NB: Can one sense the burning smell of the pants of CEO Bourla? A plan
for Medicare to negotiate drug prices with manufacturers and to allow
prescription drugs to be imported from Canada does not introduce "the
black hole of the federal budget to do other things" but rather uses
Smith Wealth of Nations capitalist price negotiation between buyer and
seller, unless Bourla wants the "libertarian" view in which case each
individual buyer has to negotiate "one on one" with the seller (Pfizer
or other entities in Big Pharma. But, as with most profiteers and
exploitationists posing as "laissez-faire capitalists" who refuse to let
the free (not captive) market work (unless the "market" increases the
profit of the profiteer).
https://news.yahoo.com/pfizer-ceo-blasts-americas-drug-pricing-system-145734621.html
Yahoo Finance
Pfizer CEO blasts America's drug pricing system: 'We have a problem here'
Adriana Belmonte·Senior Editor
Thu, October 28, 2021, 7:57 AM
Prescription drug prices have become a key target of criticism by those
calling for reforms to the U.S. health care system.
Upon taking office, President Biden vowed to lower these prices. His
plan called on Congress to allow Medicare to negotiate drug prices with
manufacturers, allow prescription drugs to be imported from Canada,
impose an out-of-pocket spending cap for those on Medicare, and limit
annual price increases.
Unfortunately, the plan was dropped from the latest White House spending
bill after key Democrats objected to it. And according to Pfizer (PFE)
CEO Albert Bourla, politicians are going at it from the wrong angle anyways.
“The issue of drug pricing is a real issue in the U.S.,” Bourla said
during Yahoo Finance's All Markets Summit. “But it is not the issue that
some people think and present.”
According to a January 2021 report from the RAND Corporation,
“prescription drug prices in the United States are significantly higher
than in other nations, with prices in the United States averaging 2.56
times those seen in 32 other nations.”
The U.S. spends significantly more on prescription drugs than any other
nation. (Chart: RAND Corporation)
The U.S. spends significantly more on prescription drugs than any other
nation. (Chart: RAND Corporation)
That gap increases to 3.44 times as much as other countries for
brand-name drugs.
“We have a problem here,” Bourla said. “The Americans are paying for
their medicines like they don’t have insurance, although they do have
insurance. And this needs to change. This needs to make sure that this
will not be the case moving forward. I’m sure if they have to pay less,
that will be a cost and the system will have to absorb the cost. Who is
paying for that cost?”
'Very, very high' out-of-pocket drug costs
Bourla's argument is that prescription drug prices only account for a
fraction of overall health care spending in the U.S.
“The total cost of medicines to the health care system represents 12%,”
Bourla said. “This is how much the employer, this is how much Medicare
pays to us in terms of how much it pays to hospitals, physicians,
everybody else. So by definition, this cannot be the big problem when we
are 12%.”
Bourla also noted that prices have been going down. For example, in the
first six months of 2021, Pfizer saw a 5% decrease in net pricing of
medicines in the U.S., which is a trend that has been happening for a
few years now.
“I’m sure the patients taking our medicines didn’t experience this -5%,”
Bourla said. “They experienced 2, 3, 5, 10, 20% sometimes increases in
how much they have to pay … for the cost of the medicine. The two are
not connected.”
Demonstrators protest pharma companies' lobbying against allowing
Medicare to negotiate lower prescription drug prices in Washington, DC,
September 21, 2021. (Photo by SAUL LOEB/AFP)
While prices may have gone down, this hasn't benefited consumers much.
According to the Government Accountability Office (GAO), prescription
drug spending has increased over the years.
"For example, retail prescription drug spending was estimated to account
for nearly 12% of total personal health care service spending in the
United States in 2019 (up from about 7% in the 1990s)," the report stated.
A separate report by the IQVIA Institute for Human Data Science found
that patients paid a whopping record of $67 billion out of pocket for
prescriptions filled in retail pharmacies in 2019.
Bourla stated that the pharma industry is willing to step up and "pay
our fair share, pay even more than our fair share" as long as it
benefits patients struggling with out-of-pocket costs.
“Where we disagree is policies that will take all the money from the
pharmaceutical industry and move them to the black hole of the federal
budget to do other things," he said. "This is not the issue right now.
The issue is the out-of-pocket costs of patients, which are very, very
high. That’s what we need to address."
Adriana Belmonte is a reporter and editor covering politics and health
care policy for Yahoo Finance.