- During the State of the Union on Tuesday night, President Trump said his administration is “taking on the big pharmaceutical companies.
- Democrats quickly responded by getting to their feet, holding up three fingers, and chanting, “H.R. 3! H.R. 3!” H.R. 3 is the Elijah E. Cummings Lower Drug Costs Now Act.
- The measure requires Medicare to negotiate for lower prices on insulin and other life-saving medicines and was passed by the House in December. Now, the bill is sitting in the Senate
Healthcare is in disarray. Visits to primary care providers made by adults under the age of 65 had dropped by nearly 25% from 2008 to 2016. What’s more, adults who went at least a year without a single visit to a primary care provider increased from about 38% to 46% in that period
The U.S. spends more on health care as a share of the economy — nearly twice as much as the average OECD country — yet has the lowest life expectancy and highest suicide rates among the 11 nations. In addition, the U.S. has the highest chronic disease burden and an obesity rate that is two times higher than the OECD average.
The pharma industry’s claims that high prices are vital to fund innovation are demonstrably false, according to economists who research how drug companies allocate money. The truth is that many of these companies use profits reaped from their exorbitant prices to wheel and deal with Wall Street instead of developing new and more effective medicines.
Pharmaceutical companies, economist William Lazonick, and his colleagues show, have increasingly focused on manipulating their stock prices over the last few decades in order to line the pockets of executives, hedge-fund managers, and bankers. The researchers reveal that some of the biggest drug companies often take on debt to distribute well in excess of 100 percent of profits to shareholders in the form of stock buybacks and cash dividends.
What does all this mean?
People are tired of high healthcare costs and even though prescription drugs only account for ten percent of every healthcare dollar spent big pharma is an easy target for the rage of voters.
There is absolutely NO reason why the federal government should not be negotiating drug prices with pharma. It’s coming and all the bribery, I mean lobbying money, is not going to stop it.
The drug industry lobbying group PhRMA registered $460 million of revenue in 2018, a shade more than 2017, according to its latest tax returns obtained by the Center for Responsive Politics.
What has pharma done to prepare? Nothing. Companies are still a bloated mess of inefficiencies while CEOs rake in tens of millions in compensation.
Is it fair? No, it’s not. Americans continue to be the most obese in the world which in turn is leading to more chronic diseases. Smart pharma companies are already preparing for the worst, dumb ones are spending more lobbying.