Past Programs

Thursday, September 14, 2017

BIG PHARMA: Market Failure



In our fall kickoff meeting, Women’s Voices members learned about an exciting concept for helping our country become a healthier society: a single-payer health system. Dr. Weisbart, chair of the Missouri chapter of Physicians for a National Health Program, made us laugh and riveted our attention during a fact-filled presentation. The facts left no doubt that we must change our current health care “nonsystem”:

In 2010, the United States spent 18 percent of its gross domestic product (GDP) on health care while Canada spent only 9 percent. Yet Canadians live 3 years longer on average than Americans.

The U.S. annual average per capita expenditure on health care is nearly $10,000, twice as much as that of other developed countries, yet we rank 28th in life expectancy.

In value for our money, we lag far behind other developed countries, all of which have some form of universal coverage. But we can learn from other nations, Dr. Weisbart said.  Canada’s national health insurance program, which employs public funding and private delivery, as does our successful Medicare program, is a model the United States could draw from.

Dr. Weisbart said that our current “wild west” health insurance system, with its complex mixed funding and delivery, is not only peculiar among industrialized nations but also expensively inefficient. The one segment of our system that works well for people is the Medicare program, which has far lower administrative costs than traditional insurance and gives millions of seniors access to comprehensive care. As a result, the life spans of one portion of our population–Medicare recipients–match those in other countries.

Expanding Medicare coverage to the entire population, including members of Congress, would improve Americans’ lives. With universal coverage, families and children would have the same level of care that has benefited seniors. As Dr. Weisbart acknowledged, covering more people raises fear of higher costs. Those fears, however, don’t take account of the great savings that the country would achieve under a single-payer system, like Medicare.

Twenty-five independent studies, Dr. Weisbart said, confirm that a single-payer system could fund care for all U.S. residents through savings from:

  • Increased efficiency. The government would administer only one program instead of many it runs today. States and employers would no longer have the administrative burden of financing health insurance and programs.
  • Less bureaucracy. An expanded Medicare system would dramatically reduce the cost of care by cutting overhead expenses. For example, with everyone on one plan, there would be no need for costly sales and marketing. Insurance companies currently pass millions of expenditures on to purchasers of insurance.
  • Accumulated buying power. A Medicare panel could establish a national formulary and negotiate better prices with providers and drug manufacturers.

Because drug prices drive a major portion of health care expenses, it is especially important that any new plan include measures to control current drug pricing and purchasing practices. Dr. Weisbart said the United States is the only developed country that does not regulate drug prices. “Big Pharma” (pharmaceutical companies) are allowed to set prices without restraint. Also, the Medicare Part D drug program is prohibited by law from negotiating drug prices with drug manufacturers. To keep these rules in place, Big Pharma spends huge amounts of money to employ more than 1,000 lobbyists to influence the U.S. Congress. As a result of legal price gouging and Wall Street fueling big mergers, prices for brand prescription drugs increased 264 percent between 2008 and 2015.

Dr. Weisbart punctured the myth that pharmaceutical manufacturers need to charge heavily to finance their research and development. Returns on drug sales far outpace Big Pharma’s R&D expenses, he said, and taxpayers foot the bill for 80 percent of R & D through funding to entities such as the National Science Foundation and universities.

The audience viewed the documentary, “Big Pharma: Market Failure,” which contains much more information about the corruption in drug pricing. It also focuses on how the rising cost of prescription drugs is affecting families and businesses. The average family is now spending $4,270 annually on prescription drugs. Twenty million Americans did not fill their prescriptions because of cost (2015 study). In 2015, American businesses paid $660 billion for employees’ health insurance, a figure that is projected to rise to $1 trillion by 2022 if nothing changes. Many companies find themselves declaring bankruptcy, closing, or freezing employees’ wages.

Dr. Weisbart is hopeful that the time is right for a single-payer system. Many physicians, politicians, and citizens support the model. Two bills have been introduced in Congress (HB 676 and Bernie Sanders Medicare-for-All-Act of 2017). To help him spread the word, Dr. Weisbart urged audience members to contact him to arrange a speaking event:, PNHP-MO Facebook page.

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