Would somebody please call my congressman and senators at the country club and ask them to put down their golf clubs and write some drug price controls on our medical care industry? We are the only major industrial country without drug price controls on health care and it is killing us.
Some doctors in America are altruistic. They would do practically anything to help a patient. The rest of the doctors are like you and me. They want to make as much money as they can, and since we have no medical price controls they can do that.
There are some doctors who think they are entitled to earn more money than Alex Rodriguez of the New York Yankees because their work is more important. If they want to make more money than a professional athlete they leave private practice and form an association of healers. This is called a hospital. My wife had a recent hospitalization for about 22 hours of observation (no procedures, some tests) and the bill was more than $22,000.
Hospitals can charge whatever they want. Some private practice doctors can get millions of dollars for their services. But when you get control of a hospital you can take in billions.
When doctors can’t make enough at the hospital they get out their chemistry sets and start a drug company. For now, drug companies only make billions of dollars, but in a few more years we will be talking about trillions of dollars.
The doctors, chemists, and investors of a drug company hire CEOs who have a responsibility to their shareholders to maximize profits. When the CEO of Gilead, which makes Harvoni. announced he would charge $1,000 a pill for the cure for Hepatitis C (80 to 100 pills for the full treatment), it was determined to be good for the investors. It wouldn’t be fair to call the CEO of Gilead greedy but I do anyway. After all, he is only doing his job.
This systemic greed is so large that a few years ago five drug companies earned more profit than the rest of the companies on the New York Stock Exchange combined. Unfortunately, systemic greed is not self-limiting. That takes governmental action.
In the USA, the greatest country in the world, we are charging our people twice as much per capita for health care as any other industrialized country. Health insurance is now allowed to be so expensive in Oregon that nearly a third of all Oregonians need the government to buy their coverage.
During a recent speech I spoke about the Oregon Health Plan paying $83,000 for 100 Harvoni pills, which is more than a 20,000 percent profit over the cost to manufacture the pills. After my speech, a physician for the Oregon Health Plan came up to me and explained that actually the drugs cost between $80,000 and $120,000, but that the Oregon Health Plan gets the drug on sale at a 50 percent discount. I told her that’s great because nobody appreciates a good sale more than me. Imagine a $40,000-$60,000 discount, and all the company had to do is cut their profits to somewhere north of 10,000 percent.
There is an old expression in investing that says 6 percent will pull money from the moon. People that want 10,000 percent profits are from the planet Uranus. Price controls now!
— Mark Soderstrom investor and health insurance agent