Health Care/Joan Retsinas

Yes We Can Fleece the Customer

The mantra of this Administration is Yes We Can, a perverse re-interpretation of candidate Obama’s mantra, the one that crowds chanted in 2008.

That chant invoked our higher angels. Maybe progress would be as plausible as his election.

Trump Inc. shifted the meaning. Forget those higher angels. Look to self-aggrandizement. Concoct real estate deals while president? Put ethically-challenged cronies into the cabinet? Trash environmental protections? Why not? Because Trump Inc. can.

So it is no surprise that Big Pharma heeded the call: Yes We Can. In the past few years, companies zealously marketed opioids, knowing that the addictive power of those drugs would drive patients into users into body bags. No matter. Profits über alles. Because the companies could market the agents of death, at humongous profits, they did. Now we are tamping down. States have levied suits; physician groups have spoken up; and one Big Pharma, Purdue, declared bankruptcy.

No surprise either that companies have hiked prices for drugs. Candidate Trump promised to bring down prices — as empty a promise as promises to jump-start manufacturing, revive coal and give everybody “wonderful” health insurance. Bluster generally leads to more bluster.

Consider the meteoric rise in drug prices. At a time of low inflation (2.2%), companies last year hiked their prices on 250 drugs by an average of 6.3%. (“Drugmakers Celebrate the New Year by Raising Prices on Hundreds of Drugs an Average of 6.3%,” by Kevin Kelleher, Jan. 2, 2019, Fortune). Pain was profitable: the tab for Zingo, one medication, rose 133%; other pain drugs rose from 10% to 20%.

There is almost a competition for the most expensive disease-to-treat. Does hemophilia win at $580,000 to $800,000, or non-Hodgkin’s Lymphoma, at $475,000?

Today’s treatment for hepatitis is effective, but costs as much as $90,000 per patient. Minnesota estimates that 15% of prisoners test positive. Treatment would cost $75 million, outstripping the state’s total prison medical care budget of $27 million. Nationwide, 97% of inmates with hepatitis C receive no treatment. (“State Prisons Fail To Offer Cure To 144,000 Inmates With Deadly Hepatitis C,” Kaiser Health News, July 9, 2018). Prison offers a rare opportunity to treat infected patients; once they are discharged, they enter the mainstream population, with hepatitis.

With insulin, the drug companies showed their mettle. The numbers of people needing drugs for hemophilia or non-Hodgkins lymphoma are low, compared to the millions of Americans with diabetes who need insulin. Yet the price of insulin overall doubled from 2012 to 2016, increasing from 13 cents per unit to 25 cents per unit, or from $7.80 daily to $15.. Lisper (humalog) went from $35 in 2001 to $234 per vial in 2015, to $270 in 2017. Not surprisingly the spike in insulin prices has spurred a congressional investigation.

All Americans pay the tab — even insured Americans, even healthy ones. Insurers calculate that one-fifth of premiums go for drug costs; but insurers have shifted the added costs to enrollees via higher co-pays and deductibles.

A perverse, purposively unregulated market spurs the increases.

Start with Pharmacy Benefit Managers. Robin Feldman in the forthcoming Drugs, Money, & Secret Handshakes: The Unstoppable Growth of Prescription Drug Prices, traces increases to pharmacy benefit managers, who negotiate with companies to set formularies; the PBMs in turn receive a percentage of the savings: the higher the price of the drug, the more the PBMs net.

Pharmaceutical companies do offer steep rebates to insurers and hospitals, but those rebates do not trickle down to consumers.

Generics cost less than “name-brand” drugs, but patent laws offer myriad ways for companies to extend patents, blocking generics.

With insulin, the congressional panel found market forces simply did not exist to clamp down producers’ zeal to raise prices.

Finally, Big Pharma operates much of the time as a monopoly. Typically, the “market” curbs prices at the negotiating table, but with Medicare, by law, there is no negotiating table. Medicare is prohibited from negotiating with drug companies, but accepts, and bemoans, the prices. (In contrast, the Veterans’ Administration does negotiate drug prices.)

In short, pharmaceutical companies have spiked prices because they can.

The solution — anathema to conservatives — is for Uncle Sam to step in, to negotiate prices that will not leave patients scrambling to set up crowdfund sites to pay for treatments. (Why are so many Americans crowdfunding their healthcare ...)

In many countries citizens pay less for drugs: their governments intervene. Let’s call on ours. Yes, we can.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.

From The Progressive Populist, April 15, 2019

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