Posted on 08/06/2019 7:35:35 AM PDT by Kaslin
By almost any measure, the drug companies are the most profitable in the world. The “back up the truck” compensation paid to their executives reflect that. They are among the world’s largest advertisers and political donors as well. They hide behind white lab coats. They parade around under the banner of curing diseases for the benefit of all mankind. They conveniently ignore how much of their research is underwritten by Americans through their donations and taxes.
They then charge those same Americans multiples more than they charge people in the rest of the industrialized world.
Drug companies only pretend to be strong proponents of free market capitalism. There really is no free market for prescription drugs in the United States. Free markets require price transparency and real competition, which they thwart at every turn. We are left with an ugly, expensive strain of crony capitalism. Products that are critical for life itself are meted out by patent-protected monopolies. Unregulated monopolies inevitably become inefficient and grossly expensive.
Drug Companies abuse the patent process by filing new patents for even minuscule changes to their original compound. As AstraZeneka did when they used the same active ingredient in Prilosec to produce Nexium. Or they dramatically raise prices after they get new patents for modifying the way a drug is produced, as they’ve done with insulin. Contrary to popular belief, Eli Lilly did not invent the process for purifying insulin. They have, however, profited enormously over the last century. Since they began producing insulin synthetically (with new patents of course) they have nearly tripled the price…to Americans. This has driven more diabetics to go to Canada, where it sells for a fraction of the price.
My core premise is not so much to say shame on the drug companies. Rather it is to say shame on us. We the People, through our elected representatives, have allowed this system to morph and metastasize into the expensive mess we have today.
It is tragic for those Americans who fall through the cracks. Those who do not have gold plated health insurance plans, including generous drug coverage. Due to the prohibitive costs, those insurance plans are becoming rare. Large co-pays and deductibles are the order of the day. So, more and more Americans are experiencing sticker shock as they struggle to pay for the drugs that they and their families desperately need.
President Obama promised to do something about this. He didn’t.
Enter a populist president who really believes in his America First agenda. He owes no allegiance to the all-powerful PhARMA. Even though he appointed the former CEO of Eli Lilly (who’s heart may or may not be in this fight) to head HHS, President Trump has relentlessly pushed this issue on several fronts. Much like his trade battle with China, he knows Americans are being taken to the cleaners and he is not going to stand for it!
Trump persisted. He recently announced that by executive order, he would allow Americans to start buying Rx drugs from Canada. On insulin alone this could save Americans and their insurance carriers billions. When fully implemented, the savings for healthcare could easily top an eye-popping $50 billion every year!
The same people who become animated over free trade change sides when it comes to prescription drugs. They strongly support importing cheap knockoffs from Communist China. But, free trade must not extend to Rx drugs from Canada. God forbid! Canada has socialized medicine. In truth, the Canadians may be a lot smarter negotiators than we are. They do their homework. They research what it actually costs to develop and test a new drug. They then determine prices that are fair to both the companies and Canadians. It’s not all that arbitrary and it is still quite profitable.
Once again, President Trump’s instincts are spot on. He must press this fight. His persistence will pay big dividends for all Americans.
Actually, my drug coverage isn’t very good at all. Fortunately, it’s been 12 years since I had to take a prescription drug for anything!
I don't believe this is true at all. There are 150+ countries that have signed onto the current international patent treaty.
Keep in mind that most of these major drug companies are enormous conglomerates that have a corporate presence all over the world.
The hard part is that it is impossible to kill all the spider slugs with sharp teeth, attacking you, all the while singing the Battle Hymn of the Republic, and carrying mini-uzi’s that shoot sprinkles. I hate that!
Think about it ...
A pharmaceutical company that is looking to upgrade its plant and equipment to produce a new (expensive) drug has to pay inflated prices for steel due to a U.S. tariff on Canadian steel when it upgrades its facilities, but then it has to compete with a tariff-free imports of its product from Canada when it prices the drug for the U.S. market.
Like I said ... It's actually comical to see "conservative" authors buy into this nonsense.
Wow. You’re lucky! You had great hallucinations.
They just make me barf.
“””I don’t believe this is true at all. There are 150+ countries that have signed onto the current international patent treaty.
Keep in mind that most of these major drug companies are enormous conglomerates that have a corporate presence all over the world.”””
You are correct.
I believe there is a simple way to fix the Big Pharma drug pricing scam.
Walgreens, CVS, Walmart and the other retail pharmacies should demand a ‘most favored nations’ clause in their contracts with Big Pharma. Under a ‘most favored nations’ clause, Big Pharma could not sell drugs to the retail pharmacists at a price higher than what they charge other countries.
Re $40 vs $300
My pharmacist told me once that my insurance company was getting back the $$ difference in the cost of buying name brand Synthroid. Through my insurance it was $85. Buying it without insurance cost maybe $28 at that time.
The pharmacy sent my insurance company $57. Galling. Of course I bought it without insurance.
This article seems to say the same thing.
https://imedicare.com/articles/what-do-clawback-fees-mean-for-pharmacies-and-patients/
What Do Clawback Fees Mean for Pharmacies and Patients?
Posted by: Esra El-Shafey on June 02, 2016 in category: Industry updates
Most people have insurance because among many things, insurance companies are supposed to reduce costs of medications and provide coverage. However, further investigation into the world of insurance companies shows that this does not happen in many cases.
A copay is when a person pays a fraction on the costs. This is standard in insurance policies, but evidence from numerous pharmacies show that companies are charging copays that exceed the value of drugs, increasing costs for customers.
This method is called a clawback. Basically, a clawback is when an insurance company claws back money from patients.
According to a New Orleans Fox affiliate, Fox 8 Live News segment, patients most likely don’t even realize this method is implemented by companies because they often times do not know the costs of their drugs without insurance.
The investigative report by the news organization shows a breakdown of a clawback using a document given to the news station by a pharmacist. The document shows all costs for the drug Sprintec, a contraceptive and acne treatment.
It shows the cost of the drug, tax, and the pharmacist’s fee. All charges total $11.65. However, the customer was charged a $50 required copay. The document also highlights that $38.35 was sent back to the insurance company’s pharmacy benefit manager.
So in total, the patient paid $50, and an additional monthly premium for the privilege to pay the discounted copay. But in reality, nearly 80% of that co-pay was returned to the PBM via the clawback or DIR fee.
The acquisition cost of Sprintec is very likely more than the $11.65 the pharmacy was left with, and less than the $50 copay the patient forked over. This is an example of a lose/lose scenario, where the patient overpays for a medication, and the pharmacy is paid less than their acquisition cost. No one benefits from this scenario, except for the PBM.
Unfortunately, many times, pharmacists are contractually banned from telling customers about cheaper alternatives to clawbacks, which is why all pharmacist submissions to the news investigation were anonymous.
If a copay is required, the pharmacist must charge the patient. Occasionally pharmacists are not aware of these fees at the time the medication is dispensed, and the fees are assessed by the plan and PBM periodically throughout the year, during “reconciliations” that occur months after drugs are dispensed to patients
One anonymous source told Fox 8 that they are not allow to discount or forgive the copay under any circumstances. Essentially, the customer is paying more to acquire the drug even with insurance. This practice is unsettling because it essentially defeats the purpose of having insurance.
Overall, the copay is not even a fraction of the cost of the drug when it comes to clawbacks because customers are actually paying more than they should.
The clawback is a symptom of the lack of transparency that is pervasive in the healthcare industry. There is bipartisan support in Congress for “negotiated price” guidance because it is in the best interests of the taxpayer, independent pharmacists, and good fiscal management.
However, no legislation has been passed at the federal level. Community pharmacists support efforts to bring forth further transparency in order to prevent clawbacks.
Thankfully, clawbacks do not occur on every medication. Nonetheless, it’s advisable for patients to research or ask what the actual cost of their medication is in order to compare prices with and without insurance coverage.
If there is such a discrepancy, it might be best to consult with a pharmacist on changing your Medicare Part D plan to better accommodate your needs and avoid costly clawbacks.
Do a web search for “Pharmacy/CoPay/Insurance Clawback”.
don’t believe this is true at all. There are 150+ countries that have signed onto the current international patent treaty.
**************
Patent treaties are meaningless if governments can evade patents by price controls. Price controls are an attempt to claw-back the benefits of patents after the drug is brought to market.
There's a guy in my area who writes these great screeds about the health insurance racket in the comment section of a local news website. He comes up with all kinds of examples of how idiotic the whole system is. In one case, he cites a family member who was taking a certain prescription drug. They went to CVS or Walgreens with their insurance card, and they were told that the prescription would cost $95 under their plan -- which meant they had to pay a $40 co-pay for it. That seemed high to them, so they asked the pharmacist how much the drug would cost if they paid cash for it. The pharmacist hesitated, shrugged his shoulders, and said: "That would be $24.95."
That sounds like a business model built by someone missing at least a half-dozen chromosomes. The person who pays hundreds or thousands of dollars a month for insurance coverage with a $10,000 annual deductible pays $40 out of a $95 "cost" for a drug, while the guy who walks in off the street pays $24.95?
If true, then I would support a form of price control that says we will pay no more than the average price paid in the EU, for example.
Under a ‘most favored nations’ clause, Big Pharma could not sell drugs to the retail pharmacists at a price higher than what they charge other countries.
*********
That’ll force the drug companies to RAISE prices charged to foreign consumers, or else do without the benefits of the patents that brought the drugs to market. Are American politicians and bleeding hearts ready to take the heat that they are going to get from foreigners and socialists in our media? Some of the foreign countries will surely respond by withdrawing from the patent treaty.
The other way it is evident that the major pharmaceutical companies do not really give a twit about free markets is they have no problem at all paying government dictated prices in other economies all over the world, primarily because they know they can subsidize those discounted prices by getting whatever they want in the U.S. market.
No, I am not for “government rigged” prices but the major drug makers obviously don’t have a problem with it.
The U.S. needs to make government rigged drug prices the problem of the major pharmaceutical companies.
How?
A simple rule that does not dictate specific drug prices but instead turns the government dictated prices the drug makers agree to into a problem that weighs on what prices they can charge in the U.S. That simple rule would make the price limit for a drug in the U.S. as no greater than the medium price for that drug that the manufacturer has accepted in the government rigged markets it provides the drug to.
However much they agree to discount a drug to meet other governments’ price fixing, they would have to do no more, and no less of a discount in the U.S. market than the median of all the discounts it offered elsewhere.
Whether they had to exit a market (with a particular drug) or bring the U.S. price into the median of its discounted prices, either way the U.S. drug prices would go down. They’d even go down in the former case because they’d no longer be making the slimmed down revenue margins they get in the government rigged markets, so the U.S. prices would not have to subsidize those lower profit margins.
I can remember when a $10.00 prescription was an outrage.
If rich countries pay more than poor countries then, I think car companies should have different prices for everyone, it is only fair that those with the most money should pay more.
I can remember when 3% sales tax provided good services and kept the town clean and neat.
I was in Oklahoma when they passed a 2% sales tax to create and Old Age Assistance program that paid the Old Aged $19.50 a month. That was best I can recall right after WW II.
A drug patent is filed upon initial discovery of the molecule, often a decade before the development and clinical trials have been completed.
Early on in that molecule's lifespan, the NPV is low. It has to pass safety testing, demonstrate efficacy, and then pass large-scale testing, usually in head-to-head competition against the current standard of care. NONE of that research is funded by public entities; the pharma companies take those expenses on themselves.
If the molecule makes it to and through Phase III testing, the pharma company has to decide whether to pursue a submission and launch. Perhaps a billion to a billion and a half dollars (sometimes more) have been spent up to this stage, over 10-12 years' time.
So the pharma company submits to the FDA, and asks for approval. Are you suggesting that at this stage, the government steps in and buys out the patent? What could the government possibly offer at that point? What incentive is there to continue to operate in a model like this--ALL the risk is on the pharma company for pursuing medicines of their choosing.
It amazes me that the FreeRepublic community purports to be a freedom-loving, small government, keep-your-hands out of my business, pro-capitalism group. But when it comes to healthcare, posters like you embrace socialism like there's no tomorrow.
And how long would your little game of greenmail work? How long would pharma companies be able to match other countries' prices like that?
You don't understand the costs associated with R&D pharma, and it shows.
If what you say is true, then the world must face more expensive drugs.
Why should Medicaare pay when the world gets off free of R&D ex[ese.
Let them pay or die
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