Wednesday, October 12, 2011

Big Pharma delivering too little



The healthcare cost is increasing at an alarming rate. It is unsustainable as prices increased 3 times the inflation rate year after year. The reasons lie in the laws and regulation enacted and accumulated thru the years.

Reducing the cost of healthcare is so important to  keep Medicare alive for generations to come. There is a need to tie the healthcare prices to the economical activities once and for all.

Many of our laws, open market, allow the Pharmaceutical Companies to price their medications in the United States twice or more the prices of Canada, England, and ten times of China, India, etc.
The patent laws protect the pharmaceutical companies from the generics competition for the duration of the patent.

Same medications with an additional patent time protection are always attempted by the Pharmaceutical companies.  Many techniques are used to extend the patent time such as change the delivery system of medication or create a combination with another medication to form new entity which is really not new.

Big Pharma focus on placing their patent protected items in the hospital pharmacy formulary and expel the generic, a cheaper alternative, of the formulary. The patients is discharged from the hospitals with a prescription of high cost brand name items. Since the hospitals rely heavily on Medicare and Medicaid, one can conclude that the focus is on this direction.

The law also allowed “Pay to Delay delaying the generics from coming to the market and continue with the high prices of the brand name for an additional period.

Orchestrated efforts by the pharmaceutical companies to keep their brand name medication, with its highest cost, in the eye of the public for as long as they can. As “Lipitor” patent to run-out soon, a study was conducted aimed to proof that “Crestor” is more superior to Lipitor. This is timed to move the market from Lipitor brand to Crestor brand instead of Lipitor’s generics. The cost reduction from brand to generics is from $2000/year to $300/year, or billions of Dollars. Please note that the study is timed for now not earlier.

The FDA protects the public health regarding medications available in the market and any new medication coming to the market.  With this authority, many medications have come to the market approved for that purpose. But  years later, The FDA come back to withdrew part of the approval for the medication use, or place a black Box  warning on the use of the medication which render it non profitable.  After many years of use and tens of billions of dollars of profit, the medication is withdrawn or used rarely. However there were no consequences to this action to the pharmaceutical companies and those who carried the trials and profited greatly of the medication.  

Classification of the medications is also left to the Pharmaceutical companies and its interest by placing their medications in the RX Class or the OTC class. The RX class medications have 12 folds the prices of the OTC. The RX class also includes the cost of obtaining the prescription, Doctor’s visit, Insurance coverage, Co-Pay, etc. which is additional 5 folds of the prescriptions’ cost. In another word, the possibilities for revenue are in the RX class not in the OTC.

Advertisements by the pharmaceutical companies give the false hope to the patients who in turn asked their physicians to write a prescription for the items seen on television. As you watch the end of the advertisement, it indicates to the professional, not the regular populous, how serious this medication is and the danger associated with it. Death, Behavioral changes, Suicidal thoughts, High Blood Glucose, Low White Blood cells count, and other serious consequences are listed in this advertisement. Patients see the first part of the advertisement only due to the hope for cure.

Promotional techniques are used extensively by the pharmaceutical companies to market their medication through the Physicians’ offices, with samples, lunches, gifts, etc. in order to start the patient on their items and soon they have to buy the higher cost brand name medication. A $300 Lunch provided to healthcare professional capture the full hour of 30 individuals for what they want o tell about their medication.


Pharmaceutical Companies’ sales forces visit hospitals twice a day to promote their medication to the max, lunches, dinners, and continue education by representatives of their own companies.

Various physicians and speakers are on the payroll of the pharmaceutical companies, with compensation of hundred of thousands of dollars to promote the various items, are not to disappoint the payer.

The Pharmaceutical companies’ profit occurs from marketing the current available medication rather than R & D which is drying out. Big Pharma will just buy smaller companies with medication to go back and market the items in the very comfortable market in the United States with higher prices and profit out of this world.

Pharmaceutical Companies’ Research and Development spending is half the spending on marketing programs. With the cost of marketing is relatively low, the gap between marketing and R&D widens.

No Contractual agreement between Medicare and pharmaceutical companies for pricing the medication reasonably depending on the volume of utilization, nor any similarity with Europe when it comes to pricing.

The bulk of healthcare Insurance and cost is carried by the Medicare and Medicaid parts. People are living longer and the cost that is out of control creating a major problem to USA economy which is the only Country facing such a problem.

The private healthcare Insurances are covering young, healthy working individuals and as health deteriorates, it is passed to the Medicare system, which is the Tax Payer program.

There is no mechanism in place or consumer advocacy agency to control the healthcare cost such as arranging for certain medication to be in OTC, behind the counter, or in a new class as in this patent.

The American Medical Association complained repeatedly from the high cost of pharmaceuticals. Since the Pharmaceutical companies price their medication so high, other Medical services compete by pricing their services as high as possible. Then comes new medication to be priced based on the cost of hospitalization and other medical services which make the endless cycle of who can get more money out of the market.

There is a need for actin to change the system slightly, to connect the Healthcare cost and services with the economics of the United States of America. Accordingly prices will rise and fall depending on the economic condition like every- thing else. Housing, cars, Oils, various businesses are connected with the rise and fall of the economic activities and that should include the 16% of the GDP, Healthcare.

Raising the taxes on rich people eventually comes back to rich people again. However, healthcare services can raise prices without any competition,  the money will end up going to rich people or companies only associated with the healthcare business.

So we need  a change in the system and that is what the patent is for "Modification of the medication delivery system, "RPhX".

No comments:

Post a Comment