Big Pharma

A new study featured on MSNBC.com found that from 1996 to 2005, the number of Americans on antidepressants doubled from 13 million to 27 million, or almost 10% of the population.

According to IMS Health, in 2008 there were more than 164 million prescriptions written for antidepressants, which totalled $9.6 billion in U.S. sales. The reason this should be alarming, however, isn't mentioned in the study.

Psychologists from the University of Hull in England studied 50 clinical trials of modern antidepressants (4 Selective Serotonin Reuptake Inhibitors, or SSRIs for short, were tested including Prozac and Efexor) and found that, for mildly depressed patients, they work no better than a sugar pill. Even the results of their efficacy for the most severely depressed patients were inconclusive.

As a results of the study, Professor Irving Kirsch from the university’s psychology department has stated:

The difference in improvement between patients taking placebos and patients taking anti-depressants is not very great. This means that depressed people can improve without chemical treatments. Given these results, there seems little reason to prescribe anti-depressant medication to any but the most severely depressed patients.

The bad news doesn't end there. There is a huge collection of anecdotal evidence that SSRIs cause violent episodes and increase the patients risk of suicide. For example, both Eric Harris of the Columbine tragedy and Cho Seung-Hui of the VA Tech massacre were taking or had taken SSRI's. Because a study of 2200 children on SSRIs done by the FDA found that thoughts of suicide occurred at roughly twice the rate of a placebo, SSRIs currently have the most serious type of FDA warning: the "Black Box" label warning.

All that being said, why isn't our government doing something to protect the record number of current consumers from the potentially dangerous class of drugs? In my opinion, it again has to do with the power of money in our current political system. Courtesy of citizen.org, who produced the graph seen above, here are some interesting facts about the profitability of the drug industry:

• "it was rated the most profitable industry in 2000 and has been consistently ranked number one or two by Fortune over the past few decades"
• "Fortune reports that the 11 drug companies in the Fortune 500 enjoyed rates of profitability (measured in return on revenue) that were three to four times greater than the median for all industries in the Fortune 500. Pfizer, the second-largest drug company, has seen the value of its stock increase a stunning 1,454 percent over the last decade"
• "Public Citizen found that Fortune 500 drug companies plowed 30 percent of their revenues into marketing and administration, while committing just 12 percent of revenues to research and development"
• "The largest American drug company, Merck, had profits of $6.8 billion in 2000, which was more than the profits of all the Fortune 500 companies in the airline, entertainment, food production, metals and hotel/casino/resorts industries combined."
• "The drug industry’s success in Fortune 500 profitability rankings has become a rite of spring. In the 1970s and 1980s, Fortune 500 drug companies enjoyed rates of return on revenue that were two times greater than the median for all industries in the Fortune 500. In the 1990s, the drug industry’s rates of return on revenue were almost four times greater than the median for all industries in the Fortune 500."

In an example of what happens when the lobbyists win, all you have to do is look at Medicare Part D. By getting the now famous the-government-can't-negotiate-drug-prices-with-the-drug-companies donut hole in the program, the ten largest pharmaceutical manufacturers saw a combined $8 billion increase in their profits in just the first 6 months of the program. Also, because President Bush did not fund the program, Medicare Part D added an unfunded liability of almost 9 trillion to the national debt. Let's hope they don't get their hands on the current health care overhaul...

So, to summarize: A record number of Americans are taking a medication that may or may not be more effective than a sugar pill that has the most dangerous FDA warning because of increased risk of suicide and violence while at the same time bankrupting the nation and enriching the executives of a handful of multi-national corporations.

The Battle for Reform

A few weeks ago, Wendell Potter appeared on Bill Moyers Journel to discuss why he had switched sides from the insurance industry, where he was the head of public relations for CIGNA, to supporting comprehensive reform that includes a public option. During the discussion, he mentioned a term that I hadn't heard discussed by the media at all: medical loss ratio.

For those unfamiliar with the term, the medical loss ratio of an insurance company is the percentage of money paid in claims vs the amount of premiums collected. You read that correctly: the insurance industry considers any money paid out to cover medical expenses, their ONLY reason for existing, as a loss to the company. Does anyone still debate that the profit motive has skyrocketed out of control?

According to each companies form 10-K, here are the leading health insurance companies medical loss ratios for 2005 compiled by Physicans for a National Health Program, PNHP:

• 76.9% - Aetna
• 82.3% - Cigna
• 83.9% - Health Net
• 83.2% - Humana
• 78.6% - UnitedHealth Group
• 80.6% - WellPoint

By themselves, those percentages may not look too bad, but according to PNHP:

Whereas 10 years ago many plans had medical-cost ratios in the high 80s or 90s, now the highest percentage among large, publicly traded health insurers is Health Net, at 83.9%. Aetna, which had a medical-cost ratio well into the 90s when CEO John Rowe, MD, took over in 2000, recorded a ratio of 76.9% in 2005, Dr. Rowe’s final full year before his retirement. That was the lowest medical-cost ratio for the nation’s largest publicly traded plans.

In my opinion, the lack of this profit motive is why 82% of Canadians believe that their health care system is superior to the United States' and 70% think that their public health care system is working well or very well.

So if the majority of Americans want a public option that will force the private insurance industry to increase their MLR's or lose their customers to the public plan, why can't it get through Congress? The answer, yet again, appears to be the power of corporate lobbyists and the destructive effect of money on the democratic process. Thanks to the people over at baselinescenario.com, we now have an estimate to just how much money is at stake:

Here is how the share prices of three major insurance companies (Cigna, United Healthcare Group, Aetna) responded on Tuesday, July 28 to the Monday night announcement that the group of six senators is going to eliminate the public option from their version of the health care reform legislation [graph produced using Yahoo Finance]. We have basically an 8-10 percent gain for these companies from the Senate announcement. And as the graph below shows, the S&P 500 index (yellow) was essentially flat. The market caps of these three companies together are around $53 billion, which suggests a $4-5 billion value from the announcement by the group of 6.

So, just a preliminary announcement that the public option might be stripped from the legislation caused the market value of just these three companies to increase by $4-5 billion.

That's capitalism!

"Undemocratic" Health Care Reform

David Sirota recently offered this brilliant perspective on how Congress is handling health care reform (emphasis added):

Here we have a major congressional push to fix a health care system that leaves one-sixth of the country without coverage. Here we have 535 House and Senate delegates elected to give all 300 million of us a voice in the solution. And here we have just 13 of those delegates holding the initiative hostage.

In the Senate, both parties have outsourced health care legislation to six Finance Committee lawmakers: Max Baucus, D-Mont.; Kent Conrad, D-N.D.; Jeff Bingaman, D-N.M.; Mike Enzi, R-Wyo.; Charles Grassley, R-Iowa, and Olympia Snowe, R-Maine. The group recently announced it is rejecting essential provisions like a public insurance option that surveys show the public supports. Meanwhile, seven mostly Southern House Democrats have been threatening to use their Commerce Committee votes to gut any health care bill, regardless of what the American majority wants.

This, however, isn't about the majority. These lawmakers, hailing mostly from small states and rural areas, together represent only 13 million people, meaning those speaking for just 4 percent of America are maneuvering to impose their health care will on the other 96 percent of us.

Census figures show that the poverty rates are far higher and per-capita incomes far lower in the 13 legislators' specific districts than in the nation as a whole. Put another way, these politicians represent exactly the kinds of districts whose constituents would most benefit from universal health care. So why are they leading the fight to stop - rather than pass - reform?

Because when tyranny mixes with legalized bribery, constituents' economic concerns stop mattering.

Thanks to our undemocratic system and our corrupt campaign finance laws, the health care industry doesn't have to fight a 50-state battle. It can simply buy a tiny group of congresspeople, which is what it's done. According to the Center for Responsive Politics, health interests have given these 13 members of Congress $12 million in campaign contributions - a huge sum further enhanced by geography.

I typically don't just copy and paste a story, but I felt that this one needed no editorializing.

Socialism?

I put together the table below during the election campaign to show the Republican's hypocrisy at calling now-President Obama a "socialist" and implying that his entire economic agenda was to "spread the wealth around," when they themselves were the beneficiaries of Bush's spreading the wealth around over the previous 8 years. What it shows is the ratio between federal spending and taxes paid per state for 2005, according to the census data and compiled by The Tax Foundation (I added the color coding of green being net beneficiaries of a progressive tax code and red being the net contributors), and how that state voted in the 2004 and 2008 elections.

As the debate over a strong public option rages in Congress and Republicans (or conservative Democrats) again use phrases like "government take-over" and "socialized medicine," check to see what state they are from. Odds are, if it's coming from a Republican, they couldn't be more hypocritical of what government can do.

The picture above comes from Nate Silver's blog, FiveThirtyEight, and shows the relationship between Support for the Public Option and Insurance PAC Fundraising, further broken down by party affiliation. His graph came from some comprehensive, proprietary number crunching but he isn't usually that far off.

It's a sad commentary on our political system and an should be seen as an urgent call for campaign finance reform.

Senator Dick Durbin: "[The Banks] Own the Place"

This audio clip from Dick Durbin is a few months old, but as Congress breaks for the summer recess, with the Senate failing to bring new health care legislation to a vote, I feel it's more relevant than ever. Why is it that any meaningful, progressive legislation get's either filabustered into obscurity or watered-down by the Republicans or Blue Dog Democrats until it's impotent? Personally, as Sen. Durbin agrees, I blame corporate lobbyists. In the clip, Mr Durbin articulates why passing any banking legislation is doomed to failure. This time the poor quality is not my fault:



For those not familiar with Dick Durbin, he is the current senator from Illinois and Senate Majority Whip, the second highest position for the Democratics in the Senate. He was also voted one of "America's 10 Best Senators" by Time Magazine back in 2006.

For a great overview on corporate lobbying totals for just the first quarter of 2009, check out this link or, for a more comprehensive look at the influence of ALL money in politics, check out Open Secrets. Once you learn how much money the wealthy and corporations spend to influence our elected representatives, you'll understand why campaign finance reform should be priority number one.