Posted on 01/14/2020 7:47:11 AM PST by SeekAndFind
Over the holidays, I read Elton John's biography, "Me." He writes about his friendship with Freddie Mercury, the ultra-talented lead singer of the rock group Queen. Mercury tragically died of AIDS at the age of 45 in 1991. Mercury was one of the last people to die of the disease in Britain during the epidemic years. John writes sadly and almost offhandedly that if Mercury had lived one year longer, he probably would have survived because of the AIDS medication that eventually saved millions of lives.
Then, a few days ago, we all read on the front pages of newspapers the amazing story that cancer death rates (age-adjusted) have fallen to their lowest level in decades. Millions of lives saved. We are winning the race for the cure remarkably quickly. The decline in the death rate is due in part to the considerable drop in smoking, but it's also because of new drug therapies and treatments to combat tumors.
Deaths from heart disease have also fallen dramatically in recent decades, though in recent years, obesity in America has slowed progress. Still, new wonder drugs to deal with strokes and diabetes have played a major role. According to a report in the Journal of the American Medical Association, the total age-adjusted mortality rates per 100,000 people changed from 266.5 in 1999 to 165.0 in 2017 for heart disease; from 61.6 to 37.6 for stroke; and from 25.0 to 21.5 for diabetes."
The public is roughly twice as likely to survive a cancer diagnosis or a heart attack today compared with four decades ago.
Then, I turned on the TV and listened to the politicians vilify drug companies as public enemies. Democratic presidential candidate Sen. Elizabeth Warren refers to pharmaceutical firms as "corrupt cartels" that "rig the rules, insulate themselves from accountability, and line their pockets at the expense of American families." Vermont Sen. Bernie Sanders has likened drug company CEOs to murderers and says when they raise prices too much, we should "put them in jail."
On the Republican side of the aisle, President Donald Trump says the drug companies "get away with murder" and that he wants to force down drug prices, however possible.
CNBC recently noted that attacking drug companies is one of the remaining bipartisan activities in Washington.
Now, I will openly confess that I have received funding from the pharmaceutical industry, but even I find fault from time to time with some of the pricing activities of Big Pharma. It is outrageous that the public often has to pay twice for drugs developed here than what the Canadians, the Germans and the Japanese pay.
But it is an industry that should be celebrated, not denigrated. It's the ultimate example of how free market capitalism and the profit motive save lives.
The New York Times recently wrote an editorial protesting high drug prices charged to consumers. It wrote:
"The proposed law would enable the Health and Human Services secretary to negotiate prices directly with drugmakers on as many as 250 prescription drugs that Medicare spends the most money on. It would cap the final price based on the average paid by several peer nations, including Australia, Britain and Canada. The pharmaceutical industry could lose as much as $1 trillion in profits over a decade, and as a result would bring roughly eight to 15 fewer drugs to market during that time period (out of the 300 or so that would be expected), the Congressional Budget Office estimates."
By the way, that is only during the first eight, 10 or 12 years, while the firms hold the patent for the new drug, which can easily cost $1 billion or more to invent and test. Then, prices for drugs, vaccines and medical equipment fall forever after, and radically, thus benefiting all of humanity. To its credit, The New York Times conceded that drug price controls will save consumers money but will also delay for a year -- or two or three -- the introduction of new drugs. It came down on the side of lower prices.
But if we go in this direction, we should recognize the trade-off. Economist Milton Friedman used to say that when government regulation or price controls delay the introduction of a new drug that saves thousands of lives a year, the government policies are, in effect, killing thousands of people a year.
A one-year delay can cost the life of a superstar like Freddie Mercury or a loved one who has cancer. Is it worth it? You decide.
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Stephen Moore is a senior fellow at the Heritage Foundation and an economic consultant with FreedomWorks. He is the co-author of "Trumponomics: Inside the America First Plan to Revive the American Economy."
This hack admits getting paid by Big Pharma. Obviously to write this propaganda.
Aside from calling the writer a hack, do you have any counter arguments to his content?
I don’t have a problem with our government doing this.
After all, the drug companies are allowing it for all other countries in the world.
The companies should be charging a lot more to these other countries than they do. It’s not my or our fault they don’t charge more.
I read the article and I still don’t understand why they’re so high.I thought when Moore wrote that even he has issues with an industry that pays him and it’s outrageous that consumers here sometimes pay twice what those in India pay, he would answer why the prices are so high. I thought that was supposed to be the point of the article. Instead, he just shifted to saying how it’s a great industry, and there’s a tradeoff between lowering prices and saving lives. I feel like he left out a paragraph he intended to write to tie it all together.
‘.... Why Does Washington Demonize Drug Companies? ....”
Because political demagoguery works!
Letting all of pharma's research overhead be borne by American patients also costs lives, as many skip their medication or take less than prescribed.
I'd love to hear a more market-oriented solution than the proposed law; so far I haven't.
I guess it's okay if the delay only costs the life of a mere peasant ...
I couldn't care less about Freddie Mercury. Good riddance.
RE: I read the article and I still don’t understand why they’re so high.
OK, let’s start with Company X, which develops a drug to cure, slow down or treat Disease Y ( Name it, cancer, Alzheimer’s, diabetes,, etc. ).
How much money do they have to spend just to get the drugs APPROVED by the FDA for use?
From Phase 1 trials to Approval, it will cost almost a billion dollars in many cases.
After approval, who pays them back for all the money, effort, time and uncertainty it took them just to get the drug to market?
Answer — YOU and ME ( the patients ). Or should it be Medicaid and Medicare ( as other countries do it )?
Let’s start there first.
AIDS is mentioned in the first paragraph. Rather than expect people to refrain from carnal abomination, taxpayers were extorted out of $billions to come up with a preventive, even though they already existed (abstinence, condoms). Freddy Mercury? He’d probably be alive today but for decisions he made himself.
RE: AIDS is mentioned in the first paragraph. Rather than expect people to refrain from carnal abomination, taxpayers were extorted out of $billion
OK, let’s set AIDS aside for now. Let’s replace AIDS with Cancer or Alzheimers and discuss.
Foreign countries subsidize medications. Drives down price.
Yup. By negotiating very low pricing in other nations, US drug manufacturers are foisting the entire R&D onto US patients.
IMHO there are clues in the article referencing what I've always believed to be the three main culprits in high drug prices.
1) "...which can easily cost $1 billion or more to invent and test". Basically with the big risk of developing expensive drugs that may never work, no one goes into the drug R&D market without expecting huge profit to offset that risk. I don't think there's a way around this problem.
2) Not explicitly stated in the article, but related to the same quote I already posted is that fact that much of the high cost in R&D is getting the government to approve it. That means getting the government to approve the research, then getting the government to approve the results of the research so the next phase of research can be done, then getting the government to approve those results and allow it to be put to market. This part of the problem can be tackled easily. But instead of blaming "Big Pharma" we ought to blame "Big Govt" and demand the FDA not have so much red tape and layers of bureaucrats to weed through.
3) "...on as many as 250 prescription drugs that Medicare spends the most money on." This is a big part of the price boost. Basically anytime the government spends money on something they distort the market by boosting the price. If we changed that so that the only ones paying for drugs were the patients and their insurers (w/o govt messing with the insurance policies, the only insurers would be whatever insurance companies the patients paid premiums to in the free market) then prices would go way down to make them affordable enough to be bought.
The most simple and obvious response to the hack’s article is that the vicious and cruel pricing was not occurring in all the years improvement in health care rose. This corporate abuse is recent. Putting epi pen prices so high people’s lives were at risk was recent and vicious.
I pay 70$ for inhalers that were 7$ less than 10 years ago. Inflation is nowhere near that.
Check out CEO salaries. They are obscene
There is more. Much more.
RE: Check out CEO salaries. They are obscene
Here is a list of the 100 highest paid CEO’s in America:
Most Drug Companies are NOWHERE in the top 20.
The only CEO I see in the top 20 is the Biotech innovator — Gilead Sciences, a company that TAKES HUGE MONETARY RISKS to get the drugs they develop to market ( many rejected by the FDA after years of trials and hundreds of millions spent ). How much do you think the CEO of Gilead should be compensated so that your drug prices will go down? (BTW, Gilead does not make inhalers ).
> The companies should be charging a lot more to these other countries than they do. <
I’ve read that these other countries often put the squeeze on US drug companies. As in: Set a low price, or we will simply ignore your patent and produce the drug locally. Accept a small profit. Or you’ll have no profit at all.
Okey,
It takes a decade or more to develop new drugs, this means the industry has to initially charge big prices to keep the labs open and operating, maintenance and upgrades for tools of research and precise calibration of instruments, and we can’t ignore the huge cost to hire and retain scientists on staff and pay them a better-than-most salary to keep them on staff, and we can’t forget paying for patents (much more expensive and time consuming than most people realize), then there are trials and studies to comply with FDA requirements, and marketing and market entry. . .this is not a cheap endeavor.
It is basically cost-per-unit.
Imagine a washer/dryer maker and he takes 10-yrs to develop a new washer/dryer and then sells only 10. . .cost-per-unit is astronomical. This is the same challenge with medication; cost-per-unit to recoup costs invested upfront and no sales or revenue generated for 10-yrs or better.
Time and money. . .time and money.
So what? Everyone is biased, I would rather read an article by someone who admits theirs rather than a ‘journalist’ who pretends they have none.
Hmmm...you mean like the stock dividends? I paid $38 a share for ABBV, and I’m getting $4.72 a year right now. One of my better investments, but not very favorable to those using the drugs.
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