Beyond The High Prices Of Prescription Drugs: A Framework To Assess Costs, Resource Allocation, And Public Funding.

During the past century, an accumulation of laws, organizations, and policy mechanisms has led to increasing transfers of public funds to private drug manufacturers, straining budgets and enabling industry revenues beyond what markets could ordinarily sustain. Tax benefits and fee waivers subsidize industry research, while public institutions and charities help fund the creation of new products and pay for their use once they are approved. New exclusivities increase prices by delaying competition, and payment programs such as Medicare Part D help guarantee that prices will be paid no matter how high they rise. Members of the public thus pay for pharmaceuticals in more ways than is commonly recognized. This article provides a more comprehensive framework for legislators and scholars to use in assessing the total societal costs of drugs. Greater transparency is needed to clarify individual drug costs, facilitate appropriate resource allocation, and ensure that the amount of public funding is justified by the value of the drugs. Congress should direct the Government Accountability Office to study public contributions underlying the highest-cost drugs and should require periodic reporting by drug manufacturers of the direct and indirect public funding they receive.

Pharmaceuticals as a market for "lemons": Theory and practice.

Drawing on economic theory and institutional analysis, this paper reframes Akerlof's theory of how a market for lemons operates and argues that each of the many markets for lemons must be studied empirically to document how different stakeholders cope with the problems of information asymmetry, secrecy, and power. Such markets are a new field for sociological analysis. To illustrate, the paper characterizes pharmaceuticals as a multi-tier market of information asymmetry in which actors in each tier have substantial control over how much they disclose about hidden risks of harm. Such a market rewards the production and sale of "lemons." Current incentives and institutional practices reward developing a large number of barely therapeutically innovative drugs and ignoring their often hidden or understated harmful side effects. They reward designing and executing substandard, biased trials that mislead the FDA and regulators abroad to approve new drugs without clear evidence of their degree of harm. Approved drugs are likely to be "lemons" but promoted as "safe and effective." The result is substantial hospitalizations and deaths from adverse drug reactions. A "risk proliferation syndrome" of institutional practices maximizes sales, profits, and exposure to toxic side effects. An "inverse benefit law" of marketing operates as companies try to maximize sales. The probability of benefits decreases but the chances of lemons adverse events do not. The details presented here deepen understanding of how markets for lemons thrive on information asymmetry, secrecy, and power. Lessons can be applied to other markets.

Addressing Health Care Disparities: A Radical Perspective and Proposal.

This paper begins by rethinking the sociological theory that social conditions are fundamental causes of health disparities and that controlling disease ironically increases or creates them. While usually true, the radical proposal of non-profit health care and pharmaceutical development could ameliorate health disparities if a nation like Canada or a region like the EU looked to radically different but successful models such as the Drugs for Neglected Diseases initiative. It uses what could be called entrepreneurial collaboration for public health markets and inverts intellectual property to public health IP to maximize health gain instead of profits.

Manufacturing costs of HPV vaccines for developing countries.

BACKGROUND: Nearly all of the 500,000 new cases of cervical cancer and 270,000 deaths occur in middle or lower income countries. Yet the two most prevalent HPV vaccines are unaffordable to most. Even prices to Gavi, the Vaccine Alliance, are unaffordable to graduating countries, once they lose Gavi subsidies. Merck and Glaxosmithkline (GSK) claim their prices to Gavi equal their manufacturing costs; but these costs remain undisclosed. We undertook this investigation to estimate those costs. METHODS: Searches in published and commercial literature for information about the manufacturing of these vaccines. Interviews with experts in vaccine manufacturing. FINDINGS: This detailed sensitivity analysis, based on the best available evidence, finds that after a first set of batches for affluent markets, manufacturing costs of Gardasil for developing countries range between $0.48 and $0.59 a dose, a fraction of its alleged costs of $4.50. Because volume of Cervarix is low, its per unit costs are much higher, though at comparable volumes, its costs would be similar. INTERPRETATION: Given the recovery of fixed and annual costs from sales in affluent markets, Merck's break-even price to Gavi could be $0.50-$0.60, not $4.50. These savings could support Gavi programs to strengthen delivery and increase coverage. Outside Gavi, prices to lower- and middle-income countries, with profit, could also be lowered and made available to millions more adolescents at risk. These estimates and their policy implications deserve further discussion.

Institutional corruption of pharmaceuticals and the myth of safe and effective drugs.

Over the past 35 years, patients have suffered from a largely hidden epidemic of side effects from drugs that usually have few offsetting benefits. The pharmaceutical industry has corrupted the practice of medicine through its influence over what drugs are developed, how they are tested, and how medical knowledge is created. Since 1906, heavy commercial influence has compromised congressional legislation to protect the public from unsafe drugs. The authorization of user fees in 1992 has turned drug companies into the FDA's prime clients, deepening the regulatory and cultural capture of the agency. Industry has demanded shorter average review times and, with less time to thoroughly review evidence, increased hospitalizations and deaths have resulted. Meeting the needs of the drug companies has taken priority over meeting the needs of patients. Unless this corruption of regulatory intent is reversed, the situation will continue to deteriorate. We offer practical suggestions including: separating the funding of clinical trials from their conduct, analysis, and publication; independent FDA leadership; full public funding for all FDA activities; measures to discourage R&D on drugs with few, if any, new clinical benefits; and the creation of a National Drug Safety Board.

Life on the Edge: Immigrants Confront the American Health System.

On the basis of a study of forty health care delivery institutions in Florida, California, and New Jersey, this paper examines the interaction the immigration and health systems in the USA. We investigate barriers to care encountered by the foreign-born, especially unauthorized immigrants, and the systemic contradictions between demand for their labor and the absence of an effective immigration policy. Lack of access and high costs have forced the uninsured poor into a series of coping strategies, which we describe in relation to commercial medicine. We highlight regional differences and the importance of local politics and history in shaping health care alternatives for the foreign-born.