Extortion by any Other Name

       With all the continued bullshit  being flung from the Far Right regarding the "expense" of national (single payer) healthcare, here is a sobering statistic: It costs the USA a larger percentage of GDP for the polyglot partial coverage system (we still have millions uninsured) we now have than the UK pays to cover the entire nation. In the UK last year, the total (public and private spending) cost of universal healthcare was 9.9% of GDP. In the USA, that figure was 16.6%. again this is total expenditure, which includes those in the UK who buy supplemental "Cadillac" private insurance plans (far cheaper than the average US coverage, by the way) or have some limited drug copays.

       Isolating just the Government (taxation) borne portion of those figures, it works out to: The British government spends 7.8% of GDP to insure an entire nation, while those citizens who elect to pay for some additional "frills" or have minimal drug copays, pay about an additional 2% of the total. Note that we're talking here about far cheaper drug costs, free cancer medications, etc. The US Government currently spends 8.4% to provide just what limited (Medicare. Medicaid, ACA supplemental premium cost shares) coverage we now have. The American public, via insurers, drug company extortion, grossly overpaid high end doctors, etc, will also spend more than that out of their own pockets.

        In summary, we do less with more, but we trumpet to ourselves how wonderful our system is, while furthering the lies regarding single payer costs. Along the way we always have markedly lower consumer satisfaction than most OECD nations.

       Why? Well, Alice, once upon a time, Pharma companies justified high prices by citing R & D costs. Currently, every major US drug company spends significantly more on advertising and lobbying than on research, and in fact, many new drugs are developed on the Government's dime, the patents bought by private companies and the profits reaped by them.  

        Consider Harvoni, a 90% plus hepatitis  C curative: Developed at Emory University by a University researcher with an NIH grant, under current law said professor was allowed to patent it, did so, and sold it to Gilead Pharmaceuticals  for $400 million. Your cost in the US? around $40,000 if insurance will cover it. Same drug in India? $900. In the US, however, Medicare/Medicaid pays the full $94,000 price tag, thanks to a 2006 law prohibiting Medicare/Medicaid from negotiating lower drug prices while private  insurance companies can, and do.  

        In like manner, consider  Taxol: The federal government spent $484 million developing the cancer drug Taxol — derived from the bark of Pacific yew trees — much of the work being done by  university researchers  and it was marketed under an agreement with Bristol-Myers Squibb starting in 1993. The medical community has hailed it as "promising new drug in the fight against ovarian and breast cancer." (it has proven to be just that)

        Since then, Bristol-Myers Squibb has sold $9 billion worth of Taxol worldwide, according the General Accounting Office report released today. The National Institutes of Health have received just $35 million in royalties from Bristol-Myers, however. Bristol did not discover the drug. The federal government did — with taxpayer dollars — and then negotiated a licensing agreement with the pharmaceutical giant. For the math challenged, that amounts to a .3% return on investment, but in fairness, unlike Harvoni, which is relatively inexpensive to produce, Taxol is actually a labor intensive drug to produce. All this of course, begs the question of when should price determine who lives and who dies? 

        So, taxpayers footed a very large part of the original bill and now those who use Taxol are paying a second time. The Medicare program alone paid nearly $700 million over a five-year period, to buy a drug the government helped develop. Meanwhile, as Medicare/Medicaid pay the asking price, the actual compound Paclitaxel, can be found, where national  health services negotiate price, for about 10% of that figure.

      The extortion referred to in the title of this post refers to the heinous Big Pharma (US) practice of slamming the most vulnerable of us (those with Hep C, Cancers of all sorts, MS, etc) with abusive price structures, knowing that the desire to be cured will, in most cases, outweigh the outrage such pricing merits. 

     What many don't know is that their insurer has already negotiated a far lower cost figure, leaving those on Medicare to pay a cost share of the full asking price. This is the result of Bush 43's desire to create a Medicare Drug plan legacy (part D) which was an honorable intent. The devil, however was in the details, and those details were represented by the (literally) billions spent by lobbyists to make damned sure that Uncle Sam would pay full asking price. Consequently, we are where we are today.

       Any Epi-pen user on almost any insurance plan can get, either with their insurers' lower negotiated price or even more bizarre, with a half price coupon actually issued by the manufacturer, a two pack at a much lower price than the recently elevated $600.  Meanwhile, while the Veteran's Administration, unbound by the part D law, gets them for $150, Medicare/Medicaid are mandated to pay the full $600 list price, no questions asked. 

          Angry yet? You should be.