The Cost of Corruption is Borne by All

Bharani-PadmanabhanDr. Bharani Padmanabhan – August, 2104

Every day the media talk about the high cost of healthcare. The media go out of their way to give the impression it is due to greedy doctors who charge too much. These stories are, at the same time, accompanied by others that state that doctors are paid too little by insurance companies and have no time for their patients anymore. Where then is the money going?

The money is going to university hospitals, to drug and vaccine manufacturers, and to members of Congress. Along the way, insurance companies squeeze out a cut. Hospitals being major local advertisers, the media say only good things.

US taxpayers have funded medical research for decades. Universities convinced Congress to give them patent royalties for discoveries even when taxpayers had funded them. This became the Bayh-Dole Act. Universities got very rich as a result as can be seen in all the new steel and glass buildings they keep erecting to spread the cash amongst their various Trustees.

Massachusetts General Hospital licensed a drug which is marketed as Enbrel by Amgen. MGH and Amgen went to court over the royalties. Amgen paid MGH $186 Million to settle the lawsuit and gives MGH 20% of the $8 Billion that Enbrel brings in every year.
The early trials of Enbrel were funded mainly by taxpayers. But, if a taxpayer were to need Enbrel and cannot afford it, too bad. MGH certainly isn’t going to give it to you.

Never ever confuse doctors with hospitals.

Similarly, Congress jumped in with another gift called The Orphan Drug Act, an abominable attack on the principles of the free market. Manufacturers could take any old drug that people have been getting from their local compounding pharmacy for generations, give it a new brand name, and be rewarded by Congress with “market exclusivity” for 7 years. Even worse, the FDA will police the market at taxpayers’ expense to force the compounding pharmacies from making what they had made cheaply for decades.

A classic example of this was the recent flap over hydroxyprogesterone, an injection used by obstetricians for decades to prevent premature births. Hydroxyprogesterone from the local pharmacist costs $20 per injection. Congress gifted this drug to a company called KV Pharma which promptly charged $1500 per injection and sent strong letters to pharmacists ordering them to stop making their own under threat of FDA action. The FDA is the hired attack dogs.

This has been going on for years. In my own field of multiple sclerosis, we had a drug called 4-aminopyridine which we obtained from pharmacies for $90 every month. Congress gifted it to a company called Acorda which immediately sent cease-and-desist letters to pharmacies and priced the drug at $1056 a month.

The number of MS patients is lower than the number of pregnant women, so this came to pass silently.

In the case of hydroxyprogesterone, there was a massive backlash from pregnant women and advocates for preemies which forced the FDA to declare they would “not enforce” the cease-and-desist letters on pharmacies and that women could continue getting their $20 injections.

What this proved is that if enough people scream, Congress can be influenced in a good way. But the law remains on the books.
The Orphan Drug Act is used mainly to justify charging massive amounts for drugs. Recently Gilead Pharma said it was comfortable charging $80,000 once for treating Hepatitis C with sofosbuvir for 12 weeks because unlike other manufacturers charging $200,000 yearly for life, it actually cures the patient. Numerous people have filed suit contesting the patent itself given the $5 Billion at stake yearly. HERE

Similarly, the price of vaccines has skyrocketed to the point where many people in the US cannot afford to vaccinate their children and doctors can’t afford to give them away as in the past.

As a result, we now see the return of diseases we were sure were gone forever, like whooping cough. The CDC – “From January 1-June 16, 2014, 9,964 cases of pertussis have been reported to CDC by 50 states and Washington, D.C.; this represents a 24% increase compared with the same time period in 2013.”

Pfizer’s Prevnar vaccine brings in $4 Billion yearly, more than Lipitor or Viagra. The NY Times reported that doctors have to sign a contract stating they will keep Prevnar’s price secret or they can’t purchase it. Congress mandates vaccination for pneumoccoccus through the Affordable Care Act, Pfizer is the sole manufacturer (patent exclusivity) and charges whatever it wants, doctors can’t price-shop, people who have insurance get it, the rest don’t and Congress is happy.

Bharani Padmanabhan MD PhD specializes in treating patients with multiple sclerosis in the Boston area.