DRUG DEFIES A RARE FROM OF CANCER – AND MARKET LOGIC

OF COURSE, THIS ASSUMES THAT THERE IS A “MARKET LOGIC” AT WORK, A TREATISE I HAVE GRAVE DOUBTS ABOUT


We’ve all been reading and viewing about how our drug manufacturing companies (Big Pharma) have been explaining for decades now why drugs are so expensive.  Basically it’s this:  our mega-drug buddies must recoup their sky-high research and development costs, that’s why.  It takes years and years, decades even, and millions upon millions of dollars to discover, develop, manufacture and market a new drug and that’s why a single pill that costs me $8 a pop here in the good old U.S. of A costs me $0.60 in India, where, but the way, the bulk of our drugs are actually manufactured.  I’m assuming that the vast price differential is due to shipping costs. Yeah. Right.  Is Pfizer shipping drugs in Emirates Airlines' First Class cabins?

But in this morning’s newspaper (the solid not the electronic version) a front page article – left side headline – about one particular drug, Gleevec that cure’s a certain type of leukemia – pretty much rips all the justifications, rationales, free market workings, excuses, and drug company reasoning to shreds.  Shredded, you know, just like when that hook-up sex diary you’ve kept for years and finally decided it’s too risky to keep around any longer, you shoved through the noisy portable shredder you keep under your desk.

I’m reluctant to praise the Washington Post – they are extremely and unnecessarily  anti-Bernie reflecting, perhaps, the sentiments of Amazon’s Jeff Bezos, the Post’s current owner - but once again they’ve done some excellent research and discovered just how fucked up is our health care system is, particularly when it comes to Big Pharma and our health and well-being.   Not, of course, that this would qualify as a really big, Breathless Breaking News Headline when compared to the size of Donald Trump's penis, (small is my guess!), but the thoroughness of the article is spot on.

By way of background, Gleevec is a drug that treats a rare form of Leukemia, chronic myeloid leukemia, that is diagnosed in an estimated  8,220 Americans, mainly the elderly, annually.   Novartis, in developing the drug back in the late 1990’s won U.S. approval in 2001, and estimated that the drug would yield around $100 million in annual sales for the company.   By way of comparison, the benchmark for a successful drug among Big Pharma is around $1 billion in annual worldwide sales.  So Novartis wasn't expecting much.  But Novartis was wrong:   by the end of 2003, Gleevec was Novartis’ number 2 drug reaching a billion dollars in sales and by 2015 was pulling in some $4.7 billion dollars a year.

Despite the initial low sales expectations for the drug – after all, the market for chronic myeloid leukemia is relatively small – Novartis has a blockbuster drug on its hands.  How, you might ask, does a drug company earn so much money chasing such a minuscule market? 

Here’s how.  Given our truly fucked up health care system, Novartis can charge virtually any amount it chooses and in this case they have.   Back in 2003 the company “decided on” a price of $2,200 a month and kept nudging the price upwards annually, about 4% per year, more than the rate of inflation.  But, as the Free Market Capitalist workings would predict, in 2006 Bristol-Myers Squibb won approval for a competitor drug, Sprycel, and Novartis countered this move by developing its own competitor to Gleevec, Tasigna.  Now one would think that given competition (even their own) and the smooth workings of the Free Market marketplace, the price of the newly introduced competitors would be cheaper than Gleevec.  Logical, right?  But in fact, in some weird “anomaly” in competition-rich Capitalist economic performance, they were actually pricier with Sprycel coming in at $5,477 a month and Tasigna at $6,929 a month.  Weird isn’t it that competitor drugs would actually cost more than the drug they were developed to compete with.  But, of course, us mortals do not understand the mysterious workings of the marketplace, do we? 

Again, given the strange workings of our free market health care system, patients didn’t pay full freight for any of these treatments, Gleevec included.  Through discounts, deals with health insurance companies, and God knows what other free market workings, patients paid a median of $3,271 a month in 2001, but with increasing “competition” the median price had risen to $8,156 a month by 2014, after, let us recall, the introduction of competitor drugs to Gleevec.  Now, not to point out the obvious, but this spreading of costs to non-Gleevec users (the rest of us) by having our insurance companies pay, rather than the old timey capitalistic approach of each one of us paying full freight for the goods and services we use, is a classic Socialist solution. (I can imagine any number of Big Pharma CEO’s keeling over with stokes should they read this.  But they don’t.)

Presumably, the increasing cost of myeloid drugs is due to the mysterious workings of the Competitive Free Market Economy we enjoy here in the United States that we do not understand.  Copays for the drug, by the way, increased from a median $16 a month in 2001 to $33 in 2014, a fairly modest increase given the mysteries of Big Pharma.   Over time, Gleevec has also been approved for other uses, one of the means through which drug companies “defray” their R&D and marketing costs, another Free Market principle that should lower the price of the Gleevec.  But, no, the price just keeps on rising through some mysterious workings of the Capitalistic Free Market Marketplace - that we don't understand.  Of course economists have an explanation for this anomaly: The Free Market Economic Principle of Gouging Customers Whenever and However The Market Players Can.  

But what does Gleevec actually cost to produce?  Andrew Hill, senior researcher at the University of Liverpool, England, has calculated the cost of producing Imatinib, Gleevec's active raw ingredient.  He estimates that a year’s worth of the drug made into tablets and bottled with a 50% profit factored in, would cost no more than $216.   After all, as Hill stated, “They’re just chemicals.”  Wow!  Who Knew?  On the other hand, Hill is a “scientist” in one of those Socialist countries that provides "universal health care," so naturally his “ calculations” are highly suspect.

So I must conclude that the exorbitant cost of Gleevec has to be due to shipping costs, at least that’s been my experience in purchasing drugs in India (where nearly all of our drugs are manufactured) that cost anywhere from 40 times to a hundred times less than they do here in the Free Market Capital of the World, the United States of America. Man those shipping costs will get you every time!

Now, are there any more questions about why it is that Bernie Sanders’ campaign for the Presidency has sparked a bonfire in our Free Market Capitalist nation?    


NOTE:  There is much more excellent information in this WASHPO article that basically gives a rather chilling picture of how massively fucked up our health care system truly is. 


Comments

  1. The three types of blood cancer are listed as leukemia, lymphoma, and multiple myeloma. These three malignancies require quite different kinds of treatments. percocet buy online canada

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