Follow the Pharma Money

May 16th, 2018 by Nick Jacobs Leave a reply »

President Trump indicated at his press conference on the pharmaceutical industry that a “tangled web of special interests” has conspired to keep drug prices high at the expense of American consumers.

Today I received an email reflecting the latest information about pharmacy costs for emergency rooms in the United States. The information was collected by IBM Watson’s Health Redbook which contains product information on more than 200,000 prescription and non-prescription drugs plus 8 of the 10 most frequently used emergency department drugs.

As a former hospital CEO, one of my most challenging aspects of budget season was predicting drug costs for the following year. Well, as most of us in the business know and Watson confirmed, within the past ten years, emergency department drugs have seen price increases of 50 percent or more.

Because I am neither a physician nor a pharmacist, many of these drugs mean little or nothing to me in terms of use or frequency of use, but as you will see, some of the more recognizable ones that are the most often used have had significant increases. Here’s just a few of them.

Ketoralac: 153 percent price increase (oral)

Morphine: 77 percent increase (injectable)

Albuterol: 69 percent increase

Hydromorphone: 81 percent increase (injectable)

Acetaminophen/Oxycodone: 90 percent increase

Lidocaine: 59 percent increase

Besides these drugs, another significant change has occurred that impacts thousands of patients annually. Depending on the manufacturer and quantity ordered, intravenous sodium chloride has increased in price by a whopping 162 to 328 percent.

What’s happening?

The pharmaceutical industry is a for-profit participant in what can only be described as the medical-industrial complex, and when you query them, they indicate that they have increased costs in producing their drugs, hence their higher costs to us, but their recent profits have been excellent.

I am also not an expert in the healthcare supply chain, but when it comes to things like IVs of saline solution increasing exponentially in cost, my head says, “Follow the money.” And following the money usually leads to lobbyists and politicians.

We know that drug companies have made billions of dollars by literally pushing opioids on our population. We consume 80 percent or more of the world’s production of these addictive pain meds. We also know that some of the most prominent supply chain companies were complicit in the illegal distribution of these drugs and were given only a financial slap on the wrist by our government for their involvement.

The current system of getting a new drug to market costs about a billion dollars, and the citizens of the United States are covering much of those research and development costs by paying more for drugs than any other country in the world. Is it a coincidence that the United States allows direct-to- consumer advertising for pharmaceuticals?

Follow the money.

In a private meeting, a top scientist from one of the pharmaceutical companies said to me, “You don’t understand the drug industry in the United States. We’re like the movie industry. We only want the blockbusters, a pill you have to take from age 5 until death that never makes you better.”

The big hammer the United States possess that could control these prices is the purchasing power of the federal government, something President Trump promised to enforce during his campaign. The U.S. government buys more drugs than any other entity in the world, but the President’s pharmacy speech touched on about 50 alternatives to that idea. He never came close to offering to bring that federal clout to the table.

In the EU, drug manufacturers are not permitted to set their own prices.

As securities analyst Ronny Gal, from Sanford C. Bernstein & Company said, “The President’s speech was very, very positive to pharma.” And he added, “We have not seen anything about that speech which should concern investors” in the pharmaceutical industry.

Follow the money.

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