can save consumers hundreds of dollars on their medicines. “For our family it has been incredibly effective [in saving money] for a number of regular prescriptions,” says Stephanie Nelson, founder of the coupon website CouponMom.com.

The costs of prescription drugs and over-the-counter medications have been steadily rising and patients facing tight budgets are often forced to make hard decisions when it comes to what they can afford.

The savings vary by manufacturer, but many companies offer discounts at each prescription refill while others offer discount cards that take $20 off co-pays. Others offer one-time coupons to cover the first use of a drug.

  • Consumer Reports Magazine says that there are other ways to save money, too. Whichever drugstore or pharmacy you use, choosing generics over brand-name drugs will save you money. Talk to your doctor, who may be able to prescribe lower-cost alternatives in the same class of drug. In addition, follow these CR tips.
  • Request the lowest price. Our analysis showed that shoppers didn’t always receive the lowest
    available price when they called the pharmacy. Sometimes they were given a discounted price, and other times they were quoted the list price. Be sure to explain—whether you have insurance or not—that you want the lowest possible price. Our shoppers found that student and senior discounts may also apply, but again, you have to ask.
  • Leave the city. Grocery-store pharmacies and independent drugstores sometimes charge higher prices in urban areas than in rural areas. For example, our shoppers found that for a 30-day supply of generic Actos, an independent pharmacy in the city of Raleigh, N.C., charged $203. A store in a rural area of the state sold it for $37.
  • Get a refill for 90 days, not 30 days. Most pharmacies offer discounts on a three-month supply.
  • Consider paying retail. At Costco, the drugstore websites, and a few independents, the retail prices were lower for certain drugs than many insurance copays.
  • Look for additional discounts. All chain and big-box drugstores offer discount generic-drug programs, with some selling hundreds of generic drugs for $4 a month or $10 for a three-month supply. Other programs require you to join to get the discount. (Restrictions apply and certain programs charge annual fees.)
  • Experts say that although the low costs could entice you to get your prescriptions filled at multiple pharmacies, research indicates that it’s best to use a single pharmacy. That keeps all of the drugs you take in one system, which can help you avoid dangerous drug interactions.”

Finally, what do you do if you’ve done the shopping, used coupons, followed all of the Consumer Report Tips and are still unable to pay for your prescriptions? Well, there is some limited assistance. Here are some resources.

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bob half of bob and jay photoBob Aronson of Bob’s Newheart is a 2007 heart transplant recipient, the founder of Facebook’s over 4,200 member Organ Transplant Initiative (OTI) and the author of most of these donation/transplantation blogs. You may comment in the space provided or email your thoughts to me at bob@baronson.org. And – please spread the word about the immediate need for more organ donors. There is nothing you can do that is of greater importance. If you convince one person to be an organ and tissue donor you may save or positively affect over 60 lives. Some of those lives may be people you know and love. You can register to be a donor at http://www.donatelife.net.  It only takes a few minutes. Then, when registered, tell your family about your decision so there is no confusion when the time comes.

 

Stem Cell Therapy. Some Truth — Lots of Snake Oil


We’ve heard that stem cells can cure nearly anything from multiple sclerosis to cancer to heart disease and can even clear the mist from the minds of Alzheimer’s sufferers.   The sad truth is that at the moment stem cells, whether adult or embryonic cure nothing.  Stem cells in the form of bone marrow have long been used in the treatment of blood diseases, and the cells are also used to help burn victims and Multiple Sclerosis patients … but cure?  Not yet.  Sorry.

The promise of cures by stem cell therapy is common and cruel.

Many stem cell therapy practitioners and proponents appear to be legitimate authorities in the field as their names are festooned with impressive titles followed by a serpentine line of vowels and consonants that supposedly designate every possible expert credential.  Unfortunately 99.9% of what you see and hear is snake oil a term that gained prominence in the 19th century when hucksters sold Asian versions of the cure-all to unsuspecting citizens. Then, the claims were less sophisticated but so were the diseases.

The snake oil of the 1800s would cure everything from warts to a lousy love life.  Today the same claims are made but with more scientific terminology.  In the end, though, it’s still snake oil.  A recent segment on CBS “60 Minutes” exposed a scam that preyed on patients stricken with Amyotrophic lateral Sclerosis ALS) also known as “Lou Gehrig’s Disease.”  The program showed just how ruthless and heartless these scam artists can be http://tinyurl.com/ct2gw5t. You can follow that link or click on any of those below for the CBS report and additional information.

Full Segment: 21st Century Snake Oil Part 1
Full Segment: 21st Century Snake Oil Part 2
Web Extra: The Promise of Stem Cell Treatment
Web Extra: A Warning About Stem Cell Fraud

If you have ALS or know someone who does and need a resource for more information this one is highly recommended by many.  http://www.alsuntangled.com/index.html

Confused about what and who to believe on the stem cell therapy issue?  We’ve sorted through a lot of information in writing this blog and are confident that the sources we provide will answer your questions but there are a lot of links so either highlight them or write them down.

One highly respected resource on Stem Cell Scams is the website run by Doug Sipp the man you just saw in the 60 Minutes piece.  Sipp is the researcher from the RIKEN Center for Developmental Biology in Japan and is an outspoken critic of stem cell quackery. http://www.sctmonitor.blogspot.com/

Sipp also says, “Some clinics recruit patients in the United States and then send them overseas for treatment: the Stem Cell Treatment Institute in San Diego, for example, treats its patients in Mexico. Others invoke a ‘compassionate use’ exemption to FDA regulations, which allows them to charge patients for experimental therapies if no other treatment options are available. Some argue that the FDA has no jurisdiction over their activities, claiming that adult stem cells are not drugs — merely the patient’s own tissue — and therefore not subject to FDA oversight.”  Sipp goes on to say, “The growth in the number of clinics and companies marketing stem-cell products without approval is explosive.  The United States is becoming one of the most rapidly expanding markets for unregulated stem-cell applications.”

 “Stem Cells for Dummies”

(A book I bought for this blog and highly recommend)

“Researchers are sketching out all kinds of possible uses for stem cells on the drawing boards, and some of these potential uses are in or preparing to enter clinical trials — experiments to see whether these treatments really work in people. So far, though, the only proven stem cell therapies are for burns and blood disorders; everything else is experimental or theoretical, at least for the moment (no matter what you may read in ads or marketing brochures). http://www.dummies.com/how-to/content/stem-cells-for-dummies-cheat-sheet.html

The fact is that stem cells do hold great promise but there is a grand canyonesque gap between promise and reality.  Much of the promise revolves around the quest to have our damaged organs gain the ability to regenerate themselves and there is genuine evidence that it can be done.  Organ regeneration is all around us.  The Salamander can literally lose its tail in a fight knowing it will grow back again.  A crayfish is constructed in a manner that allows for joints to break so it can easily lose a claw which its body will soon replace. The same regenerative process exists in Newts, Starfish, Earthworms and tadpoles.  While human regeneration is far less developed we, too, have a limited ability to regenerate.

We may not think about it as “Regeneration” but that’s exactly what happens when you cut your fingernails or suffer a skin laceration.  The fingernails grow back and the skin heals.  The human organ most commonly associated with regenerative qualities is the liver but there is only minimal understanding of why it, among all of our organs, has that ability.  Why not the heart, the kidneys, lungs and pancreas, too?

All of this points to one singularly important fact.  We cannot sufficiently address the “how” to cure or treat until we more completely understand the “Why” of the underlying disease.  In a Time Magazine story, the Director of UCLA’s Institute for Stem Cell Biology Owen White said, “Biology is more complicated than splitting the atom because we (stem cell researchers) have to figure out how to create the outcomes we are seeking and how to measure the results simultaneously.”

There is sufficient evidence of the healing power of stem cells to be very optimistic.  The promise ranges from significant to mind boggling.  It has already been demonstrated that some types of stem cells can generate a plentitude of other kinds of cells so that researchers envision a day when patients with heart disease will be able to grow a new valve, maybe even an entire heart.  Should that promise become reality the entire donation/transplantation system would be tossed on its ear.

If we could regenerate our own organs, there would be no need for organ donors or transplant surgery.  Anti-rejection drugs would be totally unnecessary because the body only rejects material foreign to it.  A regenerated heart would be the same genetic and cellular makeup and therefore our immune system would ignore it.  Not only would such a development change the practice of medicine, it should also reduce the cost of maintaining our health.

The successful regeneration of organs as a routine therapy could totally eliminate the financial burden caused by transplant surgery, follow up visits, ant-rejection drugs (which can range up to $1 million in the first year of a transplant) and immunosuppressant side effects. An entire field of highly specialized medical practice would be greatly diminished if not eliminated.  Now one could be a cynic and say that the cost of regeneration would likely just replace what is lost by transplant surgery but I like to think or at least hope that our society won’t let that happen.

But…back to reality, all of the promise mentioned here is just that, promise. Until there hard clinical, peer reviewed evidence most of the claims made by stem cell clinics must be viewed as quackery, regardless of the credentials of the therapists or the testimony of patients.

All too often the public is taken in by one or two or more people who will testify that their lives are better, their illness disappeared or at least the symptoms were relieved.  Individual cases while compelling rarely if ever stand up to rigidly designed long term, peer reviewed scientific studies.

The International Society for Stem Cell Research (ISSCR) http://tinyurl.com/cwffqh8 is a leading authority on this issue and in a piece titled, “The Top Ten Things to Know About Stem Cell Treatments.”  Here’s what they have to say about patient testimonials.

“There are three main reasons why a person might feel better that are unrelated to the actual stem cell treatment: The ‘placebo effect’, accompanying treatments, and natural fluctuations of the disease or condition.

1)    The intense desire or belief that a treatment will work can cause a person to feel like it has and to even experience positive physical changes, such as improved movement or less pain. This phenomenon is called the placebo effect. Even having a positive conversation with a doctor can cause a person to feel improvement.

2)    Likewise, other techniques offered along with stem cell treatment—such as changes to diet, relaxation, physical therapy, medication, etc.—may make a person feel better in a way that is unrelated to the stem cells

3)    Also, the severity of symptoms of many conditions can change over time, resulting in either temporary improvement or decline, which can complicate the interpretation of the effectiveness of treatments. These factors are so widespread that without testing in a controlled clinical study, where a group that receives a treatment is carefully compared against a group that does not receive this treatment, it is very difficult to determine the real effect of any therapy.

“Be wary of clinics that measure or advertise their results primarily through patient testimonials.”

“Hey, I’m dying, what have I got to lose?”

The question is legitimate and so is the response until one scrutinizes the situation.  Most of the stem cell therapies that offer cures or even relief are very expensive and while offered in the U.S. are often delivered in other countries.  You could spend all of your money on a treatment that doesn’t work and be unable to afford further care when you really need it.  Consider, too, that If travel is involved there could be additional problems like finding yourself broke, sick, alone and a long way from family and friends.  And, finally, participating in an unproven treatment may make you ineligible to participate in potential and promising clinical trials.

A Summary From the ISSCR.

“Stem cell science is extraordinarily promising. There have been great advances in treating diseases and conditions of the blood system using blood-forming stem cells, and these show us just how powerful stem cell therapies can be. Scientists all over the world are researching ways to harness stem cells and use them to learn more about, to diagnose, and to treat various diseases and conditions. Every day scientists are working on new ways to shape and control different types of stem cells in ways that are bringing us closer to developing new treatments. Many potential treatments are currently being tested in animal models and some have already been brought to clinical trials. In February 2010 the British company ReNeuron announced it had been approved to conduct a Phase I clinical trial of a neural stem cell treatment for stroke. The first embryonic stem cell-based treatment for acute spinal cord injury has been authorized by the U.S. Food and Drug Administration (FDA) to move into Phase I clinical trials. Although it is sometimes hard to see, stem cell science is moving forward. We are tremendously optimistic that stem cell therapies will someday be available to treat a wide range of human diseases and conditions.”

Obviously this blog was not written by a medical expert, although I quoted many of them.  I wrote it from the perspective of a transplant recipient, a patient, a former journalist and as the founder of Organ Transplant Initiative and Bob’s Newheart to attempt to shed a little light on a complex and controversial subject.  I purposely avoided getting  into any of the science of Stem Cell research or therapy because, frankly, I don’t understand it well enough to write about it accurately.

We promised resources and there are many.  Stem Cells for Dummies offers enough to keep you busy for weeks.  I will just list a few more aside from the usual suspects like the American Heart Association, the Diabetes Association, Kidney Foundation and others. .

If you are looking for news organizations that offer more than lip service to stem cell research and developments look to the following.  I use them regularly and much if not most of the information I post on Organ Transplant Initiative comes from these sites.

Bob Aronson of Bob’s Newheart is a 2007 heart transplant recipient, the founder of Facebook’s nearly 2,500 member Organ Transplant Initiative and the author of most of these donation/transplantation blogs.

You may comment in the space provided or email your thoughts to me at bob@baronson.org. And – please spread the word about the immediate need for more organ donors. There is nothing you can do that is of greater importance. If you convince one person to be an organ and tissue donor you may save or positively affect over 60 lives. Some of those lives may be people you know and love.

Please view our video “Thank You From the Bottom of my Donor’s heart” on http://www.organti.org This video was produced to promote organ donation so it is free and no permission is needed for its use.

If you want to spread the word personally about organ donation, we have another PowerPoint slide show for your use free and without permission. Just go to http://www.organti.org and click on “Life Pass It On” on the left side of the screen and then just follow the directions. This is NOT a stand-alone show; it needs a presenter but is professionally produced and factually sound. If you decide to use the show I will send you a free copy of my e-book, “How to Get a Standing “O” that will help you with presentation skills. Just write to bob@baronson.org and usually you will get a copy the same day.

Also…there is more information on this blog site about other donation/transplantation issues. Additionally we would love to have you join our Facebook group, Organ Transplant Initiative The more members we get the greater our clout with decision makers.

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