By Bob Aronson
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Everyone, unless you have the riches of Donald Trump, everyone complains about the cost of prescription drugs and the complaints are justified. No other country in the world pays as much for prescription drugs as Americans do. Big Pharma, that’s Washington DC talk for the huge pharmaceutical companies, is making sky high profits and they aren’t going to end anytime soon. In the latest year in which I was able to find numbers 2012 the top 11 global drug companies made nearly $85 billion in net profits. That’s net, folks, not gross. The gross number is, well, gross.
Big pharma is ripping off Americans and no one seems to care other than ripped off Americans. The Republican congress sure doesn’t care, they all have their hands out for the lobbying money big pharma so liberally spreads about. And – the Democratic White House of the last 8 years hasn’t said much either. Now we have a new President about to take office and several months ago in a primary debate he made a big deal out of the high cost of drugs, but we haven’t heard much from him since. Let’s hope he has the guts to take on big pharma. The pressure on Trump to do nothing will be tremendous. He’ll get it not only from the drug companies, but from all the politicians whose pockets have been lined with campaign donations by big pharma lobbyists. Trump can bellow all he wants, if congress won’t go along he’ll be shooting blanks at a stationary target.
During the Democratic Primary campaign Bernie Sanders made a big deal out of reversing the Citizens United ruling that allows corporations, unions and the like to make almost unlimited contributions to political campaigns. So if you are asking where the politicians are who are supposed to be looking out for us. I’ll tell you where. They are out being fitted for new big pharma cheer leading outfits. The more money big pharma makes, the more money they get in the campaign coffers.
The number of conflicts of interest between the regulators and the regulated boggles the mind. How do these people who are so obviously biased and in the industry’s pocket, get into these positions of power? I shouldn’t even ask the question, because the answer is so obvious. For example; PhRMA, (the Pharmaceutical Research and Manufacturers of America) which spent $18.4 million lobbying lawmakers last year and BIO (Bio-technology Innovation Organization) which spent $8.4 million, are among the most visible groups on Capitol Hill. Get this. Former Louisiana Congressman Billy Tauzin chaired the committee which oversees the drug industry. You know how he got the chairmanship? Well, he was a Democrat, but when the Republicans took over the majority he switched parties. Now that’s a lust for power. Then he abruptly resigned his congressional seat and shortly thereafter emerged as the new leader of PhRMA where was a paid a cool $2 million a year. That deal leaves a stench on the paper this is printed on.
The Tauzin defection and sell out of his integrity was among the beginning rumbles of even greater conflicts of interest. For example, the Obama FDA commissioner, Robert Califf, was confirmed despite the fact that there were 23 proven financial links to drug makers. And – it gets worse. Did you know that 30 percent of sitting U.S. Senators and 20 percent of U.S. congressmen own pharma stock? I won’t go into detail here, but if you want to learn more about this disgrace go to https://www.statnews.com/2015/12/01/congress-pharmaceutical-investment/
When did you first realize how bad this gouging was? Was it last year when that cocky little jerk Martin Shkreli of Turing Pharmaceuticals, testified about the Daraprim price hike from $13.50 to $750. As a result the anti-parasitic drug became unaffordable for thousands of Americans. In the meantime Shkreli was on Twitter calling lawmakers “imbeciles” for even asking any questions about his unethical and immoral price hikes.
Others of you with Hep C may have experienced the greed of Gilead Sciences drug Sovedeldi which sold for $84,000 for a 12 week course of treatment in 2014. Headlines were screaming “Rip-off,” patients were dying because they couldn’t afford the drug, but Gilead was unaffected. One of their execs even sent out an internal memo saying, “Let’s hold our position whatever competitors do or whatever the headlines.” In an incredible understatement the GOP led Senate Finance Committee said the price did not reflect research and development but a “revenue” push. Revenue push nuts! That’s unabashed price gouging especially in light of the fact that the same drug cost $900 a year in Egypt. Forbes, the conservative business magazine, pointed out that US taxpayers are picking up the tab since most US hepatitis C patients are uninsured, underinsured or imprisoned. Those in prison don’t qualify for any help at all. They are destined to suffer and because they are suffering run the risk of contributing to the Hep C epidemic.
But that’s only, and I hate clichés, but here goes anyway – the tip of the iceberg that sank the Titanic. Let’s hope the big pharma ship hits the same obstacle. There are many, many more rip offs that most of us don’t’ know about because we only have a familiarity with the drugs we personally take and for some reason the mass media have mostly ignored the get rich schemes of big pharma.
They will tell you that the high prices reflect the cost of research and development. I know from first –hand experience that’s not true. For some 25 years I was a communication’s consultant that helped large and small pharma companies bring the products to market. Developing new drugs and or devices is expensive. Just getting FDA approval costs a lot of money in clinical trials and in paying physician experts for their testimony, but big pharma in particular doesn’t bat an eye at those costs because they spend more on promoting drugs and on advertising than they do on research and development and they pass those costs on to you.
You probably didn’t know this but we, the United States and New Zealand are the only two countries in the world that allow prescription drug advertising. The companies are trying to put pressure on doctors to prescribe by going directly to consumers and asking them to ask their docs for a prescription of the latest snake oil and some of it is snake oil. Some drug companies will make minute changes in the chemical structure of a drug, rename it and call it a new drug. Prilosec, for example became Nexium. It was essentially the same drug but changing the formula a smidgeon and giving it a new name netted billions for the parent company. http://articles.mercola.com/sites/articles/archive/2002/12/18/nexium.aspx
Here’s a partial list of some very expensive drugs. So expensive some patients choose to die because they can’t afford them. It used to be said that some seniors had to choose between eating and taking their drugs. That’s no longer true, even giving up eating won’t save enough money to buy these drugs.
- Kalydeco treats a rare form of cystic fibrosis in patient’s ages 6 years and older priced at a $300,000 a year.
- Acthar, a drug that treats treat seizures in infants under 2-years-old priced at a $300,000 a year.
- Kadcyla, a breast cancer drug that costs $94,000 for a year.
- Zydelig, a leukemia drug, made by Gilead the (Hep C drug maker) that costs $57,755 a year.
- Xyrem, a drug that treats narcolepsy for $35,000 per year (Honesty suggests that I (Bob Aronson) disclose having helped the developers of Xyrem get FDA approval)
- Abilify, a psychiatric drug usually added on to another expensive psychiatric drug, that costs $17,316 year.
(Some of the above was developed by Martha Rosenberg an investigative reporter whose work has appeared in Consumers Digest, the Boston Globe, San Francisco Chronicle, Chicago Tribune, New Orleans Times-Picayune, Los Angeles Times, Providence Journal and Newsday. Her Random House food and drug expose, Born with a Junk Food Deficiency: How Flaks, Quacks and Hacks Pimp The Public Health, was cited in the American Society of Journalists and Authors 2013 Outstanding Books awards. On Twitter you can find her at @MarthRosenberg.
It’s bad enough that Big and even small Pharma gouges us with high prices, their greed knows no bounds. Now I understand, many pharma companies are attempting to re-incorporate outside of the US in order to dodge U.S. taxes. Does that really surprise anyone?
So far we’ve dealt with the high prices of prescription drugs, the multi-million dollar lobbying effort on the part of big pharma and lawmakers and administrators who have clear conflicts of interest. But what about physicians. Well, they’re not clean either.
According to a federal on-line data base, pharmaceutical companies and device makers paid doctors some $380 million in speaking and consulting fees over a five-month period in 2013. http://www.nytimes.com/2014/10/01/business/Database-of-payments-to-doctors-by-drug-and-medical-device-makers.html?_r=0 some doctors were paid over half a million dollars each, and others made a lot more by sharing in the royalties from products they helped develop.
Big pharma says paying physicians has little or no effect on what they prescribe. Ok, if that’s true why the drug do companies pay doctors all of that money if they aren’t getting a huge return on investment. To be fair, there are efforts to reduce the influence Pharma representatives have on physicians. Many hospitals and clinics no longer take samples as a display of independence, but that’s a double edged sword. A good any patients counted on getting those free samples to cut the cost of the drugs they take. Doctors claim these pharma payments have no effect on what they prescribe. But why would drug companies pay out all those millions of dollars if the practice didn’t provide them a healthy return on their investment?
Americans spend more money per person on prescription drugs than any other nation on earth and we aren’t anywhere near being the healthiest. We spend nearly $3 Trillion a year on health care and a full ten percent of that is spent on prescription drugs. While Government pays some of this tab through Medicare, Medicaid, and subsidies under the Affordable Care Act we pick up the rest through insurance premiums and taxes. And – the premiums, co-payments and deductibles are getting higher all the time. .
Big pharma, not satisfied with their outrageous profits are so driven by greed that they will go to any extreme to continue the revenue flow. Not long ago just before its patent expired on Namenda, one of the only Alzheimer’s drugs, Forest Laboratories said it would quite selling it in favor of a new formula that offered an extended release. But there was really nothing new about it, just a minor change in the chemical structure and that kept it from going generic at a lower price.
And, of course, you are all likely familiar with the fact that U.S. law prohibits the U.S. government from using its considerable bargaining power under Medicare and Medicaid to negotiate lower drug prices. No one wants to admit to this but that came about because it was big pharma’s payoff for not opposing the 2003 Medicare Part D Bill of the George W. Bush Administration.
Lest I haven’t made my case about how big Pharma is ripping us off, did you know that healthcare and big pharma pay their CEOs more than any other industry? Want proof? Median pay for healthcare and pharmaceutical executives amounted to $14.5 million in 2015, higher than for leaders in any other sector, according to Equilar, a California firm that researches and analyzes executive compensation. Median compensation for all CEOs in the study, which looked at pay packages of 341 executives at S&P 500 companies across multiple sectors in 2015, was $10.8 million.
The increase in healthcare executive pay from 2014 to 2015 was also greater than in other sectors. Healthcare CEO Pay rose 7 percent last year over the amount in 2014, while the comparable median pay increase for all industries was 4.5 percent.
Here are just a few examples of CEO pay in healthcare and pharma. Leonard S. Schleifer CEO of Rgeneron Pharmaceuticals total compensation in 2015 was $47,462,526, Jeffrey M. Leeiden of Vertex Pharmaceuticals got $28,099,826 and Larry J. Merlo of CVS health took home $22,855,374
Who is worth that? Compare that to the $400,000 annual salary of the President of the United States who also gets a $50,000 annual expense account, a $100,000 nontaxable travel account, and $19,000 for entertainment. Add it all up and it doesn’t begin to compare with the health care and pharma CEOs.
I don’t know about any of you readers, but if I was the head of a pharma company making that much money and read about all the people who were dying or sick because they couldn’t afford meds I would likely shoot myself.
Because The U.S. just held elections it is too early to provide information on who chairs the committees in the house and senate that might influence the price of prescription drugs. This website might offer you some assistance. http://physics.mnstate.edu/cabanela/contacting_the_congress_shutdown.php
If you’d like to write to the President of the United States, Here’s his address. If you write now your letter will go to President Obama. If you write after inauguration day on January 20th it will go to President Trump.
The White House.
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500.
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Bob Aronson is a former Journalist, Governor’s press secretary and international communications consultant. He is retired and lives with wife Robin in Jacksonville, Florida. Bob had a heart transplant at the Mayo Clinic in Jacksonville in 2007 and spends most of his time promoting organ donation and writing blogs about donation/transplantation and related subjects. He is the founder of Facebook’s over 4,000 member Organ Transplant Initiative (OTI) and of Bob’s Newheart blogs where there are nearly 300 posts on subjects like this. http://www.bobsnewheart.wordpress.com
By Bob Aronson
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.
It is an unfortunate fact of life that prescription drugs are more expensive in America than any other place in the world and as a result if you contract a serious illness like cancer you may not be able to afford the treatment that can save your life, even if you are insured.
It costs a whole lot of money to be sick in this country and a whole lot of people die — not because there is no medicine or treatment but because they can’t afford to get well. That strikes me as being just plain wrong.
Healthcare costs are skyrocketing, but prescription drugs lead the parade. Americans now spend a staggering $200 billion a year on them and the end is nowhere in sight. The cost of staying alive is growing at the rate of about 12 percent a year. It appears as though people are taking a lot more drugs than they used to and they are taking the really expensive new ones instead of older, cheaper drugs. The reason? Either physicians are pushing new medications too hard or, more likely, people are seeing the ads for new drugs in the media and are demanding them. Strangely, unlike most other businesses where prices come down with time, that’s not true with drugs. Price increases are commonplace even with the older ones and the increases aren’t one time adjustments. Often the price tag increases several times a year.
Earlier I pointed out that Americans pay more for their drugs than any other country in the world — but it isn’t just a little more…it’s a whole lot. On average, the cost of prescription drugs in the U.S. is at least double what people in other countries pay for the same exact prescription and it some cases it is 10 times more.
A 2013 report from the International Federation of Health Plans, says Nexium, the pill commonly prescribed for acid reflux, costs U.S. patients more than $200, while Swiss citizens only pay $60 and people who live in the Netherlands pay $23. But Nexium is a drop in the bucket compared to cancer drugs. http://www.drugwatch.com/2014/10/15/americans-pay-higher-prces-prescription-drugs/
Not long ago CBS’ 60 Minutes devoted a segment to the absurdly high cost of cancer drugs. Correspondent Lesley Stahl reported that many cancer drugs cost well over $100,000 for a year’s worth of medicine. She said that in the fight against cancer, most people can expect to be on more than one drug. The bill for medications can escalate to nearly $300,000, a price tag that doesn’t include fees charged by a doctor or a hospital. Health insurance companies – including government polices like Medicare – don’t cover the full cost of these drugs. Some policies don’t cover some of these drugs at all. But cancer is not alone in the extreme price arena. Drugs for chronic diseases like multiple sclerosis also carry inflated prices. Prescriptions of Copaxone and Gilenya cost about $4,000 and $5,500, respectively and that amount is almost three times more than the most-expensive price in other countries.
In the case of almost every other product sold on the free market, the older a product gets the less it costs. In the case of cancer drugs in America, the inverse is actually true. Novartis developed Gleevec, one of the most popular cancer drugs, in 2001 and sold it for $28,000 a year. By 2012, its cost rose to $92,000. Despite not being a novel treatment, Novartis is allowed to hike up the price every year in the United States.
So If you are a reasonably intelligent person you will ask three questions. 1) Why do these drugs cost so much? 2) What is being done to bring the prices down? And 3) Is there help available to people who can’t afford the drugs that can keep them alive.
Let’s answer the questions one at a time. First. Why are drugs so expensive? Well, if you listen to the big pharma companies they will tell you that the cost reflects their investment in research and development of the drugs. They will tell you they spend millions on drugs that don’t pan out and that expense is passed on to the patient. But are they telling the truth? No they aren’t! Pharmaceutical companies are fond of saying Americans take the lion’s share of the R&D costs for the rest of the world – calling other countries “foreign free riders.” So, drug companies are forced to charge Americans more to recover what they don’t get from other countries.
In fact, the more disturbing truth is that companies charge what they want in the U.S., and it’s a profiteering paradise for them. U.S. law protects these companies from free-market competition. For example, Medicare is not allowed to negotiate prices. By law, it has to pay exactly what the drug companies charge for any drug. In effect our lawmakers told the pharmaceutical companies that they can charge whatever they want and we (the taxpayers) will pay it. Even may insurance companies don’t negotiate or do it half-heartedly. Companies make billions on most of these drugs, and they receive massive tax breaks for R&D, leading to inflated figures. Another huge portion of the costs are subsidized by taxpayers.
Here’s the sad part of all this R and D and the introduction of new drugs. Only 1 in 10 of them actually provides substantial benefit over old drugs. To add insult to injury the side effects of the new entries create the need for more drugs. And — some of these drugs have horrible complications that result in lawsuits to recover damages.
University of Medicine and Dentistry of New Jersey Health professor and policy expert Donald W. Light says, “We can find no evidence to support the widely believed claims from industry that lower prices in other industrialized countries do not allow companies to recover their R&D costs so they have to charge Americans more to make up the difference and pay for these ‘foreign free riders,’”
In contrast, governments in other countries put caps on the price of drugs and negotiate prices based on what the actual therapeutic benefit is. And Big Pharma still turns a healthy profit in other countries, despite costs being 40 percent lower than they are in the United States.
Big Pharma would have many Americans believe that it is disadvantaged by the costs of developing a new drug. The truth is, drug companies are far from impoverished. EvaluatePharma’s most recent report shows that 2013 was the biggest year since 2009 for drug approvals. These new drugs will add nearly $25 billion to Big Pharma’s coffers by 2018, and prescription drug sales will exceed one trillion dollars by 2020.
The health care industry as a whole has more than enough money, with billions left to continue pursuing its interests in Washington.
Big Pharma Spends More on Lobbying Than Anyone
Since 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.
The world’s 11 largest drug companies made a net profit of $711.4 billion from 2003 to 2012. Six of these companies are headquartered in the United Sates: Johnson & Johnson, Pfizer, Abbot Laboratories, Merck, Bristol-Myers Squibb and Eli Lilly. In 2012 alone, the top 11 companies earned nearly $85 billion in net profits. According to IMS Health, a worldwide leader in health care research, the global market for pharmaceuticals is expected to top $1 trillion in sales by 2014.http://www.drugwatch.com/manufacturer/
But the large amount of cash Big Pharma bestows on government representatives and regulatory bodies is small when compared with the billions it spends each year on direct-to-consumer advertising. In 2012, the industry invested nearly $3.5 billion into marketing drugs on the Internet, TV, radio and other outlets. The United States is one of only two countries in the world whose governments allow prescription drugs to be advertised on TV (the other is New Zealand).
A single manufacturer, Boehringer Ingelheim, spent $464 million advertising its blood thinner Pradaxa in 2011. The following year, the drug passed the $1 billion sales mark. The money in this business appears to be well-spent.
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. We paysignificantly more than any other country for the exact same drugs. 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 you might ask, “What can I do to get the lowest possible price for my prescriptions?” Well, there are a few things. 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#/ or http://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 jn price from $526.00 at Wal Mart to $584 at Target. If you are a heart pateint and take Carvedilol in my neighborhood it ranges from $4.00 at WalMart 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 save money 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 according to Nelson, 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 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.)
- Consumer Reports goes on to say that “although the low costs we found at a few stores could entice you to get your prescriptions filled at multiple pharmacies based only on price, our medical consultants say 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.
Bob 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 firstname.lastname@example.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.