Monday, October 5, 2015
Valeant’s Drug Price Strategy Enriches It, but Infuriates Patients and Lawmakers
Like many older adults in today's society, medications for illnesses and diseases is a necessary expense taken away from their income. However as this cost is inevitable, companies such as Valeant have made this cost immensely higher.
For example, take the case of Bruce and Susan Manes. Bruce suffers from an inherited disorder called Wilson's disease targeting the liver and nerves resulting in severe damage to both structures. Before Valeant owned the medication the Manes were paying $366 a month for his medications and since Valeant bought the medication in June it has increased the price to $1800 a month. Bruce and his wife and 55 years of age and his wife has picked up a second job just to pay for this increase in price of her husband's medication, She stated in the article saying, "My husband will die without the medicine, we just can't manage another two, three thousand dollars a month for pills."
Valeant operates by buying up already existing drugs in the market and raising the prices astronomically and buying companies and laying off their employees, instead of investing in research and development within their company and developing new drugs. In comparison to the competition, Valeant has increased their prices this year alone by 66% which is five times more than their competitors. Valeant spends 3% of its overall sales on research and development in comparison to the competition which spends 15-20%. The government is threatening to take action and the company's stocks have taken a hit recently. However, the company is not incredibly worried about the implications the government could have at this time since much of the world is focused more on the upcoming election.
The company fired back at these allegations saying that it, "prices its treatments based on a range of factors, including clinical benefits and the value they bring to patients, physicians, payers, and society." They also said that since insurance companies take most of the hit from these high prices, no one is denied the drugs that they need. However, with the increases in prices, insurance companies are beginning to stop paying for these medications since the cost is differed to not only insurers but hospitals, taxpayers, and higher premiums and co-pays for everyone.
While there are some generic alternatives for the medications that Valeant offers, most do not because of their lack of popularity for a competitive company's research and development teams. The United States unlike other areas does not have controlled drug prices, Consequently, pharmaceutical companies have relied on their high price business structure to ensure their revenues and profits.
However as Susan states and I agree, "this madness has to stop."
http://www.nytimes.com/2015/10/05/business/valeants-drug-price-strategy-enriches-it-but-infuriates-patients-and-lawmakers.html?ref=business&_r=1
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3 comments:
I think in order for these medication prices to come down, the government needs to set controlled drug prices especially since many of the medications that are sold by Valeant are not sold generically there is not other option for consumers, but to pay these high rates. It is time for consumers to stop suffering the high costs of healthcare and to be able to manage their own health through the means necessary without having to sacrifice everything to do so.
I agree with all of your points. It is ridiculous that one company is monopolizing the sector, preventing consumers from being able to receive the help they need. To say that government intervention isn't likely since people are worried about the elections is an excuse. Clearly, many individuals are being affected by these rash prices and the government needs to step in immediately. It is not fair for people with illnesses to have to pick up multiple jobs, and strain their lifestyle even more just to afford their medication. I also strongly believe that other drug companies should put more effort into R&D to differentiate themselves from Valeant, as well as so they can come up with generic brands to substitute the drug.
I find this approach by Valeant to increase prices to ultimately grow their bottom line to be very harmful to the industry overall. I understand that the cost of R&D is astronomical and that patents on drugs only last for so long so these companies try and make their money as quickly as possible. In the case of Valeant, I feel that their approach to all of this is going to eventually come to a total industry reform. Not having affordable medication/healthcare within a country makes no sense to me and I feel that given this upcoming election, we could potentially see a total reform on drug pricing in the United States.
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