The Great American Rip-Off
High Drug Prices...Courtesy of the FDA
The effect of the FDA-protected drug monopoly has become so apparent, that the media is reporting heart-wrenching stories of middle-class Americans who are going broke paying for their prescription drugs.
According to the March 14, 1999 edition of the Los Angeles Times, the United States' private health-care system faces a financial crisis that could result in HMO bankruptcies, increased government supervision, and temporary disruptions of medical services for millions of Americans. The March 4, 1999 issue of the New England Journal of Medicine reports that prescription drug prices have been increasing by 12 percent a year, and proposes that Medicare pay for the drugs of low-income elderly Americans.
In March 1999, a price survey was conducted of popular European and U.S. drugs to see what the actual difference was. These drugs were compared brand name to brand name. The appalling effects of the FDA's regulatory system can be seen in the chart below.
Comparison of U.S. and European Drug Prices
One wonders, "how can such a disgraceful system be tolerated in a democratic society?" One reason is that many Americans don't know how expensive drugs really are because their HMO provides subsidized, co-pay prescription drug benefits. That's about to change. The increasing price of prescription drugs is forcing HMOs to raise co-pays to $30-60.00 per prescription filled.
A growing number of Americans are facing the harsh reality associated with the cost of being ill in the United States. These people do not have insurance that pays for their drugs, and they are finding their pharmacy bill is higher than their rent.
The public is mislead into believing that high drug prices enable pharmaceutical companies to develop life saving medicines. The facts are that drug companies often spend more money on advertising than research. Many so-called "breakthroughs" are limited to making more expensive versions of existing drugs, rather than finding new molecules that would eradicate the degenerative diseases of aging. Smaller companies that attempt to introduce new medicines are stifled by the costs and uncertainties of obtaining FDA approval, while the pharmaceutical giants enjoy unfettered FDA-protection. Under the guise of consumer protection, the FDA actively prevents foreign drugs from being sold in the United States. This gives the large drug companies years to develop high-priced copycat products that are no better than the foreign drugs the FDA spends millions of tax dollars embargoing.
An example of the deleterious effects of the FDA embargoing foreign drugs is the rheumatoid arthritis drug called Celebrex. This drug works by inhibiting cyclooxygenase-2 (COX-2), an enzyme that is a critical component in the inflammatory cascade. While Celebrex is new to the United States, COX-2 inhibiting drugs like Nimesulid have been available in Europe for years to treat not only arthritis, but also certain cancers that produce excessive amounts of COX-2. (The over-production of COX-2 ignites a biochemical cascade that fuels cancer cell proliferation and suppresses immune function). American arthritis and cancer patients suffered and died because the FDA banned the importation of Nimesulid. The drug Celebrex costs $90.00 a month, while Nimesulid can be purchased for $37.80 a month. Early reports indicate that Celebrex has caused 10-12 deaths.
The March 9, 1999 issue of the Wall Street Journal reports on an FTC probe to determine whether pharmaceutical giants are fairly stifling generic competition. Generic drug prices have skyrocketed over the past five years to the extent that it costs $175.00 to buy generic Hydergine in the United States while the same quantity in Europe costs only $20.00.
A lowered standard of living is the price citizens's pay when they choose complacency in the face of obvious government malfeasance. In the case of the FDA, it's also a matter of life and death, since this agency still retains the arbitrary power to decide what medicines you are allowed to use.
Americans do not have to tolerate the FDA's rape of their health and pocketbooks. In the early 1990s, the public inundated Congress with mail about the FDA's threat to ban many vitamin supplements. The result was the passage of the Dietary Supplement Health and Education Act (DSHEA) that drastically reduced the FDA's power.
We pay outrageous prices for dangerous drugs because the FDA provides a protected market for the pharmaceutical giants. It doesn't have to stay this way. A free market would unleash a renaissance of competitive innovation that would lead to breakthrough therapies to eradicate the diseases of aging.