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Market forces are no salve for the high cost of prescription drugs

By Jan Swaney, M.D. and Ed Weisbart, M.D.
Columbia (Mo.) Daily Tribune, May 14, 2017

Leave it to an independent businessman to get so fed-up with the rising costs of his employee health plan that he hired a documentary film crew to get to the bottom of things. The result is “Big Pharma: Market Failure,” a new documentary that takes a deep dive into profiteering by the pharmaceutical industry and concludes this sector of our economy is a real and imminent threat to American business.

The first free local public screening will be at the Columbia Public Library on May 18 at 3 and 6 p.m. with a panel of experts. We invite you to attend and tell your story.

Riding a forklift along the warehouse floor with CEO and producer Richard Master, you learn that the company’s rise in cost of health care coverage from one year to the next amounts to $4 per employee per hour. The film also tells us that a third of Master’s health care costs are for prescription drugs, and it’s no longer unheard of for an employee with a chronic condition to be placed on medications that cost twice the employee’s annual salary.

The predicament faced by Master’s company is playing out all over the United States, in businesses small and large.

Things haven’t always been this way. Passage of Medicare Part D was a windfall for PhARMA, the organization that represents pharmaceutical manufacturers. While seniors gained some prescription drug coverage, the industry got a big infusion of elderly consumers. And if that weren’t enough, drug companies also got a nifty gift in the legislation called the “noninterference clause” that says the government can have no role in negotiating or setting drug prices in Medicare Part D. Medicare pays whatever the manufacturers charge.

Both major party candidates for president in 2016 called for legislation to enable the federal government to negotiate drug prices on behalf of Medicare recipients, as it does for Medicaid and the Veterans Administration.

Though candidate Trump promised to use his negotiating prowess to take on the pharmaceutical manufacturers, he has been remarkably silent on this pledge since meeting with representatives of PhARMA at the White House on Jan. 31. Instead, talk seems to have turned to providing regulatory relief for the manufacturers by speeding-up the drug approval process within the FDA.

Although we need to bring down drug prices, we can’t afford to stifle innovation in the pharmaceutical industry. Yet, having the financial resources to develop new drugs and making a killing in drugs are two entirely different things. The manufacturers say it takes $2 billion to bring a new drug to market. But according to Elizabeth Rosenthal, a Harvard medical school graduate and former emergency room doctor turned New York Times journalist and author of “An American Sickness: How Healthcare Became Big Business and How You Can Take it Back,” the actual price for research and development is a small fraction of this larger figure. That’s because the research development claim includes all of the glitzy television ads and related marketing strategies.

Now that healthcare costs us $3.2 trillion a year and represents 17.8 percent of GDP, you might well feel sucked dry from the bloodletting as you cobble together enough to purchase your medications. If so, you might think these numbers represent a mandate for change. But these figures also tell a second story — that very powerful special interests thrive in healthcare just as it is, benefitting from the status quo — and these people will try to persuade you and your elected representatives to opt for a salve or placebo.

Reining in the profiteering in healthcare will require citizens to come together for the common good and recognize what health economists have long observed: Unfettered markets do not work in healthcare and there are times when government must act boldly on its citizens’ behalf. We are financing a bonanza for pharmaceutical manufacturers and invite you to learn more about what can be done.

Join us on May 18 at the library.

Jan Swaney of Columbia and Ed Weisbart of St. Louis are members of Missouri chapter of Physicians for a National Health Program (www.pnhpmo.org).


http://www.columbiatribune.com...