The Daily

Quality Fraud Drives Medical Costs

U.S. Healthcare Is A Global Outlier - In a Bad Way
U.S. Healthcare Is A Global Outlier – In a Bad Way

Daraprim was first made available in 1952. It treats toxoplasmosis and cystoisosporiasis, diseases caused by eating undercooked food and other digestive problems – often with no detectable symptoms. Turing Pharma, operated by Martin Shkreli, bought this old drug in August of 2015, immediately jacking up the price of Daraprim from about $13 a pill to $750. There appeared to be no reason for the price hike – Daraprim was old and a long recognized treatment that had not been changed in makeup or use. Shkreli nonetheless defended the extraordinary surcharge.

The price hike resulted in a public furor and a cascade of fraud charges against Shkreli.

Martin Shkreli Arrest Report

Why Daraprim Still Costs $750 a Pill

“What is it that they are doing differently that has led to this dramatic increase?” said Dr. Judith Aberg, the chief of the division of infectious diseases at the Icahn School of Medicine at Mount Sinai. She said the price increase could force hospitals to use “alternative therapies that may not have the same efficacy.” 

Similar astronomical price hikes have recently been made for other old drugs that are long established treatments for conditions like Hepatitis C and high cholesterol. There isn’t necessarily any correlation to the price gouging and any new discovery or change in the drugs’ makeup or use.

Then, there is the case of Mylan Pharma and the Epi-Pen. In September of this year, West Virginia’s Attorney General announced a fraud investigation into the allergy medicine’s pricing.

West Virginia Investigating EpiPen Maker Mylan For Alleged Medicaid Fraud, Antitrust Violations

The WV Attorney General claims that Mylan was reimbursing the State at reduced “non-innovator” rates while at the same time challenging a generic version of the Epi-Pen being offered by another company. In addition to Medicare fraud, West Virginia accuses Mylan of monopoly practices that depress competition and encourage artificially high prices.

New York has joined West Virginia in the fight against Mylan.

There is no guarantee that these States will succeed against Shkreli or Mylan. Business operators are given wide berth in making business judgments and it is not illegal to raise the price of drugs. In addition, the regulatory agencies responsible for these things are often captive to the industries they regulate – serving as a revolving door for the regulators and the businesses that perpetuates these bad practices. There is a reason for the adage about the Golden Rule: He who has the gold, makes the rules.

Where a hospital is located makes a big difference in how many of its doctors take payments from drug and medical device companies. See how your state compares and look up your hospital below.

Interactive Map Revealing Number of Doctors Receiving Kickbacks

Last summer, the largest health care fraud bust in history (three hundred people) made headlines but there has been precious little heard about the prosecution’s outcome since.

Fed’s Charge 300 In Nation’s Largest Health Care Fraud Bust

In the early 2000’s while the health care industry was becoming less responsive, more opaque and less transparent (despite Florida’s Amendment 7 being on the books), the internet was taking off and electronic medical records (EMR) mandated under HIPPA were being transitioned into the healthcare marketplace. These factors combined to create an unintended consequence: patients became more vulnerable than ever, especially in the hands of an unaccountable and largely unresponsive healthcare delivery marketplace.

The end result of this situation is an opaque healthcare marketplace that produces high costs and not improved outcomes.

U.S. Healthcare is a Global Outlier, and Not in a Good Way

“Not only is U.S. healthcare spending wildly inefficient, but it’s also relatively ineffective. It would be one thing to spend more money and get the same results, but according to the above data that is not true. In fact, Americans on average will have shorter lives than people in other high income countries.”

While it is true that he with the gold makes the rules, having an experienced lawyer in your corner can make equalize the playing field and make the difference between winning and just being another statistic.