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The World’s Most Powerful Drug Cartel is Right Here at Home


The New York Times has an informative article online today. The link is below, but what follows is my take on the information they provide.

Asthma is the leading chronic, correctable medical issues in the US.  It’s also one of the most expensive to control in total dollars spent.

Pulmicort, a steroid inhaler for asthma: $175 in the US.  $20 in the UK.  Illegal to import.

Albuterol, one of the oldest asthma medicines: $100 today in the US. $15 ten years ago.  Re-patented.

Rhinocort Aqua, another asthma medication: $250 in the US.  $7 in Europe.  Illegal to import.

It doesn’t have to be that way.

While the left erroneously blames capitalism, holding up stats such as above as a reason we need to be more like Europe, many on the right say we need to leave our healthcare system alone allowing the market to work.

The reality, however is that competition and free markets in the US prescription drug trade are an illusion and we all know cheap prices are little comfort when you can’t get the drugs you need for weeks or months in the UK.

To put it bluntly, a handful of drug companies work in cahoots with each other, the major insurers and the US government to keep access to quality drugs low and the prices high.

Lobbyists for the major drug companies spent more last year, at $250 million, than any other industry including defense.  Their efforts – along with the acquiescence of Congress – means it remains illegal to import the EXACT SAME drugs as made in the US from foreign manufacturers.  It’s also illegal for Medicaid, Medicare and other government agencies to negotiate for lower prices.  Additionally, the US government issues patents and “re-patents” on the drugs as well as the delivery systems (typically inhalers for asthma) that make it very difficult for generics to be made.  At the same time, the US government, through the FDA, make is almost impossible for new drug companies to enter the market through regulatory barriers to entry, as well as allowing manufacturers to voluntarily require a prescription versus selling a drug over-the-counter.  Why?  Prescription drugs, short of any co-pay, are usually paid for by insurance companies, not the consumer.

So yes, the drug manufacturers know that getting insurers and the government involved allows them to charge higher prices than they otherwise could.  This is outright illegal by the black-letter of the law, and were this any other industry the executives would be hauled off to jail for racketeering and price fixing.

Makes you wonder why the government would allow and participate in this, right?  Well maybe it has something to do with the fact that a drugged population is easier to control.  After all, Americans take more mood-altering prescription drugs than any other nation in the world.

Even the drug companies themselves admit their pricing is not market based.  Juan Carlos Molina, director of external communication for GlaxoSmithKline told the New York Times, “the price of medicines was “closely linked to this country’s model for delivery of care,” which assumes that health insurance will pick up a significant part of the cost.”  In other words, the high prices are based on the non-competitive way we’re buying our drugs, not a true market price.

Meanwhile, prices are not likely to come down anytime soon.  In 2012, generic prices an average of 5.3 percent, beating the national rate of inflation.  Brand-name prices increased by more than 25 percent (at that rate they double in price every 2.8 years).

Again per the New York Times, medical spending is, “expected to rise sharply as … millions of Americans become insured under the Affordable Care Act, said Murray Aitken, the executive director of IMS Health, a leading tracker of pharmaceutical trends.”  Quite the quote to be included by the usually liberal New York Times.

So, here we are.  The radical left is calling for socialized medicine.  The establishment right is saying let the market work as it has.  And now we’re being made to purchase health insurance in an effort to correct the situation.

But who put us where we are today?  Drug companies, insurers and the US government.

And who wrote the Obamacare law?  Drug companies, insurers and the US government.

The left has it wrong.  The right has it wrong.

What we need are free markets that destroy crony-capitalism, racketeering and price fixing, and force the market to provide the best drugs at the lowest prices.  Indictments would be nice too.


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