> President Trump would be doing a far greater service to the country
> if he directed the Department of Justice’ Antitrust Division to commence
> antitrust actions against Big Pharma for price fixing.
Not just Big Pharma, but the entire "health care" industry. It's all a giant cartel.
That said, it's wrong to allow American companies to sell products overseas for a fraction of the price they charge us here. The high prices we pay here are subsidizing the rest of the world.
If the "price targets" are set to the level that Pharma charges in other countries, I'm not opposed. If Pharma is willing to sell the stuff over there for those prices, why not here?
Oh, there's no profit, or no return on the R&D investment at those overseas prices? Fine, then raise them over there and we'll adjust our "targets" to match. Yes, Pharma needs to make a profit and recoup their R&D costs, but it doesn't need to be just Americans who bear that burden.
BTW, I have no real dog in this fight. I'm one of the very few people in their mid 60s who takes no prescription drugs. But I could tell you an interesting story about drug pricing for the one that my wife is on. Let me know if you want to hear it.
My wife has been taking a particular blood pressure medicine for a very long time. Way back when she was diagnosed with high BP, her doctor tried some other drugs first, but they all had side effects that my wife could not abide. Then he tried Olmesartan, which was fairly new, and still on patent (trade name Benicar). That worked great and had no noticeable side-effects. Doctor was reluctant because there was no generic, thus the stuff was fairly pricey. This was in the pre-Obamacare days, and he knew that our insurance did not include a prescription plan. Nonetheless, we were in a position to afford it, and not having side effects was worth it, so we paid for it out-of-pocket.
Fast-forward maybe 10 years. By this time, we'd long had a prescription plan (forced on my company by the ACA, but I digress). The patent on Olmesartan had expired, so at this point she was getting the generic version. We were heading out-of-town for a number of months, and my wife wanted to pick up several months worth of her meds in advance. Pharmacy told her she couldn't do that because the insurance wouldn't allow it. She said, "No problem, I'll pay for it out-of-pocket."
Well guess what? The cash price of the generic was higher than the cash price for the patented, name-brand stuff was ~10 years earlier!
Yes, we paid it, but we felt totally violated. Then I did a bit of internet to find overseas prices. They were around ~20% of what we'd just paid, and in the same ballpark as our co-pay would have been had we been able to use insurance.
As I said initially...the case for price targets is a case against price fixing.
Arbitrage is a real phenomenon where the same good has different prices in different geographic markets, but if the markets are even moderately free and frictionless, arbitrage is also a TEMPORARY phenomenon. Over time, prices should equalize.
With drug pricing, prices are not equalizing. That lack of an equalizing trend is incontrovertible proof of price fixing. Manipulated pricing is the only way arbitrage can be made permanent. It is on its face absolute proof of corruption and collusion. It's not only a sign of market power, it's one of the illegal/unethical means companies use to gain market power.
Experiences such as yours are why Big Pharma (and, yes, the whole healthcare industry) needs to be investigated aggressively on anti-trust and possibly even RICO grounds.
The reason there's so little arbitrage is because the FD&C Act, Section 801 and the Prescription Drug Marketing Act (PDMA) of 1987 prohibit it, at least on a commercial scale, and scale would be required for arbitrage to have a material effect on domestic prices.
It's almost like Congress gave Pharma permission to fix prices in a manner that's very disadvantageous to Americans.
So I came across an interesting site. It's part owned by Mark Cuban, who I'm not particularly a fan of, but..... Their cash price for a 90 day supply of my wife's BP meds is less than her co-pay after insurance for a 30-day supply from CVS. How can this be?
The only explanation I can come up with is that the insurance companies are in cahoots with the middlemen, and of course all the other providers too, but I digress.
This is what I'd imagined those meds should cost once they went off-patent and became available as generics:
90 pills: $10.46..(!) I don't know what the cash price is at CVS at present, but they charge her $15 for 30 pills as a co-pay, and and she still can't get more than 30 at once.
Healthcare is a cartel. I worked for a number of years in healthcare IT, working with several of the hospital systems in Houston. I've seen the cartel in operation.
I'm always uneasy about "antitrust" actions, because government getting involved in business is how companies get market power in the first place, generally speaking.
However, just as most medicines are toxins of one form or another, I am prepared to accept that government intrusion to correct an imbalance of market power can have therapeutic benefit to the market overall--and there is an indisputable imbalance of market power in healthcare.
Will the price targets make drug pricing better for Americans? Quite possibly, perhaps even probably.
Will there be consequences from President Trump flexing government muscles in this fashion? Most assuredly, and not all of those consequences will be benign. Hopefully the results on balance will work to the benefit of most Americans.
Government meddling in pricing is a deal with the devil on a good day. That we should never forget.
This tactic may be twofold. One, Trump may achieve a reduction in costs to consumers, which would be a great help to Republicans during the midterm elections. Two, Trump’s move forces out into the open which members of Congress are thoroughly intertwined with Big Pharma, controlled so much that they will end up looking like mere puppets of the medical-pharmaceutical industry - which would be a great help to Trump’s side during the midterm elections. “Art of the Deal” indeed!
> President Trump would be doing a far greater service to the country
> if he directed the Department of Justice’ Antitrust Division to commence
> antitrust actions against Big Pharma for price fixing.
Not just Big Pharma, but the entire "health care" industry. It's all a giant cartel.
That said, it's wrong to allow American companies to sell products overseas for a fraction of the price they charge us here. The high prices we pay here are subsidizing the rest of the world.
If the "price targets" are set to the level that Pharma charges in other countries, I'm not opposed. If Pharma is willing to sell the stuff over there for those prices, why not here?
Oh, there's no profit, or no return on the R&D investment at those overseas prices? Fine, then raise them over there and we'll adjust our "targets" to match. Yes, Pharma needs to make a profit and recoup their R&D costs, but it doesn't need to be just Americans who bear that burden.
BTW, I have no real dog in this fight. I'm one of the very few people in their mid 60s who takes no prescription drugs. But I could tell you an interesting story about drug pricing for the one that my wife is on. Let me know if you want to hear it.
I would very much like to hear your story. Please share!
My wife has been taking a particular blood pressure medicine for a very long time. Way back when she was diagnosed with high BP, her doctor tried some other drugs first, but they all had side effects that my wife could not abide. Then he tried Olmesartan, which was fairly new, and still on patent (trade name Benicar). That worked great and had no noticeable side-effects. Doctor was reluctant because there was no generic, thus the stuff was fairly pricey. This was in the pre-Obamacare days, and he knew that our insurance did not include a prescription plan. Nonetheless, we were in a position to afford it, and not having side effects was worth it, so we paid for it out-of-pocket.
Fast-forward maybe 10 years. By this time, we'd long had a prescription plan (forced on my company by the ACA, but I digress). The patent on Olmesartan had expired, so at this point she was getting the generic version. We were heading out-of-town for a number of months, and my wife wanted to pick up several months worth of her meds in advance. Pharmacy told her she couldn't do that because the insurance wouldn't allow it. She said, "No problem, I'll pay for it out-of-pocket."
Well guess what? The cash price of the generic was higher than the cash price for the patented, name-brand stuff was ~10 years earlier!
Yes, we paid it, but we felt totally violated. Then I did a bit of internet to find overseas prices. They were around ~20% of what we'd just paid, and in the same ballpark as our co-pay would have been had we been able to use insurance.
As I said initially...the case for price targets is a case against price fixing.
Arbitrage is a real phenomenon where the same good has different prices in different geographic markets, but if the markets are even moderately free and frictionless, arbitrage is also a TEMPORARY phenomenon. Over time, prices should equalize.
With drug pricing, prices are not equalizing. That lack of an equalizing trend is incontrovertible proof of price fixing. Manipulated pricing is the only way arbitrage can be made permanent. It is on its face absolute proof of corruption and collusion. It's not only a sign of market power, it's one of the illegal/unethical means companies use to gain market power.
Experiences such as yours are why Big Pharma (and, yes, the whole healthcare industry) needs to be investigated aggressively on anti-trust and possibly even RICO grounds.
The reason there's so little arbitrage is because the FD&C Act, Section 801 and the Prescription Drug Marketing Act (PDMA) of 1987 prohibit it, at least on a commercial scale, and scale would be required for arbitrage to have a material effect on domestic prices.
It's almost like Congress gave Pharma permission to fix prices in a manner that's very disadvantageous to Americans.
"Almost"?
So I came across an interesting site. It's part owned by Mark Cuban, who I'm not particularly a fan of, but..... Their cash price for a 90 day supply of my wife's BP meds is less than her co-pay after insurance for a 30-day supply from CVS. How can this be?
The only explanation I can come up with is that the insurance companies are in cahoots with the middlemen, and of course all the other providers too, but I digress.
This is what I'd imagined those meds should cost once they went off-patent and became available as generics:
https://www.costplusdrugs.com/medications/olmesartanmedoxomil-40mg-tablet/
90 pills: $10.46..(!) I don't know what the cash price is at CVS at present, but they charge her $15 for 30 pills as a co-pay, and and she still can't get more than 30 at once.
Healthcare is a cartel. I worked for a number of years in healthcare IT, working with several of the hospital systems in Houston. I've seen the cartel in operation.
I'm always uneasy about "antitrust" actions, because government getting involved in business is how companies get market power in the first place, generally speaking.
However, just as most medicines are toxins of one form or another, I am prepared to accept that government intrusion to correct an imbalance of market power can have therapeutic benefit to the market overall--and there is an indisputable imbalance of market power in healthcare.
Will the price targets make drug pricing better for Americans? Quite possibly, perhaps even probably.
Will there be consequences from President Trump flexing government muscles in this fashion? Most assuredly, and not all of those consequences will be benign. Hopefully the results on balance will work to the benefit of most Americans.
Government meddling in pricing is a deal with the devil on a good day. That we should never forget.
This tactic may be twofold. One, Trump may achieve a reduction in costs to consumers, which would be a great help to Republicans during the midterm elections. Two, Trump’s move forces out into the open which members of Congress are thoroughly intertwined with Big Pharma, controlled so much that they will end up looking like mere puppets of the medical-pharmaceutical industry - which would be a great help to Trump’s side during the midterm elections. “Art of the Deal” indeed!