by Charles Hugh Smith, Of Two Minds:
Any society that tolerates this systemic exploitation and corruption as “business as usual” is not just sick–it’s hopeless.
In noting that our society is sick, our economy exploitive and our politics corrupt, I’m not saying anything you didn’t already know. Everyone who isn’t being paid to deny the obvious in public (while fuming helplessly about the phony cheerleading in private) knows that our society is a layer-cake of pathologies, our economy little more than institutionalized racketeering and our politics a corrupt auction-house of pay-for-play, influence-peddling, money-grubbing and brazen pandering for votes.
The fantasy promoted by do-gooders and PR hacks alike is that this corrupt system can be reformed with a few minor policy tweaks. If you want a brief but thorough explanation of Why Our Status Quo Failed and Is Beyond Reform, please take a look at my book (link above).
If you want an example of how the status quo has failed and is beyond reform, it’s instructive to examine the pharmaceutical industry, which includes biotech corporations, specialty pharmaceutical firms and the global corporate giants known as Big Pharma.
I hope it won’t come as too great a surprise that the pharmaceutical industry isn’t about cures or helping needy people–it’s about profits. As a Big Pharma CEO reported in a brief moment of truthfulness, We’re in Business of Shareholder Profit, Not Helping the Sick
Here’s an excerpt from the article:
“Already this year, Valeant has increased the price of 56 of the drugs in its portfolio an average of 66 percent, highlighted by their recent acquisition, Zegerid, which they promptly raised 550 percent. Not only does this have the unfortunate side effect of placing the price of life-saving drugs out of reach for even moderately-insured people, but it has now begun to call into question the sustainability of this rapidly-spreading business model.
Since being named CEO in 2008, Valeant has acquired more than 100 drugs and seen their stock price rise more than 1,000 percent with Pearson at the helm.”
Longtime correspondent John F., M.D. has been sending me a steady stream of media accounts of pharma companies jacking up prices by 400% and 500%, even though the medications are off-patent and have been around for years or even decades.
John F. explains the context:
“The Epi-Pen (or the generic equivalent) is the only thing that people with severe allergies – including many children – can carry that will save their lives if used at the start of a severe allergic reaction. There is no substitute. The maker, Mylan, has increased the price six-fold over the past few years. Epinephrine is a very old generic drug. It is the packaging that makes it patentable. There is absolutely no reason for the cost to make Epi-Pens to have increased.
People who have had a life-threatening allergic reaction to food or insect stings need these – they are absolutely essential to save their lives. Epinephrine has been generic since I was in medical school in the ’70s, yet the FDA have allowed the manufacturer to increase the price 600% in the last few years.
There is a generic substitute for the Epi Pen now, but they jacked the price of it up to around $400 (it’s near the end of the article). These kits are cardboard boxes with two plastic syringes with one needle each, with a little medicine in them. I can’t imagine they cost more than $10 to make, and they have been around since I was in medical school in the ’70s, so it’s not like they must recoup extensive research costs.”
“I wrote to you about the huge increase in price of colchicine, an excellent drug for people with gout, and sometimes the only drug they can use, which is generic, but the FDA allowed a manufacturer to jack the price to the sky in the past 12 months. Now, the two major pharmacy benefit companies are dropping it from coverage. I can’t emphasize this enough – this is the only drug some patients can take for a disease that sometimes is life-threatening (can cause kidney failure), and by all rights should be ten cents a pill or less.”
Unsurprisingly, pharma sales have been soaring. Take cheap generic drugs and jack up the price by 400%, and it’s no surprise that sales have risen from $550 billion annually in 2004 to over $1 trillion in 2014.
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