Ask Brill Anything: “$77 For A Box Of Gauze Pads”

In his first video, Steve explains why US healthcare is so expensive, including a follow-up on what he found most surprising in the course of researching his excellent Time cover-story, “Bitter Pill: Why Medical Bills Are Killing Us”:

Previous Dish on “Bitter Pill” here and here. Relatedly, Trudy Lieberman recently wondered why we don’t try to reduce costs by requiring “drug makers [to] negotiate prices with the government for the drugs used by Medicare beneficiaries” – something other countries do to keep costs down:

Brill estimated that that if drug makers were paid what other countries pay them, Medicare could save some $250 billion over 10 years and, depending on whether that amount is compared with GOP and Democratic deficit reduction proposals, “that’s a third or a half of the Medicare cuts now being talked about.” Liberal economist Dean Baker, co-director of the Center for Economic and Policy Research, crunched numbers from the Organization for Economic Cooperation and Development and came up with similar savings. He found that if seniors paid the same prices as people in Canada, the federal government would save nearly $230 billion over the next decade. States would save about $31 billion and Medicare beneficiaries $48 billion. If the federal government paid the same prices as are paid in Denmark, its savings would be more than $500 billion.

But such numbers are apparently not persuasive when they’re up against the lobbying might of the drug manufacturers. According to Open, drug makers spent $152 million on lobbying in 2012, an amount that has steadily increased since 2002-2003, the time when Congress was debating Medicare’s prescription drug benefit, which handed drug makers the gift of no negotiations over the prices they charge.

Thomas Bollyky highlights another growing issue in international drug prices – patents in developing countries:

Why does Gleevec, a leukemia drug that costs $70,000 per year in the United States, cost just $2,500 in India? It’s seemingly simple. Gleevec is under patent in the U.S., but not in India. Accordingly, Novartis, its Swiss-based manufacturer, may prevent competitors from making and selling lower-cost versions of the drug in the U.S., but not in India.

Last week, India’s highest court rejected an application to patent Gleevec. While the legal issue in the case is important — the patentability of modifications to existing drugs under Indian law — the impact of the decision will likely be broader than just that issue, escalating a long-simmering fight over patented cancer medications in emerging markets.

Indonesia, China and the Phillipines are taking similar measures to amend pharmaceutical patent laws:

The measures that India and other countries have taken — compulsory licensing and adopting strict standards on patentability — are consistent with its international trade commitments, but will be corrosive to the way that pharmaceutical research and development (R&D) is funded internationally. More countries are likely to follow India’s lead. Cancer is not the only NCD on the rise in developing countries, with rates of diabetes, cardiovascular, and chronic respiratory illnesses likewise increasing. U.S. patients will not indefinitely pay a 20-fold increase on the price of medicines that Indian consumers pay.