Thursday, March 10, 2011

None of them anticipated the dramatic price hike

So, there was this system that worked pretty well. Women got the drug Makena quite cheaply, and it was available from a number of different sources. $20 per dose, tops.

Then the government decided to "help."
Who knew about conditions, safety? There needs to be a process, here. Let's regulate.

And now the price is $1,500 per dose. Many women won't be able to afford it. Here's the cool part: people are surprised.

More on the story:
KV Pharmaceutical of suburban St.Louis won government approval to exclusively sell the drug, known as Makena (Mah-KEE'-Nah). The March of Dimes and many obstetricians supported that because it means quality will be more consistent and it will be easier to get.

None of them anticipated the dramatic price hike, though — especially since most of the cost for development and research was shouldered by others in the past.

"That's a huge increase for something that can't be costing them that much to make. For crying out loud, this is about making money," said Dr. Roger Snow, deputy medical director for Massachusetts' Medicaid program.

"I've never seen anything as outrageous as this," said Dr. Arnold Cohen, an obstetrician at Albert Einstein Medical Center in Philadelphia.

"I'm breathless," said Dr. Joanne Armstrong, the head of women's health for Aetna, the Hartford-based national health insurer.

Doctors say the price hike may deter low-income women from getting the drug, leading to more premature births. And it will certainly be a huge financial burden for health insurance companies and government programs that have been paying for it.

The cost is justified to avoid the mental and physical disabilities that can come with very premature births, said KV Pharmaceutical chief executive Gregory J. Divis Jr. The cost of care for a preemie is estimated at $51,000 in the first year alone.

That's wonderful. Here's another example of that kind of reasoning: Dying of thirst is painful, and it involves...well... dying. So it's worth $250 per cup of water to avoid that. So give me a monopoly and let me charge $250 per cup of water. I'll have a slogan: "Water: It's Worth It!"

Folks: it's simple. Regulation is by and large designed, implemented, and continued because it benefits a few large corporations. The idea that regulation is supposed to help citizens is laughable. I'm surprised anyone is still surprised.

Why would anyone think that THIS TIME, this time it will be different?

Sounds like a description of Obamacare: "None of them anticipated the dramatic price hike"

(Nod to BJH)


Gerardo said...

This is a question that must have a root cause. I will propose here a possible problem and a potential remedy: Let's allow Robert Higgs to write the elementary American history textbooks and send one generation through reading those. Then we can compare if the Higgs' Cohort are more skeptical of the government objective function than the control group...

LoneSnark said...

You missed the best quote:
"Not that they have a choice: Last month, KV sent cease-and-desist letters to compounding pharmacies, telling them they could face FDA enforcement actions if they kept making the drug."

John Thacker said...

Of course, we know the solution to this problem, as Alex Tabarrok over at MR can tell you.