Unsocial medicine

For-profit healthcare continues to abandon those who need it most

Distinguishing between pharmaceutical and insurance companies appeasing shareholder profits and the efficacy of certain therapeutics and vaccines is essential for understanding health interventions. Separating the profit motive of the C Suite from researchers, doctors, and nurses is critical to understanding the complex structures of modern medicine.

Yet these differences quickly get jumbled together when the shady practices of medical companies are revealed, which happened twice this week.

The first concerns generic drugs. A Wall St Journal investigation discovered that insurers are charging thousands of dollars for what should be inexpensive therapeutics. Gleevec, which is used to treat leukemia and other types of cancer, went generic in 2016. At the low end it costs $55/month. Yet some insurance plans are shelling out over 100x that amount. The Journal found that CVS Health and Cigna charge $6,600 a month.

This greedy trend seems especially aimed at specialty drugs:

Across a selection of these so-called specialty generic drugs, Cigna and CVS’s prices were at least 24 times higher on average than roughly what the medicines’ manufacturers charge.

The entire point of generic drugs is affordability. FDA-approved medications are granted a certain exclusivity shelf life so manufacturers can recoup the expensive approval process and turn a profit. The company has 20 years from the approval of the patent before competitors can sell the drug at greatly reduced prices.

We can certainly question the validity of this process, especially when public funds are used to fund trials. That said, generics are especially important for Medicare recipients and people living on a fixed income, as low-cost drugs are crucial for older populations. Yet that seems to be at least part of the population that these companies are targeting with their heavily-inflated price tags.

As usual, the problem is middlemen. Pharmacy Benefit Managers (PBMs) are intermediaries between insurance providers and pharmaceutical manufacturers. In theory, the PBM is supposed to advocate, at least in part, for the patient. Yet PBMs sometimes own their own pharmacies, creating poor incentives for the people they’re supposed to serve.

PBMs try to pay as little as possible for drugs distributed through independent retail pharmacies. But when their own pharmacies dispense prescriptions, PBMs profit from the higher prices. 

Marking up generics is common. Mark Cuban has promised to bring drug costs down and increase transparency. In this case, the Cuban Pharmacy’s practice is a strength: all drugs are marked up 15%, plus roughly $10 in shipping and to cover labor costs. The company sells the multiple-sclerosis therapeutic, Tecfidera, for $54/month, while United Health charges $1,215. The lung cancer drug, Tarceva, runs $73/month through Cuban, and $4,409 through Cigna.

I haven’t used Cuban’s pharmacy so I don’t want to endorse it, but transparency matters—especially when major insurers show so little of it. 

A day after that story dropped, the Associated Press reported that your sinus medicine probably isn’t doing anything. 

The leading decongestant used by millions of Americans looking for relief from a stuffy nose is no better than a dummy pill, according to government experts who reviewed the latest research on the long-questioned drug ingredient.

That’s right: phenylephrine, the active ingredient in Sudafed, Dayquil, and other common OTC drugs is useless. Sadly, this was discussed as early as 2007, yet is only now coming to light.

In 2006, pseudoephedrine was pulled from shelves because too many people were Walter Whiteing it. Turns out the road from that drug to meth in a home lab isn’t that hard. And so pseudoephedrine, which is effective, went prescription-only, and phenylephrine took its place.

Discussions immediately started about the latter’s efficacy. Thing is, those discussions were far older: 

The advisers essentially backed the conclusions of an FDA scientific review published ahead of this week’s meeting, which found numerous flaws in the 1960s and 1970s studies that supported phenylephrine’s original approval. The studies were “extremely small” and used statistical and research techniques no longer accepted by the agency, regulators said.

As the new COVID boosters roll out, public health officials want them landing in arms. Sure, these vaccines have nothing to do with the above stories. But a confused and skeptical public doesn’t necessarily know that. And we can’t all bank on the Shark Tank guy to fix the chronic problems of a bloated and greedy industry.