Dr. Sanjay Gupta recently sat in for Larry King and had former president Bill Clinton as his guest. Clinton had some interesting things to say about the problem of high drug costs — driving home the point that our current system of corporate welfare for Big Pharma just isn’t working.
Here are some excerpts of Clinton’s remarks, which I’ve organized by talking point:
Americans Pay More for Less
The McKenzie Study done a couple of years ago said that we pay $66 billion a year more for medicine and that at least our older populations consume relatively less per capita than other wealthy countries.
Our Government Is Subsidizing Big Pharma
We have made a bargain with our pharmaceutical companies. We’ve said to them for decades now, we love having you in America. We’re proud of you. We know you have to spend a lot of money on research and then you market the drugs and all. So we will eat your research and development costs in American prices so that you can sell exactly the same drugs you sell to us for less money in Canada and Europe … Keep in mind, Europe has a lot of very successful drug companies and they don’t do this.
This Subsidization Does Not Help Americans
So how can we reach a different arrangement so that we keep the drug companies healthy enough and we keep them developing new medicine? The system we’ve got is not working very well. They don’t have a lot of new medicines in the pipeline … Meanwhile, we keep eating all these costs and countries just as wealthy as we are, are getting the same drugs made by the same people for less money, which is why there was so much opposition to allowing re-importation from Canada. The one good place to start is what President Obama has proposed, letting the federal government bargain [with pharmaceutical companies].
Big Pharma’s Profits Have Been 3x Greater Than Wal-Mart’s
For most of the 1990s and the early part of this decade, they earned 18 percent, which is a huge return. You know, Wal- Mart is, what, 5 or 6 percent. And it is fascinating to see that at the same time … the number of new drugs in the pipeline seems to be slowing down. So we need to examine both how we can both get the benefits of [medical] advances and how we can lower the cost to the consumers.
Clinton is right. Corporate welfare is not helping America; it’s only helping Big Pharma’s shareholders. We need to alter our course — and do it now.
Technically, what Pharma has been doing with drug prices should be seen as “DUMPING” – that is, selling drugs for less than they cost to produce in one place, while selling them at a higher price in other places.
Why won’t we hear Europe or Canada complain about American companies dumping their drugs there? Because they like the lower prices!
The only way the international trade bodies would take this up is if some nation (certainly not the US!) lodged a complaint about this practice with them…