"To economists, the corruption in the pharmaceutical and medical supply industry should not be surprising. In most industries, competition drives prices down close to the cost of production, but in these sectors, government-granted patent monopolies keep prices far above costs. Drugs that would sell for $20-$30 per prescription (without any payment from insurers) routinely sell for several hundred dollars. In some cases, drug prescription prices run into the thousands of dollars. That's what you can do when the government gives you a monopoly on a drug that a patient needs to stay alive.

The basic economics of drug patents are striking. The country spends $220 billion a year on drugs. Without government patent monopolies, it would be paying around $70 billion for the same drugs, a saving of $150 billion a year. According to data from the industry, this excess spending supports $40 billion a year in drug research, meaning that the public pays almost 4 dollars in higher drug prices for every dollar in drug research.

    But the picture gets worse. According to the Food and Drug Administration, two thirds of the industry's new drugs are copycat drugs that are not qualitatively better than existing drugs. This means that the public spends more than $10 in higher drug prices for every dollar that the industry spends researching breakthrough drugs.

    Wait, it gets even worse. According to data from the industry, it costs drug companies almost 7 times as much to perform a clinical trial as the NIH."

(See Dean Baker's whole article here)

In an earlier article on his blog, Dean takes the press to task for constantly overlooking the macroscopic economic distortion that he says is a $ 300 billion annual state subsidy to big pharma, a subsidy that takes the form of a government granted monopoly on drug production and the consequent gouging of national budgets.

But Baker has only half the story. What is even worse - big pharma is not just an economic scam, it is actually at the root of our dismal state of health - quite apart from the astronomical costs. Peter Tocci, a Holistic wellness consultant and health writer, comments on Dean Baker's "economy angle" article pointing out what is really happening in the world of pharmaceutical "health".

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"Industrial parents, forced to procreate manpower for a world into which nobody fits who has not been crushed and molded by sixteen years of formal education, feel impotent to care personally for their offspring and, in despair, shower them with medicine." - Ivan Illich, "Medical Nemesis"

Dear Dean Baker,

Thank you for your summary exposition on the economics (and other aspects) of drug scams, as linked below, appearing on TruthOut. It's a must-read for everyone. Unfortunately, things gets much worse than the even-worse you decribed :-)

The ugliest truth is that the conventional medical paradigm, which informs the use of chemical drugs, is seriously flawed to begin with -- and that's no accident either.

The need for "a drug that a patient needs to stay alive" is created/exacerbated by the very presence and influence of conventional medicine (conmedicine), and by its practice. The corruption began in 19th century France with the adoption by 'science' of plagiarist Louis Pasteur's Germ Theory of Disease, a dangerous half truth, along with its corollary known as the specific-disease doctrine (the grand refuge of greedy, unstable minds).

From that double scam arose the use of chemical drugs, as well as one of the worst threats we face today -- vaccines, especially mass inoculation.
http://www.geminipress.com/symptoms4.html
And another: the abuse of antibiotics (mostly fungal toxins).

Almost all conmedical drugs are TOXINS. They are so by definition. Not only do they generally not improve disease, but usually deepen it -- even if the symptoms (conventionally called 'the disease') disappear. This is a much bigger and more evil scam than the ones outlined in your article, because it's designed to perpetuate illness, under different names (specific diseases), for 'fun and profit.' Not just capitalize on illness.

Medical drugs kill easily 110,000 people annually. Overall, conmedicine kills between 250,000 and 750,000 people annually depending on how one looks at things. And to top it off, they cure almost nothing, although to their credit they are absolutely miraculous with trauma, and very nearly as good at health-crisis intervention as they are at health-crisis creation.

And of course, as you imply, the politicians continue obediently to devise law and "health care reform" that subjugate the people to this Frankensteinian system, while the media panders and well-intentioned but misguided adults (legally) dose themselves and the kids, imagining that the worst threat is illegal drugs. It would be hilarious if ... well, if we weren't poisoning the the frogs and fishes with our drug-sopped urine, for one thing.

Here is the question: Of what interest is widespread wellness to an industry whose financial health depends upon people being sick? For more on this, please see
http://www.geminipress.com/reform.html

Thanks again for your good work.

Best,
Peter G Tocci