What is the Price of a Child’s Health?
This last Saturday I read in the news how a Benefits Management Company raised the rates of a drug that treats a rare epilepsy in children to nearly 15 times its previous cost. It had cost $1600 before (which is not cheap) the price increase and now was up to $23,000. Express Scripts, the company in question, is the sole distributor of this drug. They claim the price increase was a decision of the pharmaceutical company that makes it. Express Scripts uses the health management model to keep prices low (right, $23,000 is low) for employers who are actually providing their employees a health plan. The question is, what would cause the cost of a drug to raise to this level? Questcor Pharmaceuticals, the company that produces the epilepsy drug H.P. Acthar Gel, changed from regular wholesale distribution of this pharmaceutical to “Specialty Pharmacy Distribution” the First of August 2007. That is when the price went up. Rates also rise for employers providing employee health care coverage using Express Scripts and they have no choice but to pay.
Yes, I suppose it’s OK for Questcor to hold a patent on H.P. Acthar Gel and make a fair profit based upon their research expense. I question how a drug could suddenly become 15 times more expensive once it has already been on the market. What I see here is monopoly practice.
Drug companies have always used the excuse, “The price of drugs is due to the expense of research and development (R & D).” However, the cost of marketing drugs is twice as much as the cost of R & D. Marketing directly to consumers has caused people to ask for drugs they don’t need, according to Melody Peterson, author of
Our Daily Meds: How the Pharmaceutical Companies Transformed Themselves into Slick Marketing Machines and Hooked the Nation on Prescription Drugs. Direct to consumer marketing has caused people to request anti-depressants even when someone is clearly going through a period of healthy grief over a loss, states Peter Breggin, who wrote Toxic Psychiatry: Why Therapy, Empathy and Love Must Replace the Drugs, Electroshock, and Biochemical Theories of the “New Psychiatry”. (It must be mentioned it is cheaper to treat symptoms than it is to give therapy and make a person well. HMOs won’t pay for much treatment but gladly pays for the cheaper drugs.) Pharmaceutical advertising has increased unnecessary medical treatment of frightened patients, claims Dr. Nortin M. Hadler in his forthcoming book Worried Sick: A Prescription for Health in an Overtreated America. (I don’t always agree with the good doctor but he makes many valid points such as the one above.)
Other Benefits Management Companies, such as CVS and Caremark also have acquired exclusivity agreements with pharmaceuticals, thus limiting distribution of the drugs in the marketplace. Maybe this is why drug prices have risen so high. A supply side system means that a limited supply will cost more than a supply that is plentiful. The basic premise of supply and demand will raise the cost. This is a flimsy excuse since the limitations are arbitrary and benefit the management companies rather than the consumer while the supply of pharmaceuticals is controlled by the manufacturers. It seems to me the private sector is simply taking advantage of a captive and helpless group of Americans.
So the question is, “What is the price of a child’s health?”