Many of Big Pharma’s overpriced medications developed with taxpayer-funded research

Image: Many of Big Pharma’s overpriced medications developed with taxpayer-funded research

Source: NaturalNews.com
Vicki Batts
January 23, 2017

Big Pharma has been subject to immense scrutiny for quite some time now. Government inquiries of the industry date back to 1959, with Congress having launched over 50 individual hearings to investigate their practices. These hearings have reached the same conclusion: that Big Pharma is making huge profits at the expense of the American people. And yet, for some reason, the government has yet to do anything to put a stop to this nonsense.

In almost 60 years, since the investigations of Big Pharma began, Congress has never passed any kind of legislation to prevent the pharmaceutical industry from charging exorbitant prices — even for products that were developed with taxpayer dollars. (RELATED: Find out more about Big Pharma at Medicine.news)

Corporate greed keeps life-saving drugs from veterans

Just three years ago, in 2014, the Senate Subcommittee on Primary Health and Aging held a hearing to investigate the skyrocketing price of generic drugs. Drug prices have continued to increase since then, of course.

The following year, Gilead came under fire for their outlandish drug prices — most notably, the sky-high costs of their drugs for hepatitis C. One drug, Solvaldi, was actually developed by a research scientist from the Department of Veterans’ Affairs. After being acquired by Gilead, the product was priced so high that the VA — which paid to develop the drug — could not afford to give the pills to their own patients.

Gilead felt that it was fair for them to charge $1,000 per pill for a drug that they themselves had not even created. The retail price for a 12-week Solvaldi treatment is a sickening $84,000; even with a 50 percent discount, the VA was still unable to afford treatment for many sick veterans that contacted Hep C while overseas during the Vietnam War.

Only the lowest of the low could sleep at night, knowing that their price-gouging was preventing veterans from getting much-needed medical care.

Don’t worry, it gets worse.

Dr. Raymond Schinazi, the drug’s creator — owner of Pharmasett and at the time of the drug’s creation, Senior Research Scientist of the VA in Atlanta — admitted in a 2013 trade publication that an entire 12-week treatment of Solvaldi only cost $1,400 to make. A report from Americans For Tax Fairness states that Schinazi and his private company received millions in federal grant money to conduct research and develop treatment for Hep C.

Schinazi sold his company to Gilead in 2012. Shortly after acquiring it, Gilead saw fit to raise the price of the drug — to nearly 60 times what it costs to produce.

Following their investigation of Gilead, government officials concluded that the only explanation for the explicit price-gouging was corporate greed: they charged as much as possible, purely because they could.

(Related: Read more about rigged pricing, rigged polls and rigged systems at Rigged.news)

Other drugs have been created with taxpayer money

ABC News reported that the federal government’s National Institutes of Health (NIH) spent some $484 million dollars on developing a cancer drug called Taxol. They entered an agreement with Bristol-Myers Squibb (BMS) in 1993.  A 2003 report by the Government Accounting Office (GAO) revealed that the federal government recovered a mere $35 million in royalty payments — even though BMS had racked up profits to the tune of $9 billion — in just 9 years. That’s a billion dollars a year in profits! And yet it was our tax dollars that paid for all that research.

The GAO report showed that the NIH spent almost half a billion dollars to research and create a new drug, and they then signed a contract that inevitably allowed a pharmaceutical company to patent it and prevent generics from entering the marketplace for years. It is beyond comprehension and totally reprehensible.

Corruption and greed in the pharmaceutical industry are hardly a thing of the past. More recently, pharmaceutical giant Mylan was called out for their price-gouging of the life-saving EpiPen. After acquiring the EpiPen patent — which was initially developed for the Department of Defense — Mylan increased the price of the product by 461 percent over the course of nine years.

There are countless other instances of wrongdoing within the pharmaceutical industry, particularly as it pertains to government regulation and policy.  Clearly, this is an issue that needs to be resolved — and should have been remedied years ago during or after one of the 50 investigations the government has conducted.

Read More at: NaturalNews.com

Sources:

Workers.org

RT.com

ABCNews.go.com

AmericansForTaxFairness.org

GenomeBiology.BiomedCentral.com

USUncut.com

 

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Harvard Study Finally Admits Drug Prices are High Because Govt Grants Big Pharma a Monopoly

big-pharma
via: GreyEnigma.wordpress.com
via: SentinalBlog.com
Source: ActivistPost.com
Matt Agorist
August 27, 2016

In what can only be described as paradigm-shattering research on drug prices, the Journal of the American Medical Association has officially recognized why drug prices skyrocket in America. Big pharma is granted a monopoly by the State which effectively eliminates their competition and allows them to charge any price they want — so they do.

The new paper, published on August 23,  “The High Cost of Prescription Drugs in the United States: Origins and Prospects for Reform,” set out to  “review the origins and effects of high drug prices in the US market and to consider policy options that could contain the cost of prescription drugs.”

What the paper’s authors, Harvard Medical School doctors Aaron Kesselheim and Jerry Avorn, and jurist Ameet Sarpatwari, found and subsequently admitted, shatters the very assertion that government regulation in the market is needed to keep medical care costs low. In fact, their findings were quite to the contrary.

According to the paper:

The most important factor that allows manufacturers to set high drug prices is market exclusivity, protected by monopoly rights awarded upon Food and Drug Administration approval and by patents.

Imagine that.

The costs associated with studying, testing, and getting new drugs approved can be staggering, and the money made from selling the new drug is often used to pay for future drugs as well as paying back investments made to produce the current ones. Unfortunately, the people involved in creating life-saving drugs cannot work for free.

Nothing is wrong with making a drug that saves lives and profiting from it. However, when the profits are a direct result of government involvement, it no longer becomes an issue of innovation and the market, but rather an issue of a State-granted monopoly.

According to the paper:

Although prices are often justified by the high cost of drug development, there is no evidence of an association between research and development costs and prices; rather, prescription drugs are priced in the United States primarily on the basis of what the market will bear.

Increasing the market price of an item to the maximum profit per unit is a natural function of the free market. And, contrary to what the pro-government regulation sect asserts, this increase in price in relation to supply coupled with competition, happens to work toward keeping prices down — unless these prices are protected by a government-granted monopoly. 

As the paper points out:

The most important factor that allows manufacturers to set high drug prices for brand-name drugs is market exclusivity, which arises from 2 forms of legal protection against competition. Together, these factors generate government-granted monopoly rights for a defined period. Initial regulatory exclusivity is awarded at FDA approval.

While the Journal of the American Medical Association is finally admitting the reason for skyrocketing drug prices, Austrian economists have been pointing this out for decades.

Ludwig von Mises correctly explains the situation in the statement below:

As has been pointed out already, there is no such tendency toward monopolization. It is a fact that with many commodities in many countries monopoly prices prevail, and moreover, some articles are sold at monopoly prices on the world market. However, almost all of these instances of monopoly prices are the outgrowth of government interference with business. They were not created by the interplay of the factors operating on a free market. They are not products of capitalism, but precisely of the endeavors to counteract the forces determining the height of the market prices. It is a distortion of fact to speak of monopoly capitalism. It would be more appropriate to speak of monopoly interventionism or of monopoly statism.

A glaring example of the staggering discrepancies in American drug prices can be seen in the remarkable drug for Hep C, sofosbuvir. Sofosbuvir boasts a near miraculous cure rate of 84-96% for Hep C. 

However, the American version of the drug Solvaldi by Gilead, which has an FDA-granted monopoly protecting it, will cost patients a mountainous $84,000. 

In India, however, Gilead has to compete in a free market. Competitors, of which there a many, using the older, much cheaper, and equally effective drug, have driven the price down to a mere $4 a pill. This makes the total cost of curing Hepatitis C in India’s free market — $336.

Because the FDA has become little more than a revolving door for the pharmaceutical industry to continually grant itself special privilege, the natural checks and balances of the market do not apply and we see seemingly insane price differences when compared to other markets.

One example of this revolving door is FDA member, Milton Packer, who chairs the Cardiovascular and Renal Drugs Advisory Committee. Packer, who reviews applications for drugs submitted for FDA approval, is financed by Novartis and actually spoke on their behalf to the advisory board that he chaired.

According to the Wall Street Journal, Packer also appeared before the Cardiovascular and Renal Drugs Advisory Committee involved speaking on behalf of Bristol-Myers Squibb in 2002; acted as a consultant and speaker for GlaxoSmithKline in 2003; appeared as a speaker for NitroMed in 2005; appeared as a speaker for Sanofi in 2009 and acted as a consultant on behalf of Pfizer in 2010.

And Packer is only one example, the list goes on.

The timing of this paper is impeccable given the recent hoopla in the news on the absurd price hike of EpiPens. Mylan CEO, Heather Bresch – daughter of Senator Joe Manchin (D-West Virginia) — is on the receiving end of the FDA’s power to monopolize drugs. As a result of her monopoly, no one can compete with Mylan which has grown Bresch’s annual salary from $2.4 million in 2007 to $18.9 million in 2015.

Again, there is nothing wrong with making money. But, when that money is made at the expense of everyone else — freedom loses.

While the mainstream media often acknowledges that these drug companies charge exorbitant prices for their medications, they conveniently leave out the reason they can do so is because they have the full support of Uncle Sam.

Instead of looking at the corrupt government, who has the unique ability to create and sustain monopolies, the evil market is blamed, and people ironically call for more government – thus creating a vicious cycle of corporatism.

Hopefully, this admonition in JAMA, by these doctors from the Harvard Medical School, opens the eyes of those who continuously cry for more regulation to control prices. We’ve seen where that’s gotten us.

Here at the Free Thought Project we agree with the authors when they say:

High drug prices are the result of the approach the United States has taken to granting government-protected monopolies to drug manufacturers, combined with coverage requirements imposed on government-funded drug benefits. The most realistic short-term strategies to address high prices include enforcing more stringent requirements for the award and extension of exclusivity rights; enhancing competition by ensuring timely generic drug availability.

Matt Agorist is the co-founder of TheFreeThoughtProject.com, where this article first appeared. He is an honorably discharged veteran of the USMC and former intelligence operator directly tasked by the NSA. This prior experience gives him unique insight into the world of government corruption and the American police state. Agorist has been an independent journalist for over a decade and has been featured on mainstream networks around the world.

Read More At: GreyEnigma.com