Big pharma has a sweet deal. Barriers to entry are prohibitively high, and the oligopoly is protected, and often reimbursed, by the government. From Charles Hugh Smith at oftwominds.com:
$8 per vial in competing developed-world nations and $38,892 in the U.S. That says it all.
Thanks to decades of gangster films, we all know how gangster capitalism works: the cost of “protection” goes up whenever the gangster wants to increase revenues, any competition is snuffed out, and “customer demand” is jacked up by any means available– addiction, for example.
This perfectly describes the pharmaceutical industry and every other cartel in America. You might have read about the price increase in Acthar gel, a medication to treat Infantile Spasms. (via J.F., M.D., who alerted me to the repricing of this medication from $40 in 2001 to the current price of $38,892.)
The compound first received approval in 1950, and various branded versions have been approved in recent years. Let’s be clear: this medication did not require billions of dollars in research and development, or decades of testing to obtain FDA approval; it’s been approved for use for the past 68 years.
Yes, you read that correctly: a medication that’s been in use for 68 years went from $40 a dose in 2001 to $38,892 today. Don’t you love the pricing? Not a round 38 grand, but $38,892. You gotta love these gangsters!
There’s another related term to describe this form of capitalism: racketeering.That’s what mobsters do–operate rackets.
The Big Pharma racket enriches a number of gangs practicing gangster capitalism: the drug companies themselves, of course, but some doctors are profiting from the racket, and so are pharmaceutical lobbyists:
Study highlights role of doctor conflicts of interest in Medicare spending on Mallinckrodt drug Acthar Study published in JAMA indicates nearly 90 percent of doctors prescribing HP Acthar Gel took payments from drug’s manufacturer.
Here are the money quotes:
In 2014 Mallinckrodt raised the price of Acthar further to $34,000. The Federal Trade Commission and attorneys general from five states sued Mallinckrodt for anti-competitive behavior with regard to the acquisition of Synacthen Depot and the monopolistic pricing of Acthar, and in January 2017 the company settled, agreeing to pay $100 million and to license Synacthen Depot to a competitor.
According to Kaiser Health News, Mallinckrodt responded by increasing its Congressional lobbying to $610,000, and its contributions to Congress members to $44,000, in the first quarter of 2017.
As an off-patent pharmaceutical, a similar drug, differing in formulation, available in Europe, made by a different manufacturer, sells for $8 per vial.
So a medication to treat infants costs $8 per vial in Europe and $38,892 in the U.S. Don’t you just love gangster capitalism to death? Because death and suffering is the gangsters’ ultimate threat: pay up or die.
To continue reading: Big Pharma and the Rise of Gangster Capitalism