Remember when big pharma pledged to support healthcare reform by reducing costs by US$8 billion each year—US$80 billion over 10 years—after the reform measure is in place. Then you shouldn’t be surprised to learn that the prescription drug cartel raised prices this year by more than US$10 billion, or about nine percent. Meanwhile the Consumer Price Index has fallen by 1.3 percent.
This is the same kind of price run-up that occurred when Congress passed the Medicare drug benefit.
Merck spokesperson Ron Rodgers told New York Times reporter Duff Wilson, “Price adjustments for our products have no connection to health care reform.” Wilson reports that Merck raised its prices about 8.9 percent over the past year.
University of Minnesota professor of pharmaceutical economics Stephen Schondelmeyer found that drug prices in the US have risen this year by 9.3%. Schondelmeyer’s research was funded by AARP. The prescription drug cartel bizarrely argues that Schondelmeyer’s research is politically motivated.
“In AARP’s skewed view of the world, medicines are always looked at as a cost and never seen as a savings—even though medicines often reduce unnecessary hospitalization, help avoid costly medical procedures, and increase productivity through better prevention and management of chronic diseases,” Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America (PhRMA) told Wilson. Ouch, that twisted logic must have really hurt. Never mind that Wilson reports that both Catherine Arnold, a Credit Suisse drug industry analyst, and the prescription drug cartel’s own consulting firm, IMS Health, arrived at roughly the same findings independently.
The US House version of healthcare reform inclues US$14 billion in drug spending cuts each year over 10 years, a provision steadfastly opposed by big pharma, with its left hand, under the table. Simultaneously the prescription drug cartel is madly waving it’s right hand in plain view, touting the deal it struck with the White House and Senator Max Baccus (D-Montana). The promise to cut US$8 billion each year by providing rebates to the government and elders.
Big pharma likes to point to the falling prices of generic drugs—roughly nine percent in the last year. But as Wilson reports, non-generic drugs account for fully 78% of all US prescription drug spending.
It’s time for our elected representatives to recognize the entire medical-industrial complex for the greedy bastards they are and to treat them accordingly. The answer for dismantling the prescription drug cartel is simple: a federal drug development program such as that proposed by Fred Moolten.
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