The comedian Jack Benny, generous in private life, cultivated the stage persona of a world-class skinflint. In one of his most famous radio skits, he’s accosted by an armed robber who demands “your money or your life.”
When Benny doesn’t answer, the thug loses patience.
“Look, bud, I said, your money or your life,” he says.
“I’m thinking it over,” Benny replies, as the audience roars.
This comes to mind on reading about the former hedge fund manager, Martin Shkreli, who bought the sole source of the lifesaving drug Daraprim and raised its price from $18 to $750 per pill.
His message, to people with weakened immune systems suffering from the parasitic disease toxomoplasis, was the same:
“Your money or your life.”
In this instance, though, it was no joke.
Initially boastful of his prowess, Shkreli flinched under intense social media and political pressure and announced he would reduce the price, without saying by how much. It can be assumed the big shots of Big Pharma had been screaming at him to back off lest he become the example that finally brings down their entire racket.
But of course his is merely most extreme example of the standard business model of an industry whose ethics invite unfavorable comparison to those of the Mafia.
They charge what they think they can get simply because they can do it. There is nobody and nothing to stop them.
Earlier, the only supplier of cycloserine, a generic drug for a rare and lethal form of drug-resistant tuberculosis, had raised its price from $15 per pill to $360: a mere 24 times the original. The company responded to the resulting outcry by announcing that it would return the rights to the nonprofit that had previously owned them.
Last month, two manufacturers won government approval for new cholesterol drugs that will cost $14,100 and $14,600 a year respectively. Unlike Daraprim and cycloserine, those will need to be taken as long as patients live.
Even when life isn’t at stake, medicines seem grossly overpriced in direct proportion to how much people think they need them. The costs of drugs for ED and skin disorders are particularly conspicuous. My dermatologist once recommended one with the caveat that “Insurance will probably pay for it.” I decided to go without rather than ask even the insurance to pay $400 for a tiny vial.
Bernie Sanders, Hillary Clinton and other Democratic politicians not running for president are proposing legislation to control drug costs, which increased by more than $100 per person last year according to The New York Times. Sanders cites a common asthma drug that cost $11 a bottle last year and goes for $434 now and an antibiotic hiked from $20 to $1,849.
Generics, once hailed as inexpensive alternatives, are skyrocketing in the grasp of greedy Big Pharma.
Even people with insurance are getting hammered by larger deductibles and co-pays. My Medicare Part D plan, an AARP franchisee, is raising the annual premium by $115, or nearly 20 percent. They can read it here: Goodbye.
Clinton and Sanders would both allow Americans to import drugs from Canada and empower Medicare to negotiate drug prices for those it insures. Sanders would require companies to go public with their research and development costs while Clinton would require a minimum percentage of corporate income to be spent on research and development and set a $250 limit on monthly copays. Part of Sanders’ program would empower the Federal Trade Commission to sue companies that pay others to keep generic rivals off the market.
Those reforms are good as far as they go, although the chance of any of them passing must be rated worse than poor in a House of Representatives that holds free enterprise in higher regard than the Ten Commandments.
But it may take even stronger medicine to stop Big Pharma’s abuse of its hundreds of individual monopolies. The companies ought to be regulated as public utilities are: That means permitting them only a reasonable rate of return on investment, with suitable allowances for investment in research, development and new production, and reasonable limits on the advertising that shills for us to take costly new – and often dangerous – drugs for ailments that we didn’t even suspect we have.
The industry’s shopworn defense is that its pricing supports the finest research in the world. But without knowing exactly what they spend, that’s so much snake oil. Moreover, little of it goes to new drugs for rare diseases where the companies don’t see profits to be made.
It really is a question of our money or our lives. Enough is enough.
Martin Dyckman is a retired associate editor of the St. Petersburg Times. He lives in Asheville, North Carolina. Column courtesy of Context Florida.