In an ideal free market economy, a bad product solicits scorn and condemnation while gaining the lowest price points. In the real world, market behavior is dictated by perception, speculation, and manipulation.
When the US housing bubble burst in 2008, it was the US taxpayers who effectively bailed out the “too big to fail” banks, a corporate feat that could end up as the biggest heist in recent memory, i.e. $15-20 trillion in total cannot be accounted for properly by the Federal Reserve.
It turned out that the same surreptitious formula is being used all along to sustain Big Pharma’s ever increasing prices of drugs.
After Martin Shkreli raised the price of anti-parasitic drug Daraprim more than 50-fold to $750 a pill last year, he said he wasn’t alone in taking big price hikes.
As it turns out, the former drug executive was right. A survey of about 3,000 brand-name prescription drugs found that prices more than doubled for 60 and at least quadrupled for 20 since December 2014.
Among the biggest increases was Alcortin A, a combination steroid and antibiotic gel to treat eczema and skin infections: The price soared 1,860 percent, or almost 20-fold, during the period. And a vial of Aloprim, a Mylan NV drug for cancer complications, more than doubled, according to the survey by DRX, a provider of price-comparison software to health plans.
Skyrocketing prices are getting increased scrutiny ahead of a U.S. congressional hearing this week: Democratic Representative Elijah Cummings, ranking member on a committee that is probing drug pricing, said Tuesday that pricing “tactics are not limited to a few ‘bad apples,’ but are prominent throughout the industry.”
Even after soaring prices became an issue in the U.S. presidential campaign, the cost of many drugs has continued to rise at annual rates of more than 10 percent. Drugmakers raised the prices of products as wide-ranging as erectile dysfunction drug Viagra, heart treatments, dermatology medicine and even brands that long have lost their patents. While specialty companies have had the steepest hikes, giants such as Pfizer Inc. and GlaxoSmithKline Plc kept pushing through smaller rises.
“The data shows that price increases are an integral part of the business plan,” said Jim Yocum, executive vice president at DRX.
Price increases are timed perfectly during holiday seasons when people are looking forward to great family get together.
Pharmaceutical companies often boost prices around the end and the start of the year, and the scale of recent increases was higher than what Yocum has seen in the past few years. About 400 formulations of brand-name drugs went up at least 9.9 percent since early December, according to DRX.
For Big Pharma to implement the scam, they must tap the assistance of charitable companies which could help people met insurance copayments on costly drugs. According to Bloomberg,
In August 2015, Turing Pharmaceuticals and its then-chief executive, Martin Shkreli, purchased a drug called Daraprim and immediately raised its price more than 5,000 percent. Within days, Turing contacted Patient Services Inc., or PSI, a charity that helps people meet the insurance copayments on costly drugs. Turing wanted PSI to create a fund for patients with toxoplasmosis, a parasitic infection that is most often treated with Daraprim.
Having just made Daraprim much more costly, Turing was now offering to make it more affordable. But this is not a feel-good story. It’s a story about why expensive drugs keep getting more expensive, and how U.S. taxpayers support a billion-dollar system in which charitable giving is, in effect, a very profitable form of investing for drug companies—one that may also be tax-deductible.
PSI, which runs similar programs for more than 20 diseases, jumped at Turing’s offer and suggested the company kick things off with a donation of $22 million, including $1.6 million for the charity’s costs. That got Turing’s attention. “Did you see the amounts??? $22MM!!!” wrote Tina Ghorban, Turing’s senior director of business analytics, in an e-mail to a colleague. (The document was obtained by congressional investigators looking into the company’s pricing.) Turing ultimately agreed to contribute $1 million for the patient fund, plus $80,000 for PSI’s costs.
And the only reason people are still buying them is the blatant discrimination of better non-drug options by their conscripted FDA and CDC.
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While 40 million Americans are covered through the government-funded Medicare drug program, the rest of the population are made to pay for the expensive drug subsidy, without ever knowing that they are doing so.
Those who meet income guidelines can get much or all of their out-of-pocket drug costs covered by a charity: a large initial copay for a prescription, another sum known as the coverage gap or the donut hole, and more-modest ongoing costs. It adds up fast. After Turing raised Daraprim’s price, some toxoplasmosis patients on Medicare had initial out-of-pocket costs of as much as $3,000.
That’s just a fraction of the total cost. Turing’s new price for an initial six-week course of Daraprim is $60,000 to $90,000. Who pays the difference? For Medicare patients, U.S. taxpayers shoulder the burden. Medicare doesn’t release complete data on what it pays pharmaceutical companies each year, but this much is clear: A million-dollar contribution from a pharmaceutical company to a copay charity can keep hundreds of patients from abandoning a newly pricey drug, enabling the donor to collect many millions from Medicare.
Again, while being a generous donor to charities that could really boost public relations, pharmaceutical companies can also enjoy the benefits from taxpayer copayments and tax deductions. No wonder they can afford to extend huge commissions to the medical priesthood at large.
That’s all fine if only every drug we take in comes with a guarantee that it could really cure a particular disease for good. But why would they do that when curing a patient means one less customer?
If drugs are made to cure its patients today, the pharmaceutical companies would shut down the tomorrow.
“Drug companies aren’t contributing hundreds of millions of dollars for altruistic reasons”
“It looks great for pharmaceutical companies to say they are helping patients get the drugs,” says Adriane Fugh-Berman, a doctor who’s studied pharma marketing practices for three decades and is an associate professor of pharmacology and physiology at Georgetown University.
The intent of these donations, she says, is to “deflect criticism of high drug prices. Meanwhile, they’re bankrupting the health-care system.”
Although these products give the illusion of cure by masking the symptoms, they only make way for a more severe ailments later on by virtue of their being manmade.
It’s time to wake up from our self-induced delusions and accept the fact that for as long as the motivation to profit is there, the motivation to destroy and take advantage of the other will continue.
Contrary to the eugenicists’ dogma that this is all about survival of the fittest, Nature is teaching us otherwise, i.e. to prosper through peaceful cooperation.
Even today, if only the right technology is utilized for the right purpose, we can satisfy all the basic needs of man, and eliminate the need for a system of profit.
Life would be boring without competition, so says the myopic mindset. But what kind of society is it which promotes the destruction of life instead of further enhancing it?
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