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Questioning Health Care Cost/Budget Fearmongering: Consumer Revolt Against Prescription Drug Costs Already Underway
As we discussed last weekend,
two Federal Reserve Board economists shot gaping holes the CBO’s health
care cost increase assumptions in CBO’s long term fiscal forecasts. As
technical as this sounds, these long-term cost increase assumptions are
the big driver of the much ballyhooed deficit explosion. And as the Fed
economists’ paper discussed in considerable detail, the CBO’s
assumptions on the rate of increase look indefensibly aggressive, which
in turn means the hysteria about entitlements eating the economy
deserves far more scrutiny than it is getting.
Some evidence on the pressures against health care cost trees growing to the sky comes in a new post by Wolf Richter. If you aren’t on the pharma beat, it may be news to you that drug companies are in a funk these days, and it isn’t simply that they haven’t yet found a big new blockbuster category. It it that consumers, even those who have health insurance, are revolting against drug companies either by using fewer drugs (!) or using more generics. Bluntly, consumers are so financially stressed that many are cutting back on prescription drug use. Some of this may be wise (I’ve seen too many doctors hand out drugs like candy, for instance, prescribing antibiotics for winter flus, or prescribing pain meds for dental work, when I’ve found in the few instances I actually needed relief, frequent doses of aspirin or ibuprofen work as well as Vicodin, and are less nasty) but some of it clearly is taking a real health risk. And of course, this is partly due to the aggressive way drug companies have kept putting through price increases; I’ve been amazed at the rises on pretty garden variety stuff that I take from time to time. And on the other end of the spectrum, Sanofi has caved on extortionate pricing on one of its cancer drugs, dropping its +$11,000 a month pricing by 50% after top cancer hospital Sloan Kettering said it would not prescribe it due to its high cost.
Some evidence on the pressures against health care cost trees growing to the sky comes in a new post by Wolf Richter. If you aren’t on the pharma beat, it may be news to you that drug companies are in a funk these days, and it isn’t simply that they haven’t yet found a big new blockbuster category. It it that consumers, even those who have health insurance, are revolting against drug companies either by using fewer drugs (!) or using more generics. Bluntly, consumers are so financially stressed that many are cutting back on prescription drug use. Some of this may be wise (I’ve seen too many doctors hand out drugs like candy, for instance, prescribing antibiotics for winter flus, or prescribing pain meds for dental work, when I’ve found in the few instances I actually needed relief, frequent doses of aspirin or ibuprofen work as well as Vicodin, and are less nasty) but some of it clearly is taking a real health risk. And of course, this is partly due to the aggressive way drug companies have kept putting through price increases; I’ve been amazed at the rises on pretty garden variety stuff that I take from time to time. And on the other end of the spectrum, Sanofi has caved on extortionate pricing on one of its cancer drugs, dropping its +$11,000 a month pricing by 50% after top cancer hospital Sloan Kettering said it would not prescribe it due to its high cost.
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