Archive for December, 2019

Are You a Healthcare Prisoner in the Big Pharma Prison? “Follow the Money” and Find Out.

As we further explore the healthcare consumer in a healthcare prison, Big Pharma is an area we need to review and explore because companies are profiting hugely by raising prices to dizzying heights. Drugs that cost less than $400 a year in some countries cost $300,000 a year in the United States.

Eighty percent of the growth of profits in the 20 largest drug companies has resulted from price increases — not new drugs. Just raising prices.  The brunt of that pain is felt by the healthcare consumer because the drugs that we buy here are much more expensive than the prices elsewhere.

A few points need to be clarified regarding Your Doctor, Big Pharma and the Consumer before we can answer the question.

Your doctor contributes to the problem.  The following study is mind boggling:

In 2013, 1,122 (39.1%) of 2,873 Medicare Part D prescribers received gifts from pharmaceutical companies totaling $3.9 million in 2013. Compared to non-gift recipients, gift recipients prescribed 2.3 more claims per patient, prescribed medications costing $50 more per claim, and prescribed 7.8% more branded drugs. 

Physicians who received small gifts (less than $500 annually) had more expensive claims ($114 vs. $85) and more branded claims (30.3% vs. 25.7%) than physicians who received no gifts. Those receiving large gifts (greater than $500 annually) had the highest average costs per claim ($189) and branded claims (39.9%) than other groups.

Big Pharma by the Numbers:

First, most large drug companies spend more on sales and marketing than on research and development.  Anyone who watches television can attest to the growth and dominance of marketing to the consumer.

Second, since 1980 and the Bayh-Dole Act, drug companies can feed off research funded by the National Institutes of Health, which they acquire at late stages of development. The big companies can either license the drugs or buy out small biotech companies carrying out NIH-funded research. In short, much of the research going into these products is funded by taxpayers, not pharmaceutical revenues. Many companies have operating profits ranging from 15% to 30%.  The average S & P company had an operating profit of 10.4%

Third, the pharmaceutical industry has a massive lobbying presence, consistently spending over $200 million a year, according to the Center for Responsive Politics. It has more than two lobbyists for every member of Congress and spends tens of thousands of dollars per election cycle. That type of investment is only undertaken when there is a significant return expected. For example, Congress placed a provision in the 2003 Medicare Prescription Drug Benefit that prohibits Medicare from negotiating with drug companies on pricing. Now that’s a return on lobbying costs!

Fourth, Nielson estimated that $5.2 billion was spent on prescription drug advertising in 2015. The largest chunk of that amount was for television advertising.

And lastly, in 2013, biopharmaceutical companies led all other industries in corporate giving by donating 19.4% of pre-tax profits to charitable organizations. You probably won’t be surprised, though, that 90% of the contributions came in the form of in-kind product donations. High list prices for certain drugs can add up to some major bucks quickly. Still, it’s nice to know that the frequently vilified Big Pharma companies aren’t as heartless as they’re sometimes portrayed.

Now from a healthcare consumer prospective:

  • It is estimated that there are 110 million regular prescription drug users across the US.
  • 49% of us take at least one drug
  • 19% of us have skipped taking a drug or cut it in half
  • 14% of us chose not to fill prescriptions at all

Additionally, Big Pharma and insurance companies have developed relationships that have forced healthcare consumers to buy brand name versus generic drugs.  Insurance companies tell consumers the generics are not covered only brand names.  Unbelievable!!!!!

The above ‘costs of doing business’ result in the cost of healthcare for every healthcare consumer increasing at all levels. Furthermore, the practice of “gifting” medical professionals should be considered a crime—similar to rebating in the insurance industry.

Big Pharma gifts influence MDs script writing, which affects Medicare, Medicaid, and all healthcare insurance policies, coverages and, ultimately, premiums insureds pay.

If the above hasn’t convinced you are a healthcare prisoner in a healthcare prison I’m not sure what will.  Big Pharma locks us up and throws away the key. We clearly are prisoners. I rest my case!!!!!!

We have spoken with many healthcare consumers and they’ve shared scores of unbelievable stories. Talk to any of your friends, relatives or colleagues and I am sure they will have a Big Pharma story to tell.

Tells us what you think.

Escaping the Healthcare Prison; Are You a Healthcare Prisoner?

If one would judge by the rhetoric and lip-service coming from the healthcare industry, all is fine and getting better. The reality, however, is the healthcare landscape has changed significantly in a very short period of time and not for the betterment of the patient or consumer. Healthcare consumers and patients are finding themselves virtually captive.   Healthcare consumers are asked to do more, pay more and receive less value for each dollar spent. While healthcare consumerism receives much media attention, the reality is healthcare providers and payers are very content with the status quo.

In market based businesses, consumers require pricing information and a means to determine the quality of goods or service they’re receiving. In other complicated industries involving high consumer volume, like financial services, travel, retailing or automobiles, the government regulates the quality aspect and commercial enterprises provide pricing transparency. Healthcare is void of both. Providers nor payers have any intention of relinquishing the control.   Making it easy for the consumer to navigate the maze is counter productive to the current business model The lack of transparency isn’t unintentional, therefore, creating transparency must be intentional.

What’s the big secret? Why does pricing need to be so convuloted?  Pricing transparency is a hot topic. Industry insiders will argue against pricing transparency because they claim it’s to complicated for consumers to understand. Payers guard pricing like Coke protects the soda formulas. Compare trying to find a price for a healthcare service to any other consumer good or service!!!  Take a look at a hospital bill to really see the insanity. There will be a laundry list of incomprehensible items followed by individual pricing that will sum to a very large total followed by a relatively large discount resulting in what someone is expected to pay. This is an artifact of the Byzantine health insurance world when patients had little to no financial exposure to paying for healthcare services. Even though the marketplace has dramatically changed, incumbents have chosen not to.    States and the Federal government have done very little to help the healthcare consumer.  It’s laughable compared to other industries.

I believe we are healthcare prisoners in a virtual prison.  The following will explain what I mean.

Let’s define a healthcare consumer/patient, healthcare prisoner, and a virtual healthcare prison.

First a healthcare Consumer/Patient: Simple……Any person wanting to protect themselves from a catastrophic healthcare event or anyone who requires medical care.

Second, let’s define a Healthcare Prisoner
A Healthcare prisoner is a person buying health insurance or obtaining medical care.

 Third, let’s define the Virtual Healthcare Economic Prison.

With the passage of the Patient Protection and Affordable Act, effectively all Americans have been granted access to the healthcare economic prison. It’s now only a question of what degree. A Virtual Healthcare Economic Prison is any organization that extracts financial resources from patients/consumers or provides healthcare services to patients/consumers. These Virtual Prisons are…. the government (social security tax/Medicare/Medicaid), employers (health benefit premiums/workers compensation), insurance companies (protection depositories), hospitals, big pharma or other allied healthcare providers just to name a few.  They are prisons because our healthcare choices are dictated by these entities through unknowable contractual terms. These relationships are almost entirely based upon financial arrangements.   They protect us as long as we are cooperative and meet our financial commitments and follow the rules.

Studies show in 2017, Preferred Provider Organization (PPO) health insurance coverage for a family of four cost an employer approximately $27,000. The employees share was approximately $12,000. On the health exchanges the average cost for a family of four without subsidies was approximately $21,000. (No telling how comparative the policies might be.) Several studies have shown consumers over-purchase health insurance by 24%. The value of services received for this payment is highly dependent upon a well-informed consumer/patient. Transparency will arrive when it is an expectation of the consumer/patient.


I realize some will disagree.  Some will agree.  I know for sure the healthcare consumer will agree.  We have spoken to many of them.  The consumer is the only one that counts.

Let us know what you think….

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