DRUG GOUGING DRUG MANUFACTURER’S

There is nothing more gross than the companies that manufacture  drugs and  then deliberately gouge the public for their drugs especially when the need is imperative for the lives of those who need the drugs to survive. 

A serious case of price gouging by drug companies, with serious and sometimes fatal consequences, involves the sale of  insulin. Roughly 30 million Americans have diabetes, a chronic disease where the body’s mechanism for controlling blood sugar levels isn’t working properly. About 7 million of them must take multiple doses of insulin daily to control blood sugar levels. Those with Type 1 diabetes, formerly referred to as early-onset or juvenile diabetes, suffer from a pancreas that doesn’t produced adequate amounts of natural insulin so they must use three to four 20-milliliter vials of manufactured insulin a month (or other equivalent forms of insulin). Failure to use insulin regularly to control blood sugar levels can be fatal or have serious long-term impacts on health, including on vision and mobility. Some lose their legs. A man I knew when we were six years old later lost his legs to  diabetes and years later, he died.

Insulin is a 100-year-old drug whose three developers at the University of Toronto in 1922 sold their patent rights to the University for $1 apiece. They thought this would guarantee affordable access to those needing it in perpetuity. They sold manufacturing and distribution rights to Lilly in the U.S. and Nordisk in Europe. After a year, competitors were free to enter the market.

Today, three big pharmaceutical corporations make the worldwide supply of insulin: Lilly, Novo Nordisk, and Sanofi. Their prices for insulin have skyrocketed, tripling from 2007 to 2017, resulting in their making billions of dollars in profits from their insulin sales.  This constitutes price gouging.

The U.S. market has 15% of global insulin users but generates 50% of worldwide revenue because prices here are so much higher in the U.S, than they are elsewhere. For example, vials of insulin that sell for close to $300 in the U.S. sell for only $30 in Canada.

Insulin for a Type 1 diabetic costs about $1,300 a month in the U.S. Because the U.S. does not regulate drug prices as other countries do, so insulin’s manufacturers have increased U.S. prices dramatically in recent years. For example, a 20-milliliter vial of insulin that cost $175 fifteen years ago costs $1,487 today, eight and a half times as much. Because Medicare, the U.S. health insurance for seniors, is prohibited by law from negotiating drug prices (a gift to the industry from friendly Congress people and a friendly President), Medicare spending on insulin grew from $1.4 billion in 2007 to $13.3 billion in 2017. While some of this increase is due to increased numbers of patients using it, per patient Medicare spending on insulin increased 358% from $862 to $3,949. Out-of-pocket spending by Medicare patients themselves also increased, going from $236 million to $968 million—close to a billion dollars.

Estimates of the cost to produce a vial of insulin range from $2.28 to $6.16 depending on the version of insulin and other factors, so the $300 retail cost represents a huge mark-up and huge profits for the drug makers. Until the 1970s, the price of insulin stayed relatively low. In the 1940s the U.S. Department of Justice leveled small anti-trust fines on entities in the Lilly supply chain, indicating the U.S. regulators would intervene if prices were jacked up.  That is why there is a real need to increase the fines considerably so that the manufactures won’t treat the fines simply as the cost of manufacturing the drugs.

Starting in the late 1970s, changes in politics and laws created increased opportunities for drug makers to profit from the exclusive rights granted by patents on drugs and to effectively extend the longevity of patent protections by tweaking a drug or its delivery mechanism. This set the stage for the pharmaceutical industry to become the most profitable industry in America. For example, Sanofi filed for 74 different patents on its version of insulin, which meant that it could go 37 years without any competition. As of 2014, the three big insulin makers held 19 active patents on their insulin products.

Often the new, patented versions of insulin provide limited benefits to patients, despite their significantly higher prices. However, aggressive marketing campaigns and partnerships with improved delivery devices lead to prescriptions for the new more expensive, and more profitable, products.

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Even for individuals with health insurance, the high price of insulin is problematic because of increased co-payments for drugs and because deductibles they must pay before insurance coverage kicks in have, on average, quadrupled over the last 10 years.

The grassroots organizers of the #insulin4all campaign are working to change U.S. policies and make insulin affordable. Their campaign may prove to be the spark that leads to regulation and negotiation of all drug prices in the U.S. Advocacy is increasing in energy and urgency because diabetics are literally fighting for their lives as insulin makers jack up the price and they don’t see their own government standing up for them.

The issue of drug prices and particularly insulin prices is, finally, getting increased attention. Congress is holding hearings on insulin prices. Federal and state legislation is being considered. Colorado has passed legislation capping co-payments for insulin. Some advocates have called for nationalizing the insulin market and public manufacturing of generic drugs, including insulin.

In May 2o19, Forty U.S. states filed a lawsuit against 20 pharmaceutical companies that make generic drugs by accusing the companies of participating in a scheme to inflate drug prices, sometimes by as much as 1,000%.There is evidence that a  multibillion dollar fraud on the American people," said Connecticut Attorney General William Tong. "We all wonder why our health care and specifically the prices for generic prescription drugs are so expensive in this country — this is a big reason why. Generic drugs are lower price alternatives to brand name drugs.

The 500-page lawsuit, filed Friday in the U.S. District Court in Connecticut, is seeking damages, civil penalties and actions by the court to restore competition to the generic drug market. The suit accuses Teva Pharmaceuticals of being the mastermind behind the scheme.

"Teva and its co-conspirators embarked on one of the most egregious and damaging price-fixing conspiracies in the history of the United States," according to the claim.

Teva Pharmaceuticals, an Israeli company, has denied the allegations and says it will fight the lawsuit. Other drug companies named in the suit include Sandoz and Pfizer.

It’s time to unleash the power of free-market economics to resolve a continuing outrage in the generic drug industry. Price gouging by rogue financial operators posing as pharma companies, most notably Valeant Pharmaceuticals and Turing Pharmaceuticals AG, has been possible because they have exploited distortions in supply and demand. The free market can correct those problems buy punishing the principals of these dishonest pharma companies.  First of all, remove them from their positions as leaders of their firms. Then give them such hefty fines that will bankrupt them. They a deserve this punishment because they are  the scumbags of our world.

At one Harlem pharmacy, N95 masks that typically cost about $3.00 were selling for anywhere from $8.99 to $20 esch. A Daily News reporter found the price for a box of 20 N95 masks went from $24.98 to $39.98 during the first week of March at one Williamsburg hardware store.  A bottle of Lysol spray was priced at $11.99 last week at a Manhattan pharmacy and at a Staten Island store when the city staffers searched for gougers across the five boroughs. The same item was selling for $5.99 at Target.

A report noted that there were additionally reports of toilet paper, thermometers and some over-the-counter medicine selling for inflated prices as city officials moved to combat the potentially deadly virus that has now infected more than 25,000 New Yorkers.

Price gouging is illegal and unethical.  It puts personal greed over public good. And in the midst of this crisis, we have seen it around the country. These bad actors are taking advantage of people in need.

ff these creeps  aren’t punished, they will gouge everyone when a vaccine is developed to  protect everyone from the COVID19 virus.