Tuesday, April 6, 2010

Drug companies the enemy?!? (Do Over)

The first time through this was a bit rushed as I was strapped for time, and looking back, I can see that I did not really elaborate much. Really, it was just a few links and some nonsense response to them. Next time, I’ll take better care to not push something like this out. With that said, here’s a better version for you:

While the federal government (U.S.) pushed for the advancement (and ultimate passing) of the healthcare bill, they identified some key components to the ‘failure’ of the healthcare system in America. One of these components they claimed, is the health insurance companies. With very little searching online, you can quickly find negative remarks about the industry quoted from many parties (individuals, not necessarily political groups). Representative John Shadegg (R – AZ) at one time had this to say about insurance companies:

"I don't think that they [Health Insurers] are our friends, and that we ought to be protecting them."(source)

The president himself, the lead proponent of the passed healthcare reform was credited with this little nugget:

“They’re [Health Insurers] telling their investors this – ‘We are in the money.  We are going to keep on making big profits even though a lot of folks are going to be put under hardship.’” (source)

Unfortunately, this is not the only truth. Yes, insurance companies are in business to make profit. Yes, there may even be some actions on their behalf that put some people into financial hardship. But really, isn’t that was capitalism and corporate America is all about? Isn’t the point of running your own company to make lots of money? That’s the American dream! So the fact that those in the insurance industry fit this model is not a surprise.

What is surprising is that the federal leadership as failed to note the same behavior in other healthcare related industries – and worse, they have failed to take real action against it. Take pharmaceuticals, for example. Over the course of the last few years, Pfizer has gone and done what’s best for itself (and its shareholders) and not the public at large by promoting the use of a potentially harmful drug. Heck, they are even accused of lying about the FDA’s recommendations for use of the drug.

That drug is Bextra. Never heard of it? Well, neither had I until I came across this CNN news story. Google it and you’ll find lots of info pertaining to what I’m about to tell you. Almost a decade ago, Pfizer wanted to release a new Cox-2 inhibitor (painkiller), but they were blocked by the FDA when it identified an increased risk of heart attack and stroke related to Bextra.

Despite this hold up, Pfizer eventually got around to getting the drug out, approved for lesser pain such as menstrual cramps, and began raking in the profits. However, the company still promoted the product for more sever pain in an illegal practice called ‘off-label’ marketing. They actually instructed their sales people to push the benefits for which the medicine was not approved. A law firm whose target cases are those of government fraud even says this practice is actually smiled upon within the company.

Back to the healthcare debate, what was it that Obama said about the insurance industry and why we should focus the reform on that aspect of the system as a whole? “We are going to keep on making big profits even though a lot of folks are going to be put under hardship.” Now, isn’t that what Pfizer seems to have done? Only, the difference I see is that Pfizer’s actions have directly risked the lives of their customers, whereas the insurance industry has simply made it harder to get by.

Despite the ‘hardships’ insurance companies impose, think about the vast benefit they provide. Just for having insurance coverage, a single visit to the hospital is much less likely to bankrupt you (though it’s still a possibility). If you have group coverage through an employer, odds are that your bill is actually less than if you are self-insured. I’m not talking about premiums (which ARE lower in these cases), but the actual cost of care. Insurance companies negotiate contracts with healthcare providers that help increase total revenue for the doctors (by directing the insured to use them), who in turn are able to accept less in payment for the same services. While premiums may be high (and there are variances and not all companies are alike), insurance is a gamble, and should you need really need it, it will almost certainly pay for itself.

Both the health insurance and pharmaceutical industries can be very profitable, but when it comes to the big hitters, the pharma companies bring home a much larger piece of the health care pie profit. Should we really be gimping the insurance industry over them? Why not both? You may say that the health bill addresses this by increasing taxes on drug companies (which it does), but who do you think is REALLY going to pay for that? I’m putting my money on the consumer.

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