Columns » Bob McCord

The price of drugs

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Do you think you are paying too much for the medicine you have to buy at your neighborhood drug store? Most people do, especially poor people, older people and people like me who don’t have medicine insurance and have to take more than a half a dozen pills or more every day. Last week CBS’ “60 Minutes” interviewed a man who agrees with us – a physician who surprisingly is a vice president of Pfizer, one of America’s pharmaceutical giants. His name is Dr. Peter Rost, and he says his colleagues “treat me like a sinner,” and so he thinks he probably won’t have his job much longer. Dr. Rost says that the medicine we buy in the U.S. could be bought for almost half the price in Europe. For example, Lipitor, one of the drugs that I and millions of other Americans take, is made by Dr. Rost’s company. In the U.S., its average price is $76 for a month’s supply, but the same amount costs only $43 in Italy. What could change this, according to Rost, is to allow what is known as “parallel trading” — companies buy drugs in countries where laws make them cheap and then sell them in countries where prices are high. These companies don’t make drugs. Their business is to buy the drugs, put labels on the bottles and instructions in the boxes in the correct language and ship them to the countries they sell to. “We’re talking about exactly the same drug, made in the same plant, by the same manufacturer,” explained Eric Pfeiffer, the owner of the business. “60 Minutes” reporters and cameramen visited his business in Copenhagen, and the pictures showed thousands of boxes coming into Pfeiffer’s buildings and then going out to different European countries. His employees never touch any of the drugs, and this is regularly checked by Danish health authorities. The TV showed a Danish pharmacist selling a customer an asthma inhaler that came from another country that cost $40 less than what he would have had to pay for an identical inhaler made in Denmark. Pfeiffer said he could easily provide medicine cheaper in the United States if the country would allow it. Of course, that will never happen. An official of Pfizer, John Theriault, said: “The position we take is that the more times a product changes hands, the more opportunity there is for the introduction of bad medicine. I don’t think that patient safety should be satisfied for affordability.” That’s just the jabber we expect from the pharmaceuticals, which, of course, pour out millions of dollars to presidential and congressional candidates in order to keep out competition. To no one’s surprise, Dr. Richard Carmona, appointed surgeon general of the United States, told “60 Minutes” that it would cost the country too much to regulate drug importation. Besides, he said, his job was not to lower costs but was rather “to ensure the safety of the American public.” One of the favorite excuses for American’s exorbitant medicine prices is that the pharmaceuticals have to make big money to pay for the re-search to find medicines that can keep us alive. That’s humorous. Regardless of their prices, the pharmaceuticals will always have to do re-search if they are going to have something to sell. Remember, of course, that in the USA, any company that invents a big-seller is allowed to patent the pill so that no other company can produce the pill for 20 years. Experts at the University of Arkansas for Medical Sciences, including Scott Pace, a pharmacist, and Mark Helm, a physician, prepared ways to control the costs of medicines that states have to help pay for persons (700,000 in Arkansas) who are poor or over 65 in the new Medicaid plan that began March 25. UAMS tries to get the pharmaceuticals to charge as little as possible, but still the price of medicine for Medicaid in Arkansas has gone up 16 percent in the last eight years. Pace and Helm think well of Europe’s “parallel trading” but don’t believe that it or anything else to cut prices is going to happen in this country soon. Dr. Helm has no belief in the pharmaceuticals’ plea that they couldn’t afford to continue research without charging high prices. “Many big manufacturing companies spend as much as 80 percent of their income in buying and building what they have to sell,” he said. “On the other hand, the pharmaceuticals only have to spend about 20 percent.” The result is that pharmaceuticals wind up with profits of 20 percent while companies like Ford Motors, General Motors, Walgreen’s and Wal-Mart wind up with profits from 2 to 3.8 percent. Some people growl that the corner drug stores are making the big profits. Not so, says Pace. According to him, profits are dropping from 4 to 3 percent because Medicaid and Medicare have made their work more complicated. “The neighborhood pharmacist is hardly responsible for the price of medicine going up,” Pace said. What’s clear is that the people responsible are the lobbyists in the Pharmaceutical Research and Manufacturing building at 1100 15th St. NW in Washington, D.C.

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