For those who think that Congress should do something about the insane cost of prescription drugs, here’s a bit of news: Big Pharma just thumbed their nose at Congress over drug prices, and Congress sat there and took it. Big Pharma’s hooks are much too deep into both our political parties for anything to happen on a federal level. Ever. If any change comes, it’s going to be at the state level. And with Big Government’s tendency to stomp all over States’ rights, any change that does come will likely get squashed.
In other words, don’t expect anything to change.
Why do I say this? In part because of what happened recently when drugmaker Valeant got called on the carpet before Congress.
Shkreli wasn’t the only one to raise drug prices through the stratosphere
You probably remember hearing about Martin Shkreli on the news. He was the scumbag Big Pharma bigwig who raised the price of an obscure drug by 5000%—from a few dollars per pill to $750. There was a huge public outcry. The other Big Pharma players were quick to point the finger and criticize. He was the poster child for evil pharmaceutical companies for several months.
But even while he was being crucified in the media, all the other pharma companies were busy doing the same thing. The only difference between Shkreli and the rest of the pack is that he didn’t bother to hide his contempt for the people he was ripping off. And while the media was busy tearing him apart for raising the price on a drug used by less than 11,000 people, another pharmaceutical company had quietly raised the price on two heart drugs that are hospital staples affecting hundreds of thousands of lives.
Buying the rights to old drugs whose patents have expired and jacking the price up is the new business model for Big Pharma. This is what Shkreli did. It’s what nearly every pharma company out there is doing to some degree. And it’s what Valeant Pharmaceuticals did back in the spring of 2015. They bought the rights to two old heart drugs, Isuprel and Nitropress, that are used on a daily basis in hospitals across the country. They immediately jacked the price up by 525% and 212%, respectively.
This put hospitals in a difficult position. The two drugs had been go-to treatments for decades. Cheap and effective, they were the first thing doctors reached for in many heart emergencies. But Valeant’s predatory pricing made it unfeasible for many hospitals to use them except in the most extreme cases, and left many scrambling to find other treatments. Some smaller hospitals were priced clear out of the market. So in the wake of the Shkreli fiasco, Valeant too was called to answer to Congress for their actions.
The result would be comical if it weren’t so disgusting.
Here’s what happens when Congress tries to spank Big Pharma
The news headlines read, “Valeant Apologizes to Senate for Drug Price Hikes” but the headlines are misleading. The reality is that Valeant basically told the Senate panel to stick it. Here’s what really happened:
CONGRESS: Valeant, you were a bad, bad Big Pharma. We think you need a spanking.
Valeant: Oh Papa Congress, we’re sorry. We Made A Mistake when we jacked those drug prices up so high.
CONGRESS: I’m going to get my belt if you don’t behave.
Valeant: But Papa Congress, we offered hospitals a 30% discount, so we really only jacked the price up 495%, not 525%. We tried to be good.
CONGRESS (in the person of Sen. Claire McCaskill): Valeant, I think you’re lying. I couldn’t find a single hospital which got a 30% discount. You need two spankings now—one for being bad and one for lying.
Valeant: Oops! We’ll make it easier to get the discount.
CONGRESS: That’s not good enough, Valeant. You were still very bad.
Valeant: If you won’t spank us, we promise we’ll lower the price some, and we’ll lower it on two other drugs we jacked the price up on too. How about 30%? Then we’re still making 495% more profit than we were when we bought them but it looks like we did something. Is that ok?
CONGRESS: Well, ok. But next time you get a spanking.
Ok. I know it sounds a little silly. But believe it or not, this is basically what happened. Valeant actually tried to justify the price hikes by pointing out that they offered hospitals a 30% discount. When Sen. McCaskill protested that she hadn’t found one hospital in Missouri (her state) that had received such a discount, they promised to make it easier for hospitals to get. And when the director of a 20-hospital system in Indiana testified that his hospitals had been denied the discount too—to the tune of $900,000—Valeant offered to lower the drug price by 30%.
Thirty percent. Remember, they raised the prices on these drugs by 525% and 212%. A 30% cut is simply insulting.
Valeant then promised to get back to Congress “within weeks and hopefully sooner” about pricing the drugs “significantly lower than where they are priced now.” Of course they didn’t commit to any specific number. They didn’t even give a vague idea of the proposed price range. Instead, they said that they would “come up with an appropriate price based on an appropriate rationale.” To put that in plain English, they said:
“We’re going to charge every penny we possibly can without being criminally prosecuted.”
Valeant—and all the other Pharma piranhas—would like to pretend that moves like this are uncommon. They’d like to blame it on some rogue faction within the company. But we know better. It’s standard practice, and the goal is to gouge us and our insurers for every single cent they can squeeze out of us. Even Congress doesn’t buy their story. Senator McCaskill asked if there was a single drug Valeant hadn’t raised the price on, to which Valeant answered:
“Not in the United States.”
The whole situation is obscene. Big Pharma is immune on every front—immune from vaccine lawsuits, immune from criminal prosecution when their poisons kill people, and even immune from congressional censure over predatory pricing.
What can you actually do? Not a whole lot, in all honesty. Don’t feed the machine—don’t take any drug that’s not an absolute necessity. If we don’t feed Big Pharma it will eventually starve. Write to your Congress people and tell them that you want Big Pharma held accountable. And in the meantime, don’t count on Big Pharma potions to keep you healthy. Take your health in your own hands and keep it there.