One of the concerns of public policy is finding a way to deliver heath care services at a reasonable cost. There is much resistance to the creation of programs which would deliver health care services as a right because of the resistance to any and all changes by the private sector, especially the medical insurance industry (which may be eliminated by proposed Health Care for All proposals.
Prescription drugs have been high priced because Big Pharmaceutical firms hold patents for 18 years. So, during 1984, the U.S. Congress created the GENERIC DRUG industry to compete with high-priced prescription drugs whose patents had expired. The thought was that when several drug producers entered the market with their competitive generic drug product, lower prices and elimination of shortages would result. That is not what is happening today according to a “60 Minutes” CBS-TV program report broadcast on TV this past Sunday, May 12, 2019 by CBS.
The U.S. Congress received notices that a generic drug costing $60 per bottle (100 pills) suddenly was priced at $142 (a price hike of 142%!). Congress asked the Department of Justice to investigate.
(DOJ) issued subpoenas, and hearings were held (circa 2014). Connecticut’s Attorney General assigned two lawyers to investigate. It took five years to document and establish the evidence which resulted in having 40 States join Connecticut’s 500-page class action lawsuit which alleges that the executives and sales managers of the entire Generic Drug Industry were involved in price-fixing, market sharing resulting in profiteering. The alleged price fixing was being applied to over 1,200 generic drugs.
The two lawyers had gathered 19 million documents (many of which were text, phone and email records). At first, analysis of this massive data base resulted in no insights and relationships. But then, certain behavior patterns were discerned and established when phone calls and text messages were analyzed using a program developed for criminal investigations by police departments.
What became apparent was a timing relationship of text messages and phone conversations between high level management & executive staff of generic drug firms which were supposed to be competitors. Invariably, price hikes of 200% or more happened soon afterwards. They had documented all communications. These are all related to pricing hikes which based upon agreements reached over the phone and supported by texted messages. One message included the statement “We will play nice in the sandbox, don’t worry.” THIS COLLUSION IS TOTALLY ILLEGAL and will receive due process court appraisal and adjudication. A 500-page submittal has already been made to the appropriate U.S. Federal District Court.
As seems to be customary, all generic drug producers have already made public statements of not being responsible for or having done anything wrongful or illegal. It will take several years for the courts to process and adjudicate what happened and who is responsible.
The final clip of this 60 Minutes CBS-TV report reveals an outcome of these alleged price-fixing schemes. A primary care physician who directs a rural clinic which serves 14,000 low income clients, comments on the fact that this $100 billion dollar per year generics drug industry used to provide low cost prescription drug alternatives. Today many low-income heads of households must choose between purchasing needed medications or placement of food on the table or payment of rent. When the patient-client cannot afford needed generic medications, the Clinic purchases and supplies essential medications.
However, restricted budgets are forcing that rural clinic to consider closure of the clinic which serves an underserved rural community (meaning that already that community is not being served by an adequate number of physicians, nurses and allied health professionals. The ripple effect of prescription drug price fixing filters down to impoverished communities. Now imagine that clinic being in a low-income ghetto. The local Gardener Family Health Network located in San Jose, CA targets this same type of low-skilled, low income community and its CEO Reymundo Espinoza has faced these same issues.
What can our elected officials and community leaders learn from the above 60 Minute Special Report which is very timely?
The first item is that BIG GOVERNMENT is not the enemy of We, the People as stated by past President Reagan (1975). Government Agencies, such as these State Attorney General Agencies (AG’s), Federal Drug Administration (FDA), and Department of Justice (DOJ) must be provided adequate budgets to underwrite and perform appropriate levels of CORPORATE ACTIVITY MONITORING designed to locate and identify any and all corporate wrongful and illegal actions early on.
Fortunately, CA’s AG Javier Becerra has been doing a very good job for CA. It would be good if more registered voters, especially Hispanics, would tell him than they appreciate his personal values and official actions taken on behalf of We, The People.
An additional item is that participating corporate executives and management must be jailed and demoted. In the recent past, those financial industry executives who peddled DERIVATIVES plus bank executives who fired 6,000 clerks who would not create bogus loan and credit accounts designed to increase the share price of the bank (Wells-Fargo), no executive served prison time. It is not enough to force the corporation to return the ill-gotten funds by payment of a penalty for the wrongful illegal actions committed.
An essential consideration is that all monitoring and audit efforts must have knowledgeable individuals who have NO CONFLICT OF INTEREST. I note that the recent gerrymandering of voting districts is an excellent example of this self-serving action which undercuts the power of the registered voter to influence future election outcomes.
A reality is that whistle blowers need to be rewarded and protected from retaliation acts. Legislation must be crafted which become law of the land that accomplishes this task.
We, The People must support its local independent press at a higher level. EO’s annual budget since 1980 has never exceeded $1 million. Today the national press is owned and operated to generate influence and profits and to disseminate propaganda which promotes ideologies. The Trump Administration has favored those who are already wealthy, influential and possess power and dominion.
These mainstream media do not deal with local issues in an intimate manner as do the local privately owned and operated publications whose mission is to disseminate truthful, factual and useful information which empowers their readers to make better decisions in their own best interests.
If health care is to become accessible and affordable, then its costs of production and delivery must become factually known. Its cash flow must not be excessively influenced by the medical insurance industry which has a profit motive.
I have never experienced an open debate which tried to determine, “What is a fair return on investments made?” The current practice is to get as much of the available money as you can. The outcome is a very severe income disparity and wealth disparity. Our government must collect fair taxes from the ultra-wealthy by limiting tax avoidance policies and practices.
Too many corporate individuals pay no taxes at all which means that the rest of us end up subsidizing the very infrastructures used to communicate, travel, and distribute goods and services which government supports. As tax-paying stakeholders (really share-holders) we must be ever vigilant, responsible and accountable. So, plan to be involved and stay involved.
The reason WHY GENERIC DRUGS ARE HIGH PRICED is that the lack of monitoring (which is not regulatory’) was not routinely practiced. We, The People must always “Trust, but verify”. We must develop and perfect a better distribution of wealth to enable and support the American living standard we all may enjoy and experience. Keep in mind that it is the American consumer economy which has made America a Great Super-power.