Business Is Good

Nothing to see here:

Even as drug makers promise to support Washington’s health care overhaul by shaving $8 billion a year off the nation’s drug costs after the legislation takes effect, the industry has been raising its prices at the fastest rate in years.

In the last year, the industry has raised the wholesale prices of brand-name prescription drugs by about 9 percent, according to industry analysts. That will add more than $10 billion to the nation’s drug bill, which is on track to exceed $300 billion this year. By at least one analysis, it is the highest annual rate of inflation for drug prices since 1992.

The drug trend is distinctly at odds with the direction of the Consumer Price Index, which has fallen by 1.3 percent in the last year.

Drug makers say they have valid business reasons for the price increases. Critics say the industry is trying to establish a higher price base before Congress passes legislation that tries to curb drug spending in coming years.

The Prescription Drug Plan really was fiscal conservatism at its best.

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37 replies
  1. 1
    arguingwithsignposts says:

    Drug makers say they have valid business reasons for the price increases.

    FYIGM.

    I find it seriously disturbing that these grifters (and the health insurance grifters) raise prices when the rest of the economy is in the shitter. Not surprising, just disturbing.

  2. 2
    El Cid says:

    Critics say the industry is trying to establish a higher price base before Congress passes legislation that tries to curb drug spending in coming years.

    Yeah. Sure. Simple working of the free market, right? Supply and demand, right?

    You get to charge more money now for a product that people have to have or they die, because in the future, your rate of profit might be somewhat reduced.

    This is clearly the Best of All Possible Worlds, except that what would really help are less regulations, less active regulators, and of course upper class tax cuts.

  3. 3
    Persia says:

    @arguingwithsignposts: They do have a legitimate reason! They’re afraid health care reform will pass and the free-flowing spigot might dry up.

  4. 4
    WyldPiratd says:

    But, John, we have more important things to talk about than Big Pharma and health insurance industry ass-fucking the US.

    My FSM, man, Sarah Palin has book out! Get with the program.

  5. 5
    dmsilev says:

    So, they jack up prices and then will lower them back down (but not all the back down of course) while loudly proclaiming what good people they are?

    -dms

  6. 6
    ItAintEazy says:

    ACORN!!11one

  7. 7
    Brian J says:

    This doesn’t surprise me, since this is probably the most direct way to maintain profit margins. But now that we’ve seen what they are willing to do, shouldn’t we push to let Medicare negotiate drug prices? Shouldn’t we take on the pharmaceutical lobby head on and push to remove their patents, or drastically reduce them, and spur innovation in some alternative way, like a prize system and government funded research?

    You know, as more and more information comes out about the twists and turns of the health care reform debate, it seems like we never talk about anyone involved in health care receiving less money. Has anyone major talked about doctors making a little less money? I don’t remember that being the case.

    From what I’ve seen, it’s not the biggest contributor to health care costs, at least by itself, but it certainly seems to be at the center of pretty much every single problem, especially when it comes to spending too much money on procedures and tests. Yet just as it seems we’d rather let our economy be at the whim of arrogant assholes on Wall Street, it seems like we’d rather go bankrupt as a nation rather than talk on the medical industry. I try not to be a hotheaded person when it comes to politics, but I’m getting ready to buy a new pitchfork.

  8. 8
    General Winfield Stuck says:

    The Prescription Drug Plan really was fiscal conservatism at its best.

    Absolutely. It conserved tax dollars for redistribution to corporate bank accounts. That was the plan. That is always the plan. Act 2 was to jack up the national deficit, so when lieberals try to pass their namby pamby commie soshulist stuff to help average peeps, then the wingnuts can clamor about bankrupting the country. Act 3 is forming mobs to scream bloody fucking murder and burn effigies of Nancy Pelosi . And generally drive us all insane with stoopidity.

  9. 9
    Brian J says:

    @General Winfield Stuck:

    You know what is so great about the Republican hatred of Nancy Pelosi? Nobody who isn’t already a hardcore conservative gives a shit, primarily because nobody really knows who she is. They tried–and still try–to vilify her like they did Hillary Clinton, and yet despite Pelosi’s national profile, she isn’t on the same level as Clinton, so they continue to fail.

  10. 10
    Keith G says:

    Our experiment with capitalism is about 240 yrs old. Its premised on the notion that acquisitive individuals and groups will compete like hell to assert their self interest and that the society, as a whole, will benefit from the process.

    This wasn’t a bad idea when it was the case that:

    1) expectations of what was the general welfare were quite low

    2) individuals were not too removed from the means of sustenance

    Now that the self-interested can build economic fences around the means for survival and charge profit maximizing fees under the protection of the state (two hundred yrs ago such price gouging might have led to tar and feathers), our form of capitalism is becoming a bad idea.

    What amazes me is that the trailer park teabagger are so confused about where their interests lie and that so many others know what is going on yet remain on the sidelines.

  11. 11
    MattF says:

    It’s the Magic! Of! The! Marketplace!!! It’s just too bad that the concept of people buying stocks with their Social Security accounts went nowhere. Everybody knows that everybody profits when our friends and neighbors who run multinational corporations make enormous amounts of money.

  12. 12
    MattF says:

    There were supposed to be three exclamation points in a row after ‘Marketplace’ in the previous post. But the HTML gods decided otherwise.

  13. 13
    Comrade Dread says:

    New PoliSci definitions:

    ‘Free market capitalism’ is now the theory that companies should loot faster before the cops show up and stop them.

    ‘Soc i* lism’ is any system of government where someone passes any kind of minor impediment to the looting.

    ‘Communism’ is the system of government when people arm themselves and shoot the looters before appointing new looters to continue their work under new management.

  14. 14

    @El Cid:

    This is clearly the Best of All Possible Worlds, except that what would really help are less regulations, less active regulators, and of course upper class tax cuts.

    This really is the only solution, but I would add that it is also necessary for each of us to carry a concealed firearm in case Pelosi and Obama send the Feds to grab our guns and send our children to their “public schools” for more indoctrination. You can’t be too careful these days.

  15. 15
    Comrade Dread says:

    @Keith G

    I think our experiment with capitalism hit a speed bump once corporations figured out it was relatively cost effective to buy a few legislators in return for friendly regulation and laws.

    We hit a pot hole once our legislators sold out like cheap whores.

    We hit a wall once the old school corporatists (who defined rational self-interest as ‘doing what’s best for the company) died off or retired and were replaced by slimy douchebag corporatists who defined rational self-interest as ‘making as much money for myself as I can and company, country, and everyone else be damned.’

  16. 16
    Mr Furious says:

    I’m in awe of the math:

    Promised reduction: $8 Billion
    Preemptive price increase: $10 Billion (or more)
    —————–
    Net additional profit: $2 Billion

  17. 17
    lol says:

    Whatever deal that was made, it didn’t give away anything that can’t be taken back later. The entire point was to keep Pharma on the sidelines until it was too late.

    Mission accomplished.

  18. 18
    JackieBinAZ says:

    The credit card industry is doing the same thing, raising rates before consumer protections go into effect – and this after lobbying hard to water down those protections. It’s almost like they’re trying to make a point to the masses that they’re better off not agitating for reform.

  19. 19
    Keith G says:

    @Comrade Dread: What amazes me is not that there is advocacy (a good thing), but that players like Koch or Pfizer can not only convince folks to argue for policies at odds with their personal self interest, but that these corporations are able to get tax deductions funding the protests for policies that will increase their profits – at the expense of…well…everyone else.

    My head hurts.

  20. 20
    R-Jud says:

    @JackieBinAZ:

    It’s almost like they’re trying to make a point to the masses that they’re better off not agitating for reform.

    Yep, on both counts, it’s a big industry-wide tantrum: “fuck you for not letting us have our way, valued customers!”

  21. 21
    pcbedamned says:

    I am more glad every day to be Canadian.
    ‘Nuff said.

  22. 22
    arguingwithsignposts says:

    Ken Johnson, senior vice president of the industry association — the Pharmaceutical Research and Manufacturers of America — criticized the analysis Professor Schondelmeyer had conducted for AARP, saying it was politically motivated.

    A Pharma lobbyist saying someone else is politically motivated? That’s rich. I couldn’t even finish the article I was so pissed.

  23. 23
    Nadia says:

    Whenever available, I use a generic alternative as opposed to a brand name drug. There is a website called ‘Medtipster’ that makes finding low-cost generics from reputable pharmacies in your area easy. All you have to do is type in the medication you need, the dosage and your zip code and Medtipster will direct you to the least expensive retailer. It’s a great money-saving tool…google search “Medtipster” and have a look.

  24. 24
    The Saff says:

    But drug companies say they are having to raise prices to maintain the profits necessary to invest in research and development of new drugs as the patents on many of their most popular drugs are set to expire over the next few years.

    If this is true, why doesn’t the drug industry stop advertising non-stop on the evening news to save a little money? I’m not sure what the actual ratio is but it seems that during a half hour of “NBC Nightly News,” two-thirds of the ads are for some prescription drug.

  25. 25
    Steeplejack says:

    @The Saff:

    And–no links yet, but I’m looking–I seem to remember reading somewhere that the big pharma companies’ marketing budgets are uniformly larger than their R&D budgets.

  26. 26
    Steeplejack says:

    @Steeplejack:

    Science Daily, January 7, 2008:

    A new study by two York University researchers estimates the U.S. pharmaceutical industry spends almost twice as much on promotion as it does on research and development, contrary to the industry’s claim.
    __
    The researchers’ estimate is based on the systematic collection of data directly from the industry and doctors during 2004, which shows the U.S. pharmaceutical industry spent 24.4% of the sales dollar on promotion, versus 13.4% for research and development, as a percentage of U.S. domestic sales of $235.4 billion.
    __
    [. . .]
    __
    The researchers used 2004 as the comparison year because it was the latest year in which information was available [from IMS and CAM].
    __
    [. . .]
    __
    “Even our revised promotion figure for 2004 is apt to be understated, as there are other promotion avenues that are not likely to be taken into consideration by IMS or CAM, such as ghost-writing and off-label promotion,” says Gagnon. “Also, seeding trials, which are designed to promote the prescription of new drugs, may be allocated to other budget categories.”
    __
    IMS and CAM data were used for comparison purposes because data from both are publicly available, both operate globally and are well regarded by the pharmaceutical industry, and both break down their information by different promotion categories. Most importantly, the two organizations use different methods for gathering their data, allowing the researchers to triangulate on a more accurate figure for each promotion category.
    __
    The authors focused their study on the United States because it is the only country in which information is available for all of the major promotion categories, and it is also the largest market for pharmaceuticals in the world, representing approximately 43% of global sales and global promotion expenditures.

  27. 27
    Glidwrith says:

    @Steeplejack: I’ve seen this too and I’ll tell you something even worse: once a pharma has a few drugs lined up, they get rid of all of the R&D guys that got them there, claiming they need to conserve costs for clinical trials.

  28. 28
    Calouste says:

    @Steeplejack:

    In all those soc!alist European countries where health care costs about half of the US, advertizing drugs to the general public is not allowed, except for over-the-counter drugs like painkillers, cough medicine and muscle rub. Must be a coincidence.

  29. 29
    Cerberus says:

    Big Pharma does R&D, pull the other one, it’s got bells on.

    It’s pretty much an open secret on the research side that the big drug companies don’t produce in house any of their drugs. What they don’t buy off the universities who do tax-payer funded pubic research, they get by buying biotech companies that create successful drugs. Hell, that’s how the entire biotech industry is structured these days. You work at a firm for about a year or three. If you develop a marketable drug, the company is sold off to a drug giant and it becomes “one of their drugs”. If you are not, the company declares bankruptcy and you find another firm to work with. The private sector is incredibly volatile because it’s all based on being absorbed by the big drug companies or failing.

    So yeah, research, mm hm. On a sadder note, it’s appalling how many industries exist that are strictly there to parasitize the hard work of others. Wall Street, insurance companies, big drug companies, big box stores. It can’t be sustainable to have this much of our GDP going to entities that don’t actually do anything other than make life worse for everyone else.

  30. 30
    RandyH says:

    I saw a news segment somewhere recently and they noted that Viagra had been out for about 10 years now and that over those 10 years, the wholesale price of Viagra has more than doubled.

    It really isn’t supposed to work that way. The price should ideally go down after a drug has proven itself to be relatively safe and effective and more people start using it. Isn’t there an existing agency in the government that actually enforces things like anti-trust and racketeering laws?

    Crickets.

  31. 31
    binzinerator says:

    Maybe OT:

    Are some of these the same manufacturers who were paid millions make and deliver the H1N1 vaccine, the shortages of which now require rationing here in WI to the most at-risk young children and pregnant women?

    The H1N1 vaccine was available in April — a cousin of mine who lives in Illinois got herself and her kids vaccinated at her doctor’s office then. (She just confirmed with her doctor that the H1N1 vaccination she and her kids got in April will still work –the virus, surprisingly, hasn’t mutated enough yet.)

    So back in April the manufacturers had the knowledge of what it takes to produce the H1N1 vaccine and would have known of the necessity of longer production time.

    Now they have produced only 1/2 to a 1/3 the amount they said they would be able to deliver by November. They claim they had no idea it would take longer to manufacture than the seasonal variety.

    Whocoodanode!

    Of course without missing a beat the Fox News teabaggers are ranting online about how this highlights the failures of socia-lized medicine and is proof obamacare will doom us all.

  32. 32
    trollhattan says:

    Shame on the Obama administration and Nancy Pelosi for forcing the plucky little pharmaceutical companies to raise their prices against their wills. Does their quest to destroy America have no limits?

  33. 33
    Ruckus says:

    @Comrade Dread:
    Nice little parable for our times.

  34. 34
    binzinerator says:

    @binzinerator:

    What blows my mind is just how big a bullet we appear to be dodging. And what a colossal wake-up call this is (no,not a call, a fog horn blast sent thru a bullhorn).

    What if this H1N1 strain was as deadly as it was in 1918?

    The 1918 strain of H1N1 had a mortality rate of 2.5%. I think our society would freak had such an event occurred today (with Fox News fueling the hysteria, of course, but only if the pres were a Dem. Otherwise it would be un-patriotic and hating America to question the president.)

    The 1918 bug came and had killed most of those who were to die by the end of October. If we were facing the same strain of H1N1, we’d still be waiting for vaccine.

    (An argument can be made that we might have seen a 2.5% mortality for our strain of H1N1 if we had the same level of medical knowledge and the same kinds of drugs available as in 1918. Most 1918 pandemic deaths were from pneumonia as side effects of the flu, not from the bug itself.)

    Schools have been closing here (for a few days at a time) because most of the kids were out sick with influenza. Can you imagine what would be going on socially and politically in this country if 2.5% of those kids died?

    And Jebus help us if this had been H5N1, which has a mortality rate of 60%. And that is with modern medicine.

    We seem to be no better prepared now to protect ourselves from deadly pandemics than in 2003, when everyone freaked about SARS.

    The explanations for the H1N1 vaccine shortages have varied (Shortage? What shortage? No, wait, it’s because of outdated equipment. No its because gubmint regulates us and red tape slows it all down. No, it’s because incubating the virus takes longer than normal. No, we actually told the government the truth about realistic production targets and it is they who lied to you).

    Any thing with drug manufacturers involved is reason enough to expect lies, especially they considering they are not happy about government efforts at health care reform.

  35. 35
    binzinerator says:

    Hmm. Looks like my comment to myself disappeared into the bowels of Word Press.

    Perhaps it will be shat out later today.

  36. 36
    Will says:

    If this is true, why doesn’t the drug industry stop advertising non-stop on the evening news to save a little money? I’m not sure what the actual ratio is but it seems that during a half hour of “NBC Nightly News,” two-thirds of the ads are for some prescription drug.

    The cynical among us might say that this is the main reason that the mainstream media is so hostile to health care reform. They know where their paychecks are coming from.

  37. 37
    AhabTRuler says:

    I’ve only heard that the incubation period took longer than expected, and, as someone here pointed out, it doesn’t help to yell at the eggs.

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