Drug Company Pricing Should there be a Law?

Kiwi Phil · Sep 5, 2004

Re: Drug Company Pricing Should there be a Law?

Down Under we have a system that you would kill to have. It is fair to everyone. There is NO advertising on TV etc of Drugs (not by regulation either). Everybody can afford medication. The Pharmac. Companies lobby very hard in other countries to prevent them from following our model. That is a fact. Several documentary's been made re it. Many Countries accept it is a good scheme. Cheers Phillip

Kiwi Phil · Sep 5, 2004

Re: Drug Company Pricing Should there be a Law?

I get cut off iboats after a while so will put this in sections. Every employee pays around 1.5% (?) Medicare Levy. Every person can only get drugs through their Dr. He must prescribe prescription medication. Unless you are poor/pensioner, you pay around $24 per perscription. No more. Poor/pensioners get theirs for around $3-4. When your spending exceeds around $700-800 per year, you then get a big reduction on all following prescriptions in that 12mth period. More to follow. Cheers Phillip

Kiwi Phil · Sep 5, 2004

Re: Drug Company Pricing Should there be a Law?

When you present your prescription to the pharmacist, he will ask if you wish a generic cheaper one. (Dr often asks you too). Example. Needed antibiotics the other day. Took the generic. Total cost to me$7. Cost to the Govt Nil. This is run by the Pharm. Benefits Scheme.(PBS) Here is a rough example how it works. Lets say on the Scheme there is a drug for X disease and it is priced at $70 per prescription. You get it and pay around $24. PBS picks up the difference. Another Drug Company comes along with new drug. They want $140 for theirs. They have to produce evidance their new one performs 100% better than existing drug on PBS. If it only performs 10% better, then they will be offered $77, take it or leave it. Unless the Drug Company can get its Drug listed on the PBS, they will never sell anything, not one prescription, as if not on the scheeme, Wholesalers will not stock it, Phamacy's don't have it available, and Drs won't prescribe it. Next installment coming. Phillip

Kiwi Phil · Sep 5, 2004

Re: Drug Company Pricing Should there be a Law?

The bottom line is, it is not a free for all among Drug Companies here. They get paid on how good their Drug is, and they must prove it's effectivness. Now there are a lot of extremely expensive medicines on the PBS, and they after subsidised by the PBS, as they are deemed to be very cost effective to society in the larger scheme of things. There is no TV advertising of Prescriptio Drugs, as it is a complete waste of time for the Drug Companies to spend their money on it. What they do spend their money on is the Doctors. They call it educating the Dr, but I would guess there is a tendancy to encourage the Dr to prescribe their product. If the Dr don't prescribe it, that's the end of that product. The Dr's we go to are very aware of what is on the market, what it does and how effective it is, and you get the best for your condition.

Kiwi Phil · Sep 5, 2004

Re: Drug Company Pricing Should there be a Law?

You obviously discuss your medication needs with your Dr. This is serious and done properly. You have the very best available to meet your needs. The bottom line is, all prescription medication must perform/be effective to a set criteria/level. I used the figure of $70 in the example above. If a generic comes on the market, identical in every way, at say $10, then the Company making the $70 one either matches the $10 price or he is off the scheme. If a new Drug, not identical, but better comes on the market, say 50% better but only 30% more expensive, then bye-bye again. If you manufacture drugs, you perform to a standard and are rewared financially to that standard.

Kiwi Phil · Sep 5, 2004

Re: Drug Company Pricing Should there be a Law?

Now, some of the other Aussies are going to correct me on points here and there, and may present some down sides to the scheme. That's fine. I took an real interest in the PBS when the free trade agreement with the USA came up this yr, and followed everthing I could. I hope I have got the main points right. The USA negotiators tried very hard to pretty much cripple the PBS, as several other Countries (in fact i understand one of your States) are looking closly at what the Aussies have done for many years. That's it, unless you want to know what it costs to see a Dr here. Cheers Phillip

Dunaruna · Sep 5, 2004

Re: Drug Company Pricing Should there be a Law?

Phil, you've got it just about covered but I would add: To date, I haven't seen a down side to the PBS. Everything you just said is the exact reason the free trade agreement has hit a brick wall. Their is more than one U.S. State looking at this system not to mention many countries. Aldo

Skinnywater · Sep 6, 2004

Re: Drug Company Pricing Should there be a Law?

Ah well, one persons thoughts, flame away if you'd like.

Nothing here deserves a flame lakelivin. Your qualified opinions are welcome and encouraged. Thanks for taking the time to participate. I think many of these topics are started with the genuine intent to educate and learn. Once we all hash it over citizen to citizen, we are better able to put pressure on the politicians and bureaucrats that fail to do thier jobs, represent us. And this is the point really. Nothing you've said disputes this. I'm not blaming the pharms. for buying influence and having monumental profits. It's good business. My beef is with the fact that the pharms are far better represented, then the taxpayer.

The cost of research & development is tremendous......Lastly, litigation.

This was being disputed in the Minnisota's AG report. Marketing and political contributions far exceeded the money spent on R&D and litigation. With legislative protection and the sweetheart deals already given by politicians, the fact blatantly remains, prices continue to rise along with record breaking profits.

There is a real difference in the way pharmaceuticals are treated vs. other health care by the insurance industry.

The list is long with the names of Fortune 500 companys that have our politicians bought and paid for, usually with taxpayer money.

Ralph 123 · Sep 6, 2004

Re: Drug Company Pricing Should there be a Law?

I think many of these topics are started with the genuine intent to educate and learn. Once we all hash it over citizen to citizen, we are better able to put pressure on the politicians and bureaucrats that fail to do thier jobs, represent us.

Exactly my motivation.

My beef is with the fact that the pharms are far better represented, then the taxpayer.

Couldn't agree more - and that's what I learned from this thread. The true extent to which we've been sold out by politicians of both parties. The true extent to which this market is far from free. I don't think socialized medicine is the answer and most of the world should hope we don't go that route because it could affect their own care by limiting the innovation our system produces. I don't think people appreciate the extent they benefit from advances in the US driven by the profit motive. What I want is a true free market by limiting/removing the manipulations from patent protections, tax credits, tort reform, group purchasing, unnecessary regulations, etc., etc.

Skinnywater · Sep 6, 2004

Re: Drug Company Pricing Should there be a Law?

Down Under we have a system that you would kill to have.

Thanks Phil. Instead we're gonna have a rough go at it. This is the age of politicians and bureaucrats. They have a 50/50 split of the voting public in denial and fighting among themselves. And have the majority of the citizens that don't vote, don't care, or are completely disgusted with the process. Hopefully Ralph's threads can educate us into getting involved with our local governments. Here is our only and best chance to force true representation of the people. At this point anything from the government, tax cuts, benefits, etc., is merely crumbs being tossed to the rable.

lakelivin · Sep 6, 2004

Re: Drug Company Pricing Should there be a Law?

Skinnywater, I don't think we are much in disagreement. I mentioned the issue about regulating advertising. I didn't mention (but certainly recognize) the vast sums spent on legislative lobbying by the pharmaceutical industry. Big problem in fixing/ addressing those things are constitutional ammendment issues the industry will bring up. My main point though, and what I think Ralph is mising in his post, is that in addition to political / legislative / administrative issues, we also have cultural ones that will make health care much harder to fix via a pure free market approach. Most people have an inherent 'money doesn't matter when it comes to my health' attitude. By this I don't mean that people don't care what they pay, rather that they presume that higher costs imply much better treatment. Or that comparison shopping health care options is tantamount to buying retread tires for your car just before taking a cross country trip, something you just don't do. And please note that I'm not talking about universally choosing the lowest cost option! We need to distinguish between new 'me too' drugs that may have minimal benefits over current options vs. true new breakthrough drugs. I just don't want to lose the perspective that although legislative reforms may be needed to help control costs for revolutionary treatmens, helping people to become educated health care consumers is probably also a critical step in making a free market health care system work.

Ralph 123 · Sep 6, 2004

Re: Drug Company Pricing Should there be a Law?

Most people have an inherent 'money doesn't matter when it comes to my health' attitude. By this I don't mean that people don't care what they pay, rather that they presume that higher costs imply much better treatment.

They don't care because they think it's better, they don't care because they aren't paying. The insurance companies pay the bills for the overwhelming majority so people don't even think about cost unless and until they have to dig into their own pocket. Think of it this way, no one in history has ever washed a rental car. As people have been forced to pay bigger and bigger shares of their health care costs you see greater and greater shopping around and greater pressure to fix the system. (The rise of HMOs in the 90s for example) It is funny how smart people get when they have to pay the bill. That's what free markets force people to do. It is when the choices are artificially limited and prices artificially fixed that the problems begin and the system breaks down.

Kiwi Phil · Sep 7, 2004

Re: Drug Company Pricing Should there be a Law?

I feel I should make the point that America is only one country that has large Pharm. Manufacturing Companies. The product available on our market is sourced from countries such as Germany, France, UK etc plus of course USA. The Lobbying issue is of real concern down here, as we are told the US Companies are doing it here rather agressivly. The argument is always raised by them that the cost of R&D requires long Patents and high prices, but in reality, their profits are known to be larger than oil and armament producers. I recall one documentary discussing profits and this particular industry is way ahead of all others in profit. Cheers Phillip

Ralph 123 · Sep 7, 2004

Re: Drug Company Pricing Should there be a Law?

No question Phillip - there are drug companies everywhere. My point was more that the US market is very large and very profitable as we discussed and that keeps them all fat and happy. If the US had a less profitable market I wonder what the results would be? Higher costs in other market? Less risk taking maybe? I wonder...

Skinnywater · Sep 7, 2004

Re: Drug Company Pricing Should there be a Law?

By Kiwi Phil;

The product available on our market is sourced from countries such as Germany, France, UK

Our prices would drop automatically with the same opportunity, a free market. Now for something solution based. If someone (or someones) where to attempt to pressure your representatives, what would be the best way? Again, to concentrate efforts with local (States) representative. Would making our own States AG aware of the Minnisota's AG study be best? Making our own representatives in Washington, since they're part of the problem and profit from it, I'd assume it would fall on deaf ears. Unless it's in numbers. Then creating a grassroots organization would be needed. This would require mass mailing forms? Would you concentrate on the root of the cause? i.e., campaign finances and "improper influence", opportunities for abuse" and "quid pro quo arrangements" Or specifically concentrating on the free market aspect? Hmmm....

Ralph 123 · Sep 7, 2004

Re: Drug Company Pricing Should there be a Law?

Most of these Pharma companies are multinationals so the drugs we get are the same ones even if they are produced locally - Bayer for example is a German company (and a very big global client of my old firm) This may get solved by the states openly challenging the importation laws which is going to force a showdown in the next year or so - so pushing the state governments and getting help from groups like AARP to apply the pressure would be the most direct approach IMHO Pushing a 2nd term President to take it on with no VP to worry about supporting might help too

On this issue, any President that wanted to take it on could force a change by using the bully pulpit...

mellowyellow · Sep 8, 2004

Re: Drug Company Pricing Should there be a Law?

voted in minority here Ralph... market economy. almost no one pays full retail, especially HMO's. why? they negotiate a lower "bulk" price just like many diff. bizs do on many products. there are also many examples of huge profit margins on products we buy. how much do you think it costs to make a box of cheerios? maybe a smart entrepenuer will fill this need in the future? they could negotiate the very best price on a drug on behalf of their customers and charge like a monthly membership fee to make their money. ps. I am one of the lucky ones who pay 100% outa pocket for any scripts.

Kiwi Phil · Sep 9, 2004

Re: Drug Company Pricing Should there be a Law?

You need a system like ours. It is very effective The Drug Manufacturer gets paid on the performance of his product, the level of performance of his product is measured against all other similar products on the market. Cheers Phillip

Drug Company Pricing Should there be a Law?

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