Burden from Pharmaceutical Industry Drug Patent Monopolies Exceeds Interest Payments on National Debt

The pharmaceutical industry must find it convenient that the financial burden it imposes in general on American society is mentioned a lot less than the much more minor burden imposed by interest payments on the national debt.

The deficit hawks have also never raised any concerns about the burdens created by government-granted patent and copyright monopolies. This is bizarre since these monopolies are an alternative mechanism to direct funding. The government could directly pay for research on drugs, software, and other items, paying for it through taxing or borrowing, or it can tell private companies to do the research and then give them monopolies to allow them to recover their costs.

The deficit hawks hyperventilate endlessly about the former route of paying for things, but completely ignore the latter, even though it poses a much larger burden. In the case of prescription drugs alone, the burden is more than $370 billion a year (we pay more than $450 billion for drugs that would likely cost less than $80 billion in a free market). This sum is just under 2.0 percent of GDP and more than twice the interest burden net of money rebated by the Fed. The total cost from these monopolies, including medical equipment, chemicals, software, and other items would likely be more than three times the cost of drug patents.

Anyone who is seriously concerned about the burden of government debt on future generations must also be concerned about the burden posed by patent and copyright monopolies, if they are consistent. Of course, if their goal is simply to cut Social Security, Medicare, and other social programs then it is understandable they would not want to discuss patent and copyright monopolies.

I’m not linking to the full article, but what’s not referred to is that there’s a different process possible to incentivize pharmaceutical innovation than using patent monopolies and other unjust legal protections for the industry. The pharmaceutical industry’s trade group, PhRMA, says that pharma corporations spend $70 billion a year on research and development. This is also in light of the industry spending more on stock buybacks that mostly benefit the upper class than it spends on R&D.

So the U.S. spends a few hundred billion dollars more a year than it has to on prescription drugs, and instead of giving that taxpayer-directed money away to be misused by the pharma industry, a lesser amount could be spent on direct funding for the NIH (say $90 billion a year) — with much better research outcomes and lower prescription costs for consumers. This isn’t the easiest concept to understand, but it’s valuable if you’re able to see it, and I linked to where I wrote about it in more depth as well.

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Study Shows a Bigger Pharmaceutical Industry is Linked to Worse Health Outcomes

The ridiculously extreme profits of pharmaceutical corporations has allowed them to lobby legislatures and enact laws that further boost their profits — while being detrimental to the public interest. Much of this is due to drug patent monopolies, which are regularly equivalent to harmful, regressive tariffs of hundreds or thousands of percent.

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While Americans debate the rising cost of health care, a new study of 30 countries over 27 years found that medical expansion has improved overall health — with one major exception.

Researchers found that increased spending on health care and increases in specialized care were both associated with longer life expectancy and less mortality in the countries studied.

But pharmaceutical industry expansion was linked to negative health effects.

“This study isn’t the first to suggest prescription drugs can pose a health risk. But it is the first to find that the growth of the pharmaceutical industry itself may be associated with worse rather than better health,” said Hui Zheng, lead author of the study and associate professor of sociology at The Ohio State University.

[…]

Two measures of expansion in the pharmaceutical industry — increased sales and more money spent on research and development — were linked to lower life expectancy among women aged 65 and older, and with increased mortality rates. The pharmaceutical measures were not associated with the other health outcomes studied.

The researchers ran tests to confirm that it wasn’t the other way around — that lower life expectancy and increased mortality were causing an expansion of the pharmaceutical industry. But that wasn’t the case.

That wasn’t the only negative finding about the growing drug industry.

“We found that as the pharmaceutical industry expands, there is a decrease in the beneficial impact of medical specialization on population health,” Zheng said.

This study can’t say why expansion in the pharmaceutical industry is leading to negative population health effects, Zheng said.

“It could be due to toxic side effects of drugs, doctors’ prescribing practices, patients’ misuse of prescription drugs, reasons related to pharmaceutical industry’s marketing strategies or some combination of these factors,” he said.

Prozac and Chemical Imbalances in the Brain — The False Narrative

There are admittedly probably a few people with actual chemical imbalances in the brain that cause depression, but for the most part, I think the commonly false chemical imbalance narrative is a ploy pushed by pharmaceutical companies to make profits. I lived years of my life with pretty severe depression and I knew that antidepressants wouldn’t remedy that — if anything, they would have made it worse. I learned that sleeping enough, exercising fairly often, finding some satisfying sex life (ideally finding a lover), limiting or avoiding drug intake, having a healthy diet, having good friends, and doing work that is fulfilling and meaningful are much better types of solutions than relying on a pill. The underlying problem has to be fixed for real happiness — it shouldn’t be artificially made with drugs.

Some 2,000 years ago, the Ancient Greek scholar Hippocrates argued that all ailments, including mental illnesses such as melancholia, could be explained by imbalances in the four bodily fluids, or “humors.” Today, most of us like to think we know better: Depression—our term for melancholia—is caused by an imbalance, sure, but a chemical imbalance, in the brain.

This explanation, widely cited as empirical truth, is false. It was once a tentatively-posed hypothesis in the sciences, but no evidence for it has been found, and so it has been discarded by physicians and researchers. Yet the idea of chemical imbalances has remained stubbornly embedded in the public understanding of depression.

Prozac, approved by the US Food and Drug Administration 30 years ago today, on Dec. 29, 1987, marked the first in a wave of widely prescribed antidepressants that built on and capitalized off this theory. No wonder: Taking a drug to tweak the biological chemical imbalances in the brain makes intuitive sense. But depression isn’t caused by a chemical imbalance, we don’t know how Prozac works, and we don’t even know for sure if it’s an effective treatment for the majority of people with depression.

One reason the theory of chemical imbalances won’t die is that it fits in with psychiatry’s attempt, over the past half century, to portray depression as a disease of the brain, instead of an illness of the mind. This narrative, which depicts depression as a biological condition that afflicts the material substance of the body, much like cancer, divorces depression from the self. It also casts aside the social factors that contribute to depression, such as isolation, poverty, or tragic events, as secondary concerns. Non-pharmaceutical treatments, such as therapy and exercise, often play second fiddle to drugs.

In the three decades since Prozac went on the market, antidepressants have propagated, which has further fed into the myths and false narratives we tell about mental illnesses. In that time, these trends have shifted not just our understanding, but our actual experiences of depression.

[…]

Both the narrative and the use of drugs to treat symptoms of depression transformed after Prozac—the brand name for fluoxetine—was released. “Prozac was unique when it came out in terms of side effects compared to the antidepressants available at the time (tricyclic antidepressants and monoamine oxidase inhibitors),” Anthony Rothschild, psychiatry professor at the University of Massachusetts Medical School, writes in an email. “It was the first of the newer antidepressants with less side effects.”

Even the minimum therapeutic dose of commonly prescribed tricyclics like amitriptyline (Elavil) could cause intolerable side effects, says Hyman. “Also these drugs were potentially lethal in overdose, which terrified prescribers.” The market for early antidepressants, as a result, was small.

Prozac changed everything. It was the first major success in the selective serotonin reuptake inhibitor (SSRI) class of drugs, designed to target serotonin, a neurotransmitter. It was followed by many more SSRIs, which came to dominate the antidepressant market. The variety affords choice, which means that anyone who experiences a problematic side effect from one drug can simply opt for another. (Each antidepressant causes variable and unpredictable side effects in some patients. Deciding which antidepressant to prescribe to which patient has been described as a “flip of a coin.”)

Rothschild notes that all existing antidepressant have similar efficacy. “No drug today is more efficacious that the very first antidepressants such as the tricyclic imipramine,” agrees Hyman. Three decades since Prozac arrived, there are many more antidepressant options, but no improvement in efficacy of treatment.

Meanwhile, as Lacasse and Leo note in a 2005 paper, manufacturers typically marketed these drugs with references to chemical imbalances in the brain. For example, a 2001 television ad for sertraline (another SSRI) said, “While the causes are unknown, depression may be related to an imbalance of natural chemicals between nerve cells in the brain. Prescription Zoloft works to correct this imbalance.”

Another advertisement, this one in 2005, for the drug paroxetine, said, “With continued treatment, Paxil can help restore the balance of serotonin,” a neurotransmitter.

“[T]he serotonin hypothesis is typically presented as a collective scientific belief,” write Lacasse and Leo, though, as they note: “There is not a single peer-reviewed article that can be accurately cited to directly support claims of serotonin deficiency in any mental disorder, while there are many articles that present counterevidence.”

Despite the lack of evidence, the theory has saturated society. In their 2007 paper, Lacasse and Leo point to dozens of articles in mainstream publications that refer to chemical imbalances as the unquestioned cause of depression. One New York Times article on Joseph Schildkraut, the psychiatrist who first put forward the theory in 1965, states that his hypothesis “proved to be right.” When Lacasse and Leo asked the reporter for evidence to support this unfounded claim, they did not get a response. A decade on, there are still dozens of articles published every month in which depression is unquestionably described as the result of a chemical imbalance, and many people explain their own symptoms by referring to the myth.

Meanwhile, 30 years after Prozac was released, rates of depression are higher than ever.

[…]

Depression is now a global health epidemic, affecting one in four people worldwide. Treating it as an individual medical disorder, primarily with drugs, and failing to consider the environmental factors that underlie the epidemic—such as isolation and poverty, bereavement, job loss, long-term unemployment, and sexual abuse—is comparable to asking citizens to live in a smog-ridden city and using medication to treat the diseases that result instead of regulating pollution.

Investing in substantive societal changes could help prevent the onset of widespread mental illness; we could attempt to prevent the depressive health epidemic, rather than treating it once it’s already prevalent. The conditions that engender a higher quality of life—safe and affordable housing, counsellors in schools, meaningful employment, strong local communities to combat loneliness—are not necessarily easy or cheap to create. But all would lead to a population that has fewer mental health issues, and would be, ultimately, far more productive for society.

Inhumane Avarice as Inherited Vision Loss Treatment to Cost $850,000

The extremely high cost means that only the wealthy will be able to afford the vision loss treatment. This is especially pernicious because *inherited* vision loss is something that those affected by the ailment were born with. It isn’t as a result of anything wrong they did themselves.

The $850,000 cost is also pernicious because the development of Luxturna benefited significantly from tax breaks and government research investments. It’s therefore yet another twisted case of public costs and privatized profits.

In December, the FDA approved a treatment from the pharmaceutical company Spark Therapeutics to treat a rare form of inherited vision loss. And January 3rd, the company put a price tag on the groundbreaking treatment. The Luxturna gene therapy will cost $850,000 — or $425,000 per eye.

Originally, the price of the treatment was estimated at $1 million. But even with the slightly lower cost, Luxturna is still one of the priciest treatments in the world.

Luxturna is the first gene therapy approved in the U.S. for an inherited disease, and patients only need to receive the treatment one time. The therapy was created to treat patients with retinal dystrophy, an inherited form of vision loss that causes the destruction of retinal cells. Luxturna works by injecting each eye with a normal copy of the gene responsible for vision loss. Retinal dystrophy affects between 1,000 and 2,000 Americans.

[…]

Medical advancements over the past decade have been amazing, and Luxturna has the potential to benefit thousands of people. But the reality is that most people probably won’t be able to afford this treatment, meaning it will only be accessible to the incredibly wealthy. And for people who can’t access health insurance, regular trips to the doctor are difficult to afford, let alone life-altering medications like Luxturna. We urge pharmaceutical companies to make groundbreaking treatments available for all people — not just the 1 percent.

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Source: Public Citizen

Latest Price Gouging as Cost of Gleostine Drug is Hiked 1400%

Drug patent monopolies have long been detrimental to the general population. In 2017, the U.S. spent over $450 billion (2.4 percent of annual GDP) on prescription drugs, an amount that would probably have been one fifth of that total if there were no government-granted drug patent monopolies. Furthermore, in world history’s richest country, it is absurd that about 20 percent of seniors regularly cannot afford their medication. That happens as the top five biggest pharmaceutical corporations made a combined $50 billion in profits for the year too.

Gleostine, which had its patent expire recently, is the latest example of this systemic pharmaceutical failure. The drug companies must be reined in, or these outrages will keep continuing into the future.

Critics of the pharmaceutical industry have expressed outrage over a Wall Street Journal analysis that found the owner of a 40-year-old cancer drug used to treat brain tumors and Hodgkin’s lymphoma has hiked the cost of the medication by 1,400 percent since acquiring it in 2013.

Lomustine, which was introduced in 1976, “has no generic competition, giving seller NextSource Biotechnology LLC significant pricing power,” the Journal reports, noting that lomustine is just “one of at least 319 drugs for which U.S. patents have expired but which have no generic copies, according to a list the agency published earlier this month.”

While the U.S. Food and Drug Administration is reportedly working to speed up the approval process for generic versions of these drugs, some critics say the report demonstrates a need for a broader overhaul of the nation’s healthcare system, with the Robin Hood Tax campaign citing it as evidence for “why we need” Medicare For All, which has been promoted by Sen. Bernie Sanders (I-Vt.) and a growing number of Democrats in Congress.

[…]

“This is simply price gouging, period,” concluded Henry Friedman, a neuro-oncologist at Duke University who wrote an editorial criticizing the lomustine price hikes earlier this year. “People are not going to be able to afford it, or they’re going to pay a lot of money and have financial liability.”

Atrocious Consequences of Pharmaceutical Price Gouging

The greed of the pharmaceutical industry has caused far too much suffering already, and it is long past time that the industry payed a high price of its own for the damage it has caused.

Particular important to highlight again is the part where — in the wealthiest country in world history — “Shane Patrick Boyle, a founder of Zine Fest Houston, died on March 18 after his GoFundMe campaign to pay for insulin came up $50 short.” What kind of society can that sentence even be written in?

Last year The New York Times published an op-ed urging the break up of the “insulin racket.” But rather than break it up, Trump has nominated one of its architects, Alex Azar, for secretary of Health and Human Services.

From 2007 to 2017, Azar worked for pharmaceutical giant Eli Lilly. While he was a senior VP, Lilly paid a record $1.415 billion to settle a case on its off-label promotion of the antipsychotic Zyprexa. Rising up the ranks, Azar became president of Lilly USA, the largest division of Eli Lilly, in 2012, a position he held until resigning in January of this year.

During Azar’s tenure, Eli Lilly raised the prices on its insulins in the United States by 20.8 percent in 2014, 16.9 percent in 2015, and 7.5 percent in 2016. Eli Lilly’s biggest seller, Humalog insulin, is now off-patent. But rather than becoming cheaper, Humalog costs more now than when it first came to market in 1996. When Azar started working at Eli Lilly in June 2007, the list price for a vial of Humalog was $74. When he quit in January 2017, it was $269.

At T1International we asked people with type 1 diabetes around the world how much they paid each month to stay alive. The United States topped every country, spending on average $571.69 per month on diabetes costs. Even with insurance, some Americans are spending around half their income on insulin and other supplies.

In fact, price gouging from Eli Lilly and other insulin manufacturers has already had deadly consequences. Shane Patrick Boyle, a founder of Zine Fest Houston, died on March 18 after his GoFundMe campaign to pay for insulin came up $50 short. Alec Raeshawn Smith, age 26, was found dead in his apartment on June 27. He was rationing his insulin after he aged out of his parent’s insurance coverage. The sad fact is more people would be alive today if insulin was affordable for all Americans.

Contrary to pharma propaganda, insulin is neither “new” nor “innovative.” It was developed in Toronto in 1921. The discoverers turned down the chance to create for-profit clinics. Instead, they licensed their creation for $1 (Canadian) a piece. Their recorded reason for doing this was to make sure insulin would be available for all who needed it. Eli Lilly’s was tasked with manufacturing insulin for North America. There was an understanding insulin would be sold at a reasonable price until there was a cure for diabetes.

What difference a century makes! Eli Lilly is currently under investigation by multiple state attorneys general for price fixing. It is also named in a class-action lawsuit that alleges that it colluded with Novo Nordisk and Sanofi to keep the prices in the US insulin market rising. These “Big 3” insulin makers control over 90 percent of the global market and maintain their lock on it in many ways. One is “pay-for-delay schemes,” like when Sanofi paid Eli Lilly to delay the launch of an insulin similar to its Lantus brand. Another is to sue potential competitors for intellectual property infringement, such as when Merck attempted to enter the insulin market in 2016. The companies also funnel money into patient-advocacy groups, both big and small. This might explain the inaction or even outright opposition of these groups on measures that may rein in prices.

Financing Prescription Drugs Using a Different System Without Harmful Drug Patent Monopolies

A new study finds that scientific breakthroughs are significantly as a result of collaboration. It used the development of five anti-cancer drugs to show how important researchers sharing information was, and it also strengthened the notion that beneficial scientific research tends to advance fastest when the results are fully open to view.

The study is evidence against the pharmaceutical research financing failure that is drug patent monopolies. Pharmaceutical corporations have an incentive to share as little of their research as possible to be granted their drug patent monopolies, as doing otherwise would risk threats to their profit margins through not receiving the patent. If the research findings are kept hidden from the public in this type of example, there is also a waste of resources to develop another similarly effective drug. This is notably seen with the Hepatitis C drug Sovaldi, which costs $84,000 for a 12 week course of treatment because the Gilead Sciences corporation has a patent monopoly on the drug. This is usefully contrasted with a high quality generic of Sovaldi selling for only $200 for the same three month course of treatment in India.

The U.S. government has the power to arrest people who sell Sovaldi in competition with Gilead Sciences, so the Abbvie corporation developed its own Hepatitis C cure drug known as Mavyret. Sovaldi was already an effective drug at curing Hepatitis C though, so the researchers that developed Mavyret could have been focused on other important research. This is, of course, a phenomenon that is continuously repeated with other drugs, and it prompts the logical conclusion of using a different system to finance pharmaceutical research.

A more ideal system would be to make drug patent monopolies illegal and have the U.S. government directly finance pharmaceutical research. The U.S. public already funds the National Institutes of Health with $30 billion annually, and even the pharmaceutical industry admits that is money well spent. PhRMA, the industry trade group, puts the amount that the pharmaceutical corporations spend on yearly research and development at only a somewhat higher total of $70 billion. This is in light of an important study revealing that pharmaceutical corporations spend more on stock buybacks that benefit the wealthy than they do on research and development. That is in light of the U.S. set to spend $450 billion (2.4 percent of GDP) on prescription drugs in 2017, an amount that would be $370 billion — half of the latest U.S. military budget approval — less if the patents and related unjust protections were removed from the pharmaceutical industry.

These large expenditures are especially significant considering that it’s been estimated that the U.S. will spend an even higher $610 billion a year on prescription drugs by 2021. With the current pharmaceutical system, that will mean that the U.S. could be spending about $120 billion on prescription drugs in 2021 instead of $610 billion.

The $370 billion possible to save currently though could be used in a variety of more productive ways than granting it to the pharmaceutical industry under the current financing system. For one example, the budget of the NIH could easily be boosted by a factor of five, making it $150 billion a year. What money remains is possible to spend on productive investment programs, such as an infrastructure project for clean and renewable energy. The U.S. economy is not doing that well for most of its people, but a significant improvement to that should be well-known — government investment to stimulate more demand.

The research done by the NIH could of course remain fully open for pharmaceutical companies and other organizations to use to develop drugs. Developed drugs could then be sold inexpensively without patent monopolies and the other unjust protections, which is how it should be done considering that prescription drugs are usually cheap to produce after their research process is completed. The firms developing valuable drugs should be rewarded for their innovative efforts, and they could be through the combination of governmental contracting, a publicly-funded prize system, and the demand of markets. That would almost certainly be a more beneficial system for the public interest than the current drug patent monopoly scandal, which is inefficient at advancing vital research and leaves many millions struggling to afford unnecessarily costly prescription drugs.

Thugnificently

In his own (admittedly questionable) way, Thugnificent wasn’t a sucker for the pharmaceutical industry’s tricks. You shouldn’t be a sucker for their tricks either. [Image is from S3E12 of The Boondocks.]