Posted on 01/14/2018 9:55:41 AM PST by Kaslin
2018 has barely finished dawning, and already, the pharmaceutical industry once more has egg on its face from outrageous price hikes.
This time, the culprit is pharmaceutical startup NextSource, which apparently has taken a 40-year-old cancer drug known as lomustine, and ruthlessly hiked its price from $50/pill in 2013, to $768/pill now. In other words, they’ve raised the price of the drug by over 1400% over the past five years.
NextSource’s defense for why this has happened has to be read to be believed. CBS News reports that the company’s CEO, Robert DiCrisci, claims that the company set the price based on the costs it incurred in developing the drug, and “the benefits it provides patients.”
Now, obviously, the drug has been around for 40 years, so the costs of developing it to NextSource, which only acquired the rights to it in 2013, have likely been nonexistent. Which means that the company set the price entirely on the basis of the fact that the drug benefits patients, or to put it more bluntly, the fact that patients need the drug in order to not die. “Nice life you’ve got there, shame if anything happened to it,” is essentially their reasoning. Granted, NextSource is far from the only pharma company to hike its prices with the new year – the practice is still distressingly widespread – but it is the most egregious.
Now, sure, some True Conservatives ™ might read this news and loosen their bowties just enough to nasally intone that that’s how markets work, and what are you, a socialist? And you know what? If this were a price that was set in anything that looked remotely like a free market, they’d have at least a point about the process involved. But, and I will repeat this point until I’m blue in the face, the drug market is not a free market. Rather, it is an assortment of monopolies or near-monopolies that drug companies will move heaven and earth to protect, so that they can go on charging any price they want. In fact, lomustine, which has somehow never been developed into a generic drug in 40 years of existing, is a perfect example of how these practices can lead to de facto monopolies, long after their legal foundations erode. If a generic version of lomustine existed – in other words, if market competition were introduced – it is highly dubious that the drug would fetch even a fraction of its original cost, let alone the gouged nightmare it has become.
And make no mistake, Big Pharma very much wants us to remain at the mercy of their monopolistic practices, and not to be subjected to market forces. The fate of lomustine is what they would impose on every single drug on earth, if they could. You can tell because every legislative or policy-driven attempt to introduce market forces, or to curb price gouging in their absence, is on Pharma’s hit list.
The US Patent and Trademark Office (USPTO)’s common sense attempt to crack down on unfairly renewed and issued patents through the Inter Partes Review process? Pharma’s against it, even though it has almost never gone against them.
The CREATES Act, which would enable generic drug manufacturers to purchase samples of brand name drugs once they got approval from the FDA, rather than letting pharma go on abusing the Risk Evaluation and Mitigation Strategies (REMS) program? Pharma blatantly lied about what it would do, to try and sink it.
The 340B drug pricing program, which enables safety net hospitals, rural hospitals, children’s hospitals, and any number of other underfunded institutions to purchase drugs at lower prices, as a condition of Pharma’s continued access to taxpayer dollars? Pharma has campaigned against it for years, and cheered its being gutted by friends of theirs at the Department of Health and Human Services (HHS ), though Congress may resolve this particular mistake.
In other words, lomustine’s hike is a powerful and needed reminder of what the future of the US drug market will look like if the pharmaceutical industry is not held to account. Fortunately, bipartisan coalitions exist to challenge them. With any luck, 2018 will prove to be for those coalitions what it should also be for President Trump: a year of action.
‘What about other countries?’
interesting you mention that...when my mother was suffering her fatal bout of ovarian cancer, her doctor explained to us that the US standard of treatment was a cocktail of two chemo drugs (Taxil and Carboplatin, for instance) but the UK standard was one drug...this, he stated with no equivocation, was done for monetary purposes...
he put her on one drug, Carboplatin, known to exhibit fewer side effects; it helped not at all, but at least she didn’t pauper herself and go around looking deathly ill for a period of time...
So she was given a drug that was useless?
‘So she was given a drug that was useless?’
not useless; just not effective for her, and she elected to not go the heavier cocktail route...carboplatin has worked as intended for scores of people, with the added benefit of fewer ghastly side effects, but it obviously is not a magic potion, nothing is...
Thank you, W Tell... YOu beat me to it.
Also Teddy Bear’s statement that I (and you) are defending socialism is a bit off mark.
When is defending private property rights considered to be “socialism?” That’s a stretch.
So even considering this case where the company bought the rights to the drug, I’m not defending socialism.
Tell me about the ripoff known as CPAP supplies.
That is not capitalism no matter what you want to tell yourself.
Reading more now. So an FDA approved supplier is now making it so ...
For anyone else who is interested. I am not sure what holds the patent yet.
This sounds like a scam to me. Maybe legal but a scam all the same. Be interesting to know what a compounding pharmacy would charge to make it.
Fair comment, however I see you’re no longer claiming I’m “defending socialism.” There is nothing socialist about defending private property rights. Socialism is all about “the collective” vs the individual (in this case, a company is the “individual.”
As you say, defending patents is not pure capitalism and I tend to agree, but there are other interesting viewpoints that state that patents (or drug patent protection) have the attributes of personal property.
In addition consider that you own your house too, right? Is that a monopoly on the ownership of your house, protected by the government issuing you title to the property and enforced by the police if someone wants to start living in your house? Does that mean it’s socialism? Does that mean home ownership is not a capitalist concept?
https://hallingblog.com/2009/05/31/the-myth-that-patents-are-a-monopoly/
The definition I use for a monopoly is from Wikipedia. Those economists who use the phrase “monopoly power” have to admit that every property right confers some monopoly power. This leads to the nonsense that every property right is a monopoly.
Historically the concept of monopoly comes from England’s Statute of Monopolies. This statue limited government power, but did not limit private property rights. Patents are private property rights. The statute 35 U.S.C. 261 states patents have the attributes of personal property. The system of recording patents, the ability to license and assign patents, and the nonpolitical process or granting patent rights are the attributes of property. Monopolies (as defined in the Statue of Monopolies) are issued by politicians for markets, not specific embodiments of products. There is no such thing as designing around a monopoly. The Sherman Antitrust Act turned the whole concept of monopolies on its head. The Sherman Antitrust Act limits the ability of private citizens to use private property. This is the exact opposite of the Statute of Monopolies which limited government’s (the crown) power.
If you use the political language of “monopoly power”, you end up in the absurd situation of suggesting that all private property is monopoly power. I reject this as illogical position as an attempt to destroy private property by Marxists.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.