I am passionately in agreement with some Republicans who warn us that the health care reform package recently passed by Congress does not go to the roots of the problems and will therefore not solve the health care crisis in America.
The Democrats' health care reform legislation is a very promising start, but the country's efforts to rein in the cost of its health care will not be successful if the root causes are not addressed.
We know that doctors are a major cause. The practice of medicine in this country is an exercise in capitalism. It is no longer considered as a public service, which it is in many countries ranging from the highly industrialized countries such as Canada, Australia, Great Britain, France and Germany all the way to third-world countries such as the Philippines and Cuba.
We know that lawyers drive up costs by going for doctor's jugulars every time doctors make mistakes. If there is no tort reform, costs will remain high.
We also know that drug companies' primary mission is to maximize returns for their stockholders. As public corporations, their ultimate responsibility is to their stockholders. Providing cures or alleviating symptoms is only a secondary mission. Once upon a time, drug companies started out with a mission to find cures for diseases. Not anymore, now Big Pharma's mission is to maximize returns for stockholders.
We know that the same drugs that are sold in the U.S. cost at least twice as much as those sold in Canada. If those drugs were invented by Americans and developed by Americans, how come American consumers pay much more for them than their Canadian counterparts?
There is only one way to explain this. U.S. drug manufacturers made the determination early on that the way to recoup their research and development expenses was to charge American consumers outrageous prices.
The American system is perfect for this. The insurance companies are the ones paying for the drugs, and as everyone knows the huge for-profit insurance companies can afford to pay. They can absorb the costs since they can merely pass them on to their insured by periodically raising insurance premiums. There is no limit to the number of times insurance companies can raise premiums.
The high-cost drugs are absorbed into the health care system in the U.S. because we have a pipeline mentality here. Whatever costs are incurred by the members of the system are merely passed on ultimately to consumers. The drugs go smoothly through the pipeline and as long as the howls and protests are few, drug prices just keep on flowing at prices that have no relation to production costs.
Only the sick notice, but sick people do not have the energy to demonstrate in Congress. They will pay any amount to get well or to keep the symptoms of their ailments under control.
The insurance companies profit from the atrociously high drug prices. Assuming that insurance companies are allowed an 8 percent return on their costs, the higher the cost of the medicines, the bigger the profits for the insurance companies.
We keep reading in the papers that American consumers subsidize the cost of drugs in other countries. To what extent? Below is a comparison of the prices of some life-sustaining and life-saving medicines sold in the U.S., Canada and Mexico.
Prescription Drug-----Dosage------Price in Maryland----Canadian Price--Mexican Price
Zocor--------------5 mg., 60 tab.-----$113.97-------------$46.17----------$67.65
Prilosec-----------20 mg., 30 cap.-----122.62--------------55.10-----------32.10
Procardia XL-------30 mg., 100 tab.----144.89--------------74.25-----------76.60
Zoloft-------------50 mg., 100 tab.----238.44-------------129.05----------219.35
Norvasc-------------5 mg., 90 tab.-----127.17--------------89.91-----------99.32
The average price differential, based on the above drug cocktail, is 98% for Maryland versus Canada and 95% for Maryland vs. Mexico. (Source: Minority Staff Report prepared for U.S. Congressman Elijah E. Cummings of the Committee on Government Reform and Oversight, U.S. House of Representatives - August 10, 1999.)
The prices charged for drugs in Australia are even lower than the prices in Canada, according to one source.
The drug industry apologists do not deny that American consumers are being raked by the drug companies for even their spare change. Every single apologist for the drug industry will tell you that drug companies must be allowed to recoup their huge investments in research and development through atrociously high prices charged American consumers.
Yes, folks, the drug companies have determined that U.S. consumers must underwrite the cost of R & D, ahead of everybody else. We Americans must pay through the nose so that others - Canadians, Mexicans, Australians, Europeans - can have the same drugs at a fraction of the prices charged Americans.
Is this right? Why must it be a disadvantage to be an American compared to being a Candaian, or an Australian? Shouldn't it be the other way around? Shouldn't we Americans pay less for prescription drugs since it is our American drug companies who are constantly coming up with these newer and better drugs with less and less side effects?
Is it because our higher standard of living allows us to afford more? Maybe so. But as we Americans know, and as the whole world now knows, the American standard of living is under attack. We Americans are becoming more and more like the Europeans. The Chinese are fast catching up with us. The Japanese have exceeded us. The Australians and Canadians are right on the trail of the Japanese.
So why do we Americans continue to subsidize the cost of medicines in other countries? Because we allow the drug manufacturers to price discriminate against us. That's the only explanation.
If we Americans stand on rooftops and scream enough is enough, we will no longer be forced to subsidize the world's consumption of life-saving and life-preserving drugs things will begin to change. And this is change that we can believe in.
The situation is urgent. Without a reform of the way drug companies price their products in the U.S., health care reform in America will remain just a dream.
We made a great start with the health care reform package passed by Congress and signed by President Obama. But, we must not stop there. Drug companies must charge consumers in other industrialized countries the same or nearly the same prices for their products as they charge American consumers.
It is not only fair, it is one essential way to reduce the cost of health care in America.
(Next week: the hospitals.)
