Monday, December 15, 2014

The Great Generic Drug Rip-Off

Big Pharma has followed the only avenue left to reap billion-dollar profits: jack up the price of generics.

What happens when rapacious cartels run out of billion-dollar-profit products? They jack up the price of what was previously low-cost. And why are they able to raise prices by 388% to 8,000% at will? Because they can. That's the whole point in having a cartel that is enabled and enforced by the cartel's toadies and apologists in the central state (federal government): price increases can be imposed on the government and the private sector at will.

I was alerted to the extraordinary price increases in widely used generic drugs by Ishabaka (M.D.), who forwarded this fact sheet issued by the office of Senator Bernie Sanders: (Chart is reproduced below)

"Rep. Elijah E. Cummings and Senator Bernard Sanders sent letters to 14 drug manufacturers requesting information about the escalating prices of generic drugs used to treat everything from common medical conditions to life-threatening illnesses. Data was provided by the Healthcare Supply Chain Association (HSCA) on recent purchases by group purchasing organizations (GPOs) of ten generic drugs."

Here are Ishabaka's comments:

"I'd like to focus on the top one - doxycycline. This is a very effective antibiotic for pneumonia, bronchitis, and sexually transmitted diseases (chlamydia and gonorrhea). Throughout my medical career, it has been a cheap generic drug I used all the time. It's cost has gone up from $20 a prescription to over $1,600 a prescription in the last 12 months.

Low-income people used to be able to afford doxycycline, which would stop the spread of these serious, sometimes life-threatening infections. Now they can't, and there is no drug as good as doxycycline available cheaply. I think this is an outrage. Imagine if a generic bottle of aspirin increased in price from $10 a bottle to $800 a bottle in 12 months - Americans would be marching in protest."

DrugUseAverage Market Price Oct. 2013Average Market Price April 2014Average Percentage Increase
Doxycycline Hyclate
(bottle of 500, 100 mg tablets)
antibiotic used to treat a variety of infections$20$1,8498,281%
Albuterol Sulfate
(bottle of 100, 2 mg tablets)
used to treat asthma and other lung conditions$11$4344,014%
(box of 10 0.2 mg/mL, 20 mL vials)
used to prevent irregular heartbeats during surgery$65$1,2772,728%
Divalproex Sodium ER
(bottle of 80, 500 mg tablets ER 24H)
used to prevent migraines and treat certain types of seizures$31$234736%
Pravastatin Sodium
(bottle of 500, 10 mg tablets)
used to treat high cholesterol and to prevent heart disease$27$196573%
Neostigmine Methylsulfate
(box of 10 1:1000 vials)
used in anesthesia to reverse the effects of some muscle relaxants$25$121522%
(bottle of 100, 20-25 mg tablets)
used to treat high blood pressure$34$149420%
(box of 25, 0.2 mg/mL vials)
used to treat heart attacks and irregular heartbeat$916$4,489390%
(50 mg vial)
used to treat congestive heart failure and reduce blood pressure$44$215388%
(single tablet, 250 mcg)
used to treat irregular heartbeats and heart failure$0.11$1.10884%

The murky world of drug pricing is attracting some much-needed attention:

What politicos and the mainstream media cannot dare state openly is obvious: the system of drug development and generic drug pricing/distribution is broken in the U.S., and the core cause is the cartel-like structure of Big Pharma and the rest of the healthcare system.

Though nobody in officialdom or the mainstream media can say this publicly, the reason for these outrageous increases is painfully obvious: As Big Pharma's stable of billion-dollar drugs slip off patent, their profit pipeline is weakening.

The pipeline of potentially billion-dollar-profit drugs (so-called blockbuster drugs) is thin. So Big Pharma has followed the only avenue left to reap billion-dollar profits: jack up the price of generics, and push the government to pay the outrageous increases via Medicare and Medicaid and force the increases on private insurers and providers. If we just roll over and accept 8,000% increases, we deserve the corrupt, rapacious system we have. 

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