How About Paying Us Back?

Drug companies have been raising their prices in anticipation of a government health reform program which may try to rein in uncontrolled drug price rises the companies have grown used to pocketing over the years.  So, what’s new?

As reported in the NY Times, the wholesale price of drugs has gone up about 9% in the last year while the Consumer Price Index fell by about 1.3% during the same period.  The drug industry claims the prices have risen at this rate, a rate unprecedented for the last
15 years, for good and valid business reasons.  Realists say the industry is preparing for health reform, one of the cornerstones of which is trying to curb drug spending.

Whichever it is, the consumer gets caught in the middle again.  While the drug industry trumpets its agreement to cooperate in lowering the nation’s drug bill by $8 billion a year in support of national health reform, it has already increased the nation’s health bill by more than $8 billion even before the health legislation gets its legs under it.

The excuse they use is the old saw that they have to charge more to generate monies for research and development of new products.  Drug manufacturers have been using this excuse for raising prices for decades although the real reason is to keep their shareholders happy..  But, nobody seems to give a darn about the end user, the person who desperately needs the drug to stay alive or functional. Whether or not these afflicted people can afford the price, they have to find some way to pay. 

Speaking of new product research and development, how about the billions and billions taxpayers spend on basic research at universities which lead to the development of many of these drugs and medications?  Why doesn’t the taxpayer get a cut of the profits just as shareholders do?  Why does all of the good stuff (profits) go to the company owners, while the taxpayer whose funds started the research and development, gets zilch?

It’s amazing how the drug companies, among others, have no argument with the government (taxpayers) putting money into basic research which leads to discovery, but object to government (taxpayers) sharing in the fruits of discovery. 

Businesses in public transportation are held to a higher standard of care in their business because of their obvious obligation to see to the safety of the public.  Why aren’t drug manufacturers which get a patent (and a monopoly) on a critical medication also held to a higher standard when it comes to pricing these vital drugs?  These drugs also are an integral part of public safety for our most disadvantaged population – the elderly, the sick and the injured.

Not only that, the drug companies use the same “research and development” ploy to do away with the competition they claim to love.  They get government agencies, which are huge buyers of their product, to tie their hands when it comes time to negotiate pricing, thereby bloating Medicare and other budgets, while fattening profits for “research and development”.  And, who ultimately pays?  Us, the taxpayer.

It’s time to stop blithely accepting the “research and development” excuse for allowing drug companies to price vital medications at whatever they choose.  “Research and development” should be thoroughly researched to determine a valid percentage of cost which makes sense for the drug companies as well as consumers.  Then that percentage should be used in pricing a new drug so that consumers are not swamped by what drug companies decide they need for “research and development”.

Once that percentage is established, drug companies should not be allowed to price above what that percentage calls for.  No more nebulous “trust us to be fair” leeway for drug companies to price at whatever they see fit while holding a monopoly on a patented drug.

If Congress and the drug companies won’t go for that, then give the taxpayer a “research and development” percentage for all of the tax monies used to develop that drug.

But, don’t add it to the price.  Just take it out of profits, for a change