2019 Is The Year Pharma Pays

If any lobby in Washington can be said to lead a charmed life, it is the pharmaceutical industry. Having co-opted everyone from Cory Booker to frequent Trump ally Chris Collins, the industry enjoys wide bipartisan support, despite frequently slicing away at every conceivable protection Americans can use against being priced into ruin. And, of course, then proceeding to do precisely that once those protections are gone.

Again, this is an industry that most of Washington is afraid to cross, even though they have done such politically nigh-suicidal things as bleeding cancer patients dry for their money, testing opioids on children in order to maintain their patents, and then turning round and creating the opioid crisis by bribing doctors to prescribe the drugs. This is the sort of behavior that even Bernie Madoff and Martin Shkreli would shrink from if someone suggested it to them. Yet so bulletproof has Pharma been in DC that they kept right on doing it, thinking there would never be a price to pay.

What’s worse, they even tried to co-opt the Trump administration. Thanks to the ministrations of Vice President Mike Pence, numerous Pharma cronies were installed in influential places throughout the Trump administration early on. And so, despite the fact that President Trump ran on an anti-Pharma platform and accused the industry of “getting away with murder,” somehow Trump’s administration found itself doing things like gutting the voluntary 340b drug pricing program, which was one of the few programs capable of forcing the industry to behave in a public spirited fashion in exchange for billions of Medicare and Medicaid tax dollars. Only when Health and Human Services (HHS) Secretary Alex Azar, and Food and Drug Administration head Scott Gottlieb, began to get their sea legs, did the Trump administration even begin to right the ship from a regulatory perspective. Thankfully, Azar and Gottlieb have both expressed impatience with Pharma in the meantime.

But even if the administration had started to hold their feet to the fire, Pharma still had Congress mostly buttoned up, being able to argue to just enough Republicans that their ability to effortlessly dominate the drug market was not the result of horrific monopolistic power and regulatory capture, but was instead just the good old fashioned American free market. But while this move insulated them in the most recent Congress, this transparently disingenuous attempt to exploit an ideological blind spot also gave Democrats a winning issue to run on in 2018: health care costs in general, and drug prices in particular.

The result is that the new Congress looks poised to go after Pharma extremely fiercely. In fact, so stiff are their spines on the subject that even the current Congress has begun standing up to the drug companies. Very recently, Congress raised the amount of money that Pharma must pay for prescription drugs covered under the Medicare Part D drug pricing program to 70 percent -- a move that effectively cost the industry billions. Naturally, Pharma mounted a lobbying campaign to try to change it back. At any other time, Congress would have listened, and acted accordingly.

Not now. In a move that the Washington Examiner describes as “foreshadow[ing] a treacherous 2019,” Congress politely told Pharma to go pound sand and refused to include their language ending the 70 percent change in the upcoming spending bill. If this kind of dogged refusal to let Pharma complain lasts into the new year, and there’s every indicator that it will, we might see some reforms that, until now, had all the bipartisan consensus behind them, but none of the political will: reforms like the CREATES Act, which cracks down on methods by which Pharma tries to obstruct generic drugmakers from competing with them, and thus from lowering the prices for their drugs. What’s more, unlike more politically fraught industries like tech, Pharma is the one sector of the economy that both President Trump and soon-to-be Speaker Pelosi want to cut down to size, and neither politician is known for their restraint in pursuing their political enemies.

Yes, it’s a catchphrase in Washington that Pharma always wins. But at some point, politicians end up saying “no mas.” And judging by the midterm election results, Americans aren’t tired of winning, but they’re certainly tired of Pharma winning.

Indeed! I was in the pharma biz for almost 40 years. Started so young I got to retire at 60!

Only the horror stories get told. Pills are big biz, plus pain relief.
What you don’t hear about are the BILLIONS of vials and IV bags of medications that are made every year without a hitch.

Drug development takes 10 years or more costing hundreds of millions.
Equipment to make medical products cost millions alone, not to mention the cost of the buildings and utilities that must be built.

I’ve run production lines that filled 400,000 liters of saline at 80 cents a liter, to filling 1mL vials with $1,000 of somethingamab.

Quality was drilled into us from day one, just remember they said, the next person to get these meds might be your family!

Not long ago, I did some math to try and estimate how many units of life saving therapeutics I had made over the years.

My estimate was 1.2Trillion units...vials, syringes, ampules and IV bags and bottles. Nothing made on my watch killed anyone because my teams or I screwed up!

ANOTHER PROGRESSIVE MYTH DEBUNKED: What the Prescription Drug Debate Gets Wrong. If we want new drugs for Alzheimer’s and the other ravages of old age, the last thing we need is European-style price controls at the pharmacy. But that’s the dream of Democrats, and the Trump administration is unfortunately threatening to go along with it.

This campaign is based on the same myth that was used to sell Obamacare: Americans are dying because their health-care system is an international disgrace. While it’s true that Canadians’ and western Europeans’ life expectancy is higher than Americans’, it’s not because of their price-controlled drugs and government health services. The gap is due to variables that have nothing to do with health-care systems: the higher rates in America of poverty, obesity, smoking, homicide, fatal accidents and other factors.

The gap would be even larger if it weren’t for the fact that Americans receive better health care, particularly for heart disease and cancer. And the chief reason that American patients fare better than European patients is that they get earlier access to more new drugs. A dollar spent on drugs does more to combat disease and disability than a dollar spent anywhere else.

Yes, Canadians and Europeans pay less at the pharmacy, but they’re getting what they pay for. Why would Trump want to copy them? He should look at the numbers. Americans already get a much better deal.

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Zytiga hasn’t been as newsy, but it’s a worthier poster drug because it does reflect a widespread and fundamental problem with the European system. This prostate-cancer drug received brief attention in connection with Abdelbaset al-Megrahi, the Libyan convicted of plotting the bombing of a Pan Am plane over Lockerbie, Scotland, in 1988. He was sentenced to life in prison in Scotland but released in 2009. The release, which generated international outrage, was justified on compassionate grounds after British doctors determined that he had less than three months to live because his prostate cancer was “resistant to any treatment options of known effectiveness.”

After returning to Libya, he received treatments not offered in the United Kingdom, including Zytiga, a new drug that dramatically increased survival rates. It was developed by Johnson & Johnson and launched first in the United States, where al-Megrahi’s family reportedly procured it. Instead of dying within three months, he lived for almost three more years (generating more outrage). During that time, the British government rejected Zytiga as too expensive to be offered to patients in the National Health Service. Shortly after al-Megrahi’s death in 2012, the drug won approval for use by a limited number of patients in England, but it took another three years to be approved in Scotland, and even then, it was limited to a minority of men with prostate cancer (those who had already undergone other therapy). The frustration of the majority was summed up in 2016 by the Express newspaper in a headline: CANCER DRUG “GOOD ENOUGH FOR LOCKERBIE BOMBER” WILL NOT BE GIVEN TO SCOTS NHS PATIENTS.

Zytiga is not an isolated example. All kinds of patients die in Europe waiting for drugs already available to Americans. The hub of pharmaceutical innovation has moved from the price-controlled countries of Europe to the United States as companies have shifted laboratories and focus to the market with the best returns. America has been called the “Pharmacy to the World” because it’s where more than half of new drugs are developed and tested in clinical trials.

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to put those prices in perspective, consider an international comparison published this year by Irene Papanicolas and colleagues at Harvard. Americans spend annually about $1,000 per capita on prescription drugs (of which $150 comes out of their pockets—the rest is covered by insurance). In other affluent countries, the per-capita spending ranges from about $300 in Australia and the Netherlands to about $800 in Switzerland (a distant second to America in developing new drugs). The annual figure is about $400 in the United Kingdom and Japan, $500 in Germany, France, and Sweden, and $600 in Canada and Denmark.

So the average difference between the U.S. and the other countries on drug spending is about $500 a year per person, hardly an astronomical sum to pay for better health, especially considering how much more money is spent in the rest of the health-care system.

Link: https://www.city-journal.org/price-controls-on-pharmaceuticals

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