Putting drug prices in the spotlight misses the big picture

  • Despite the media’s attention to high drug prices our national healthcare costs are going to continue to climb rapidly.
  • Spending on ambulatory care, which includes ER and outpatient hospital services, also played a role in increased overall costs. Annual spending on ambulatory care swelled from $381.5 billion in 1996 to $706.4 billion in 2013. This increase, about $324 billion, was higher than any of the other five types of care analyzed.
  • A survey revealed that only 20.6 percent of people met the total recommended amounts of exercise — about 23 percent of all surveyed men and 18 percent of surveyed women.
  • Medical costs linked to obesity were estimated to be $147 billion in 2008. Annual medical costs for people who were obese were $1,429 higher than those for people of normal weight in 2006.

OK, so we have made big pharma the villain of high health care prices, but the reality is very different.  Rising health care costs are due to a number of factors, including our unhealthy lifestyles, rising prices of ambulatory care, and the high cost of administrative paperwork that our health care system requires.

But what about pharma?

Well, first we need to come to the reality that most pharma CEO’s first customers is Wall Street and shareholders .  This is why so many health care CEO’s have a finance background rather than a science background.   Much to your surprise there are some very good, hard working people within the pharma industry who want to help patients, but like any industry their voices are often muted by career employees who only desire is that paycheck and job title.

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Now for another sobering reality check. Even if all prescription drugs were free our health care costs would still be going through the roof. Why?  Because we just have come too accustomed to taking a pill instead of eating right and exercising.  Of course, some will say that “big pharma sold us these solutions” but again that’s not true. Too many doctors treat the condition rather than the patient and we’re working too many hours to come home and make a healthy dinner or go to the gym.  Even a lot of cancer cases are preventable..

  • In a study published in CA: A Cancer Journal for Clinicians, researchers led by Dr. Farhad Islami at the American Cancer Society analyzed national cancer data and calculated how much of cancer cases and deaths can be attributed to factors that people can change. These included smoking, exposure to second-hand smoke, being overweight or obese, drinking too much alcohol, eating red and processed meats, eating too few fruits and vegetables, not exercising, exposure to ultraviolet radiation through activities like tanning and six cancer-related infections (including HPV).
  • Among more than 1.5 million cancers in 2014, 42% were traced to these factors, as well as 45% of deaths in that year.

Then there are the costs of going to the hospital.  While your insurer often negotiates the price of your stay what they agree to pay determines your co-pay.  It’s also not uncommon for someone to go to the ER and get a huge bill because a doctor, he/she saw did not accept his insurance.  Hospitals can also charge what they want for daily medications like Tylennol or Ibuprofen.

Then there are administrative costs. Administrative costs accounted for 25 percent—or more than $200 billion—of total hospital spending in the United States.  In the other nations included in this study, these costs accounted for between 12 percent of spending.

Like any argument there are always two sides to any debate.  The media is following ratings by making pharma the villain and while too many drugs are too damn expensive the story we should be looking at its total health care costs, not just prescription drugs.

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