Thursday, February 4, 2016

Big Pharma's Profit Addiction

I just watched Prescription Thugs, by Chris Bell, the same guy who made Bigger, Stronger, Faster.  Basically, as Bell points out, the movie is about Big Pharma’s “addiction to money.”

The same problem in the mortgage markets is going on in the pharmaceutical markets, with Big Pharma addicting people to drugs (in the same way the Big Banks were addicting people to easy loans), and then we blame those people for being addicts.The profits, however, always remain in the pockets of the pusher-man. 

 Like in the movie, The Big Short, the same way that mortgages were being bundled up and sold in “tranches,” despite the fact that no one knew if the assets in a given “tranche” were actually worthy of the triple “A” ratings they were being assigned by the ratings agencies, so to are pharmaceutical companies now selling us drugs for every physical or psychological aliment their marketing departments can concoct, without really knowing what is in the drugs they are selling us to cure it. The only difference is that, in Big Pharma, the corruption may be a great deal worse.

Just watch Fire in the Blood, for example, about how Big Pharma, in order to protect their profit margins, knowingly allowed 12 million people to die in Africa by preventing generic versions of their AIDS medication from being sold there. 

So, in America, how are these corporate drug dealers doing this exactly? Well, it all works pretty much the same way as the financial institutions. First, they proscribe us the pills, and then they structure deals that get Govt to cover the cost for those pills via Madcare or Medcaid or Obamacare or what have you. Then, the insurance companies lobby obscenely, and ultimately succeed at getting the Govt to pay hundreds to thousands of times more for the drug than it took to make the drug in the first place. (Despite the fact the Bayh-Dole Act of 1980 requires that the price reflect the money tax payers spent in funding the R&D of that drug, which is never enforced.)

Also, except for Veterans,  in the US, the Govt is not allowed to renegotiate the price the drug company chooses to charge for the drug, even though Govts in every other industrial nation can.

And worse, when you consider that 84% of global investment into developing those drugs come from Govt and public sectors, that markup then really only pays for two things: pure profit (straight from the pockets of the America Tax Payer, thank you very much!) and marketing, which those same companies spend 20 x more on than actually R&D for new drugs. And most of the money that Big Pharma spends for R&D is invested in either cosmetic type drugs, or to create more of the same drugs they are addicting people to for whatever imaginary disease or psychiatric condition their marketing departments can dream up; as well as the Viagra you'll need because of taking such drugs. 

We saw this same drug addiction problem during the Civil War, by the way, when Union soldiers who were given morphine for their wounds became addicted to the stuff. Since the South had very little access to morphine, they relied mostly on Whiskey,

In this sense, we can simply think of Martin Shkreli, the guy who purchased the antimalarial and anti-parasitic drug, Daraprim, and jacked up the price (just because he could), as basically the Bernie Madoff of Big Pharma. As Robert Reich said, “what Shkreli “did wrong” was being more audacious while “playing the same game many others are playing on Wall Street.”

"And the wheels on the buss go round and round..."

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