Another drug company has joined the likes of the recently exposed Turing Pharmaceuticals by jacking up prices of life-sustaining meds on extremely short notice. Remember this name: Valeant Pharmaceuticals International.
Also worth a specific name-check is Valeant’s chairman and CEO, J. Michael Pearson. He’s a billionaire. Now take a look at what his company has been up to lately, as reported Sunday by The New York Times:
J. Michael Pearson has become a billionaire from his tough tactics as the head of the fast-growing Valeant Pharmaceuticals International.
And consumers like Bruce Mannes, a 68-year-old retired carpenter from Grandville, Mich., are facing the consequences.
Mr. Mannes has been taking the same drug, Cuprimine, for 55 years to treat Wilson disease, an inherited disorder that can cause severe liver and nerve damage. This summer, Valeant more than quadrupled its price overnight.
Medicare will now have to cover about $35,000 for the 120 capsules he takes each month, and Mr. Mannes will have to pay about $1,800 a month out of pocket, compared with about $366 he paid in May.
[…] Cuprimine is just one of many Valeant drugs whose prices have spiked as part of the company’s concerted strategy, which has richly rewarded its investors and made it one of Wall Street’s most popular health stocks.
Big Pharma knows better than to jack up costs to make nigher profits. They knw that they can get away with “medical inflationary” rates of 10% or so.
Because they know that their business model is dependent on government-granted monopolies based on government-funded research. The government that gives them the monopolies could decide to take them away if provoked by outraged people.
But new, smaller companies run by sociopathic CEOs seems about to destroy the goose that laid the Golden Egg. They want to make a quick bilion gaming the system.
Because, in truth, healthcare does not really work well in a free market system.
I have written about this several years ago. One company raised the price of a hundred year old drug, colchicine, from pennies a pill to $6 and got all other versions of this natural product removed from the market.
How about the progesterone injection to prevent pre-term labor? It went from $10 a shot to $1500, even though all the clinical trials had been done by the government?
Even generics are being hit because there is so little competition.
As I wrote then:
In a free market, commodities get priced pretty fairly especially since there are alternatives. But drugs offer none of this efficiency, allowing the corporation to charge huge amounts for something it did a small amount to develop.
When it comes to our health, there really is little choice and the profit-motive means that we will have to pay outlandish prices with huge markups on things that were mostly developed by tax-payer money to begin with.
Turning a person’s life into a commodity and then using monopoly positions to extort huge amounts of profits will not be sustainable. Life-saving drugs that cost over $100,000 simply cannot continue to be expected. Especially when producing the drug costs several orders of magnitude less.
I expect we will see that the inability of these companies to seek reasonable recompense for their efforts will have consequences.
Consequences they will not be happy with.
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