According to the Wall Street Journal:
Demand for a drug called Avonex has declined every year for the past 10. Not a problem for its manufacturer. U.S. revenue from the drug has more than doubled in that time, to $2 billion last year. The key: repeated price increases. The multiple sclerosis drug’s maker, Biogen Inc., raised its price an average of 16% a year throughout the decade—21 times in all. It is an example of drug companies’ unusual ability to boost prices beyond the inflation rate to drive their revenue, even when demand for the drugs doesn’t cooperate. A result of this pricing power is that across 30 top-selling drugs sold by pharmacies, U.S. revenue growth has far outpaced demand in the past five years, according to a Wall Street Journal analysis of corporate filings and industry data. Revenue growth averaged 61%, three times the increase in prescriptions.
Understand what all of this means: Americans are being fleeced. But it’s a deeper, systemic problem. It is legal robbery based on a system that has allowed health care to be a profit center. Our system redistributes the wealth of the masses to the wealthy few that own most of the drug and health care companies. Because we all get sick eventually, we don’t have much choice other than to acquiesce to the extortion.
It is a lie that these high prices lead to better drugs. They only result in richer people at the top. After all, taxpayers invest in a substantial number of drug research trials and studies, yet partake in none of the profits.
Major U.S. drug companies and their Washington, D.C. lobby group, the Pharmaceutical Research and Manufacturers of America (PhRMA), have carried out a misleading campaign to scare policy makers and the public. PhRMA’s central claim is that the industry needs extraordinary profits to fund expensive, risky and innovative research and development (R&D) for new drugs. If anything is done to moderate prices or profits, R&D will suffer, and, as PhRMA’s president recently claimed, "it’s going to harm millions of Americans who have life-threatening conditions." But this R&D scare card – or canard – is built on myths, falsehoods and misunderstandings, all of which are made possible by the drug industry’s staunch refusal to open its R&D records to congressional investigators or other independent auditors.
How do drug companies get away with this legalized theft? In addition to lobbying Congress, they brainwash Americans into the false belief that they are receiving some benefit for an overpriced product. The astounding amount of money they invest in advertising and marketing is probative. Yet, Americans live no longer than most in the industrialized world.
Ultimately, the only solution is a single payer/Medicare for All system where drug companies are regulated more strictly than utility companies. If they find that too restrictive, research and development can be relegated solely to public universities, and manufactured by the lowest bidder.
Drug companies’ sole desire is to make a profit. Humanity plays no role. Why, then, should anyone believe they will perform any better than a university? Why not pay professors a high salary to develop products based solely on science without the worry of advertising cost, exploitative executives, and shareholders?
A single payer system would give Americans the power to demand this.
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