Since I write on healthcare, I can add some information to Prof. Heather's post. On the topic of diabetes. "The increase in annual diabetes spending between 1996 and 2013 was $64.4 billion of which $44.4 billion of this increase was pharmaceutical spending. Said another way, two-thirds of the increase in treating diabetes was due simply …
Since I write on healthcare, I can add some information to Prof. Heather's post. On the topic of diabetes. "The increase in annual diabetes spending between 1996 and 2013 was $64.4 billion of which $44.4 billion of this increase was pharmaceutical spending. Said another way, two-thirds of the increase in treating diabetes was due simply to the increased pricing of pharmaceutical companies."
In 1996 Eli Lilly’s Humalog was $21 per vial. By 2017, the price increased to $275 (700%) for a vial which equates to a one-month supply.
Why has the cost of Humalog increased? “The truth is the improvements in new formularies of old versions which are marginally different, and the clinical benefits of them over the older drugs have been zero.” Just like slapping “new and improved” on the labels of food products with a change of ingredients (which qualifies under USDA and FDA labeling regs)., pharmaceuticals can play the same game and they do.
This is from 2019. Pricing without regard to costs is the biggest issue with Humalog. People argue prices and I argue costs which do not necessarily translate to pricing justification. This is what I did in manufacturing for 40+ years.
The VA pays far less for Humalog. Less costly than Medicare, And far less than commercial healthcare.
When I need infusions of Rituxan, traditional Medicare cost is $8000 as compared to list of $28,000.
These are perfect examples of what happens when capitalism isn't tightly regulated: like a plague of locusts, it will eat everything it encounters.
On a related note, imagine waking up one day and you realize you're the CEO of a Big Pharma company. Suddenly, it occurs to you that you're the person who approved these inhumane, greedy price increases on people dealing with serious diseases. Horrifying, right? Not to the people whose annual bonuses and stock options reward them for making other humans suffer.
When I was asked to write on opioid addiction and Camron King, it was discovered the efforts of his mother to gain legislation against the over prescription of opioids was countered by legislators who took an ~ 1 billion dollars in political support which included NM.
You can watch the increase in opioid abuse starting in 1996 with the introduction of Oxycontin by Purdue onward through 2017 using Senate Committee data. There is no denying Purdue had an impact on drug abuse. They will walk away from this unscathed with an 8 billion dollar penalty. It is not enough. I used to chase prisoners in the Marine Corps for marijuana usage to their court martials. For a sergeant, it was dirty and sad duty. Those kids paid for being stupid.
It is the state and federal legislators that should be held accountable for this and the rising pricing of drugs regardless of cost.
For those of you who are curious, look to the Jick and Porter letter from 1980. One sentence was abused and altered by those pushing OxyContin. "We conclude that despite widespread use of narcotic drugs in hospitals, the development of addiction is rare in medical patients with no history of addiction. "
They dropped the "use of narcotic drugs (opioids) in a hospitals."
Michael, management bonuses are sacred in the United States. Those have grown more than exponentially since 1980 and fuel a myriad of problems here and overseas.
But, as long as management prioritizes bonuses above ALL other aspects of business operation, then, we will have companies like Apple with giagantic factories in China paying people $17/day inside fenced compounds that one cannot escape from where people work AT LEAST 10 hour shifts in very, very tough conditions.
In my former life, annual performance bonuses were a key part of much of my career. But luckily they weren’t tied to bad things. I do, though, understand the inducement.
Michael Big Pharma, billionaires and corporations who pay no or minimal taxes, farmers who get paid billions for not planting, churches that are clearly political under their tax exempt umbrella—-these all enjoy a Senate ‘get out of jail’ pass, while lobbyists don’t employ their sleaze to support child care, voter rights, and other basic needs of the American people.
Sadly, this seems to be the modern American Way. President Biden has endeavored to redress this balance, but he has been unable to obtain the support of his ‘progressive/depressive’ Democratic Congress.
President Biden’s adroit handling of our ship of state is endangered. Unless there is a Democratic miracle in November with our large ‘false fact’ populous, the Republican Good ‘ol Boys will return with Turkey Chin McConnell, Cancun Cruz, and Horseshit Hawley and their ‘shit of state.’
Pat Thanks! My daughter teaching elementary school and almost certainly will have access to Yertle the Turtle, which I missed by a generation (or two).
Add in the exponential growth of the American waistline (obesity) and the number of people requiring insulin increases the demand (= profits) even more.
I'd say "Yes". I imagine they're also in cahoots with Monsanto who produces GMO seeds. Seeds which include GMO corn which is used to produce High Fructose Corn Syrup which is used in so many processed foods in the U.S. which contributes to obesity and...diabetes...which in turn leads people to Lilly's door in need of an insulin fix. The circle goes round and round and round. So it goes....
Not likely although you may be able to Google costs. The cost plus mark-up will not equal the price charged. Manufacturers of pharma do not typically deal directly with drug stores. I scrapped out several mi;;iom pills one time a couple of decades ago for a few $thousand. Pricing was much higher.
There is another layer for sure called PBMs or pharmacy benefit managers who negotiate for drug stores and take a cut of the discount achieved. Manufacturers claim they have to charge more because of PBMs taking larger cuts or "rebates." The actual discount received is not made known to Healthcare Insurance plans.
VA gets the best costs for its formulary. Medicare should be allowed to use the VA formulary and Part D would mostly disappear. Asking about actual cost is a good question to ask. Also R&D costs are recouped in ~6 years according to a WHO technical paper.
Since I write on healthcare, I can add some information to Prof. Heather's post. On the topic of diabetes. "The increase in annual diabetes spending between 1996 and 2013 was $64.4 billion of which $44.4 billion of this increase was pharmaceutical spending. Said another way, two-thirds of the increase in treating diabetes was due simply to the increased pricing of pharmaceutical companies."
In 1996 Eli Lilly’s Humalog was $21 per vial. By 2017, the price increased to $275 (700%) for a vial which equates to a one-month supply.
Why has the cost of Humalog increased? “The truth is the improvements in new formularies of old versions which are marginally different, and the clinical benefits of them over the older drugs have been zero.” Just like slapping “new and improved” on the labels of food products with a change of ingredients (which qualifies under USDA and FDA labeling regs)., pharmaceuticals can play the same game and they do.
This is from 2019. Pricing without regard to costs is the biggest issue with Humalog. People argue prices and I argue costs which do not necessarily translate to pricing justification. This is what I did in manufacturing for 40+ years.
The VA pays far less for Humalog. Less costly than Medicare, And far less than commercial healthcare.
When I need infusions of Rituxan, traditional Medicare cost is $8000 as compared to list of $28,000.
These are perfect examples of what happens when capitalism isn't tightly regulated: like a plague of locusts, it will eat everything it encounters.
On a related note, imagine waking up one day and you realize you're the CEO of a Big Pharma company. Suddenly, it occurs to you that you're the person who approved these inhumane, greedy price increases on people dealing with serious diseases. Horrifying, right? Not to the people whose annual bonuses and stock options reward them for making other humans suffer.
Michael:
When I was asked to write on opioid addiction and Camron King, it was discovered the efforts of his mother to gain legislation against the over prescription of opioids was countered by legislators who took an ~ 1 billion dollars in political support which included NM.
You can watch the increase in opioid abuse starting in 1996 with the introduction of Oxycontin by Purdue onward through 2017 using Senate Committee data. There is no denying Purdue had an impact on drug abuse. They will walk away from this unscathed with an 8 billion dollar penalty. It is not enough. I used to chase prisoners in the Marine Corps for marijuana usage to their court martials. For a sergeant, it was dirty and sad duty. Those kids paid for being stupid.
It is the state and federal legislators that should be held accountable for this and the rising pricing of drugs regardless of cost.
For those of you who are curious, look to the Jick and Porter letter from 1980. One sentence was abused and altered by those pushing OxyContin. "We conclude that despite widespread use of narcotic drugs in hospitals, the development of addiction is rare in medical patients with no history of addiction. "
They dropped the "use of narcotic drugs (opioids) in a hospitals."
Oh.
Michael, management bonuses are sacred in the United States. Those have grown more than exponentially since 1980 and fuel a myriad of problems here and overseas.
But, as long as management prioritizes bonuses above ALL other aspects of business operation, then, we will have companies like Apple with giagantic factories in China paying people $17/day inside fenced compounds that one cannot escape from where people work AT LEAST 10 hour shifts in very, very tough conditions.
https://www.thesun.co.uk/news/5365914/workers-at-apple-factory-in-china-work-10-hour-shifts-exposed-to-toxic-gases-for-just-55-a-week-campaign-group-claims/#:~:text=EMPLOYEES%20at%20a%20giant%20Chinese,while%20working%20in%20cramped%20workshops.
So, anyone who says American sponsored "slavery" is part of the past is simply not paying attention.
And, modern slavery is fueled by American management bonuses, more than 90% of which go to white men.
https://thesocietypages.org/specials/fortune-500-ceos-2000-2020-still-male-still-white/#:~:text=White%20men%20may%20have%20lost,still%20hold%2085.8%25%20in%202020.
Not much has changed here since 1845. Just Corporations are not called Plantations.
In my former life, annual performance bonuses were a key part of much of my career. But luckily they weren’t tied to bad things. I do, though, understand the inducement.
Michael Big Pharma, billionaires and corporations who pay no or minimal taxes, farmers who get paid billions for not planting, churches that are clearly political under their tax exempt umbrella—-these all enjoy a Senate ‘get out of jail’ pass, while lobbyists don’t employ their sleaze to support child care, voter rights, and other basic needs of the American people.
Sadly, this seems to be the modern American Way. President Biden has endeavored to redress this balance, but he has been unable to obtain the support of his ‘progressive/depressive’ Democratic Congress.
President Biden’s adroit handling of our ship of state is endangered. Unless there is a Democratic miracle in November with our large ‘false fact’ populous, the Republican Good ‘ol Boys will return with Turkey Chin McConnell, Cancun Cruz, and Horseshit Hawley and their ‘shit of state.’
For a lark Keith, look up Yertle the Turtle. byDr. Seuss. The parody will be apparent.
Pat Thanks! My daughter teaching elementary school and almost certainly will have access to Yertle the Turtle, which I missed by a generation (or two).
Excellent list. I would add the billions of dollars in subsidies paid to the highly profitable oil companies.
Bill, great post and thank you. Really highlights how corruption has entered all walks of American capitalism (and most of its "Democracy").
Bill, thank you for this explanation.
Add in the exponential growth of the American waistline (obesity) and the number of people requiring insulin increases the demand (= profits) even more.
Is Eli Lilly in cahoots with Little Debbie?
I'd say "Yes". I imagine they're also in cahoots with Monsanto who produces GMO seeds. Seeds which include GMO corn which is used to produce High Fructose Corn Syrup which is used in so many processed foods in the U.S. which contributes to obesity and...diabetes...which in turn leads people to Lilly's door in need of an insulin fix. The circle goes round and round and round. So it goes....
Thanks, Bill. Question:Is it possible for the average consumer to find out the cost (not price) of a drug?
We’re charged considerably less for hubby’s Rx paying cash vs. using insurance.The system is broken..
Hi Kathy;
Not likely although you may be able to Google costs. The cost plus mark-up will not equal the price charged. Manufacturers of pharma do not typically deal directly with drug stores. I scrapped out several mi;;iom pills one time a couple of decades ago for a few $thousand. Pricing was much higher.
There is another layer for sure called PBMs or pharmacy benefit managers who negotiate for drug stores and take a cut of the discount achieved. Manufacturers claim they have to charge more because of PBMs taking larger cuts or "rebates." The actual discount received is not made known to Healthcare Insurance plans.
Need article and flow chart here: https://www.commonwealthfund.org/publications/explainer/2019/apr/pharmacy-benefit-managers-and-their-role-drug-spending
VA gets the best costs for its formulary. Medicare should be allowed to use the VA formulary and Part D would mostly disappear. Asking about actual cost is a good question to ask. Also R&D costs are recouped in ~6 years according to a WHO technical paper.
Thanks, Bill ! So informative. I was aware of PBM’s but not the “devil in the details”.
Trying to ask and dig for answers from the industry is soooo frustrating !