Fairy Tales Oligarchs Tell Us, Part 2!

Once upon a time, a long time ago, in a land we all know, there lived several oligarchs who forced the most vulnerable to perform the hardest jobs for the lowest wages, while often exposing them to danger. Our heroes, the workers, fought back, built unions and better days for all came for a while. And now, as we often do in this land, we are repeating history.

How you say?

We allow billionaires and oligarchs to tell us wildly imaginative fairy tales where they are sure to make themselves out to be the heroes and their reasons for unfairly treating workers, gouging customers and trying to fool Americans, while amassing great wealth is to actually “help” Americans. Yet, we never receive the help, in fact it usually hurts..

Welcome to Fairy Tales from the Oligarchs.

Fairy Tale #1 “We know how to root out corruption and fix government!”

What the fable-telling oligarchs and corporations are telling you …

1. There is great waste at many Federal agencies

2. To correct this, we are going to dramatically reduce in size, cut budgets without analysis, fire huge portions of staff or simply eliminate federal agencies. Those on the chopping block so far:USAID, The Department of Education, NOAA, FAA, US Treasury, FBI and DOJ. Stay tuned, though, many more to come!

3. We will also fire anyone who has (lawfully and ethically) offended the current president in anyway, because they were simply doing their job lawfully and ethically.

4. We are smart businesspeople ranging in age from 19-24 yrs old with a great deal of experience.

What is actually happening in reality?

1. There may, in fact be some waste in government, but some critical questions:

a. Start finding waste where waste has been proven to be located, such as The Department of Defense (DOD). DOD has not passed an audit -let’s start there with waste cutting.

b. Why is the first step to eliminate full agencies? Why not do a formal fully executed analysis and then make recommendations for improvement a phased in approach for rehab? Perhaps cut areas that may be spending too much, but not the whole agency? Why the rash, ill-founded conclusions with no evidence?

c. Why not use management consultants and forensic accountants who actually have the necessary experience and credentials to do this work and are both objective as well as actually understand government and business analysis, instead of young people making it up as they go?

d. The Musk team does not have the legal security clearances to do any of this type of work. Why not have credentialed folks with clearances do the work?

2. Musk and his team broke multiple laws. He and his interns have broken privacy laws, committed actual data theft by accessing Social Security and Financial Data and placing it on private servers. This must be prosecuted.

3. Musk is firing anyone who Trump felt was not completely loyal to him, just like an oligarchy and monarchy operates. Why break labor laws and fire people without cause? Because Trump thinks he is a king.

4. The tweets Musk is sharing about alleged waste are taken completely out of context and/or are a result of misunderstanding how the agencies work. There has been no formal forensic or business process analysis or report provided. It is premature, unfounded and there are nonexistent sources cited.

Fairy Tale #2 Pharmaceuticals are ridiculously expensive because of patents, research and advertising. Therefore, Americans just need to accept the skyrocketing costs and shut up.

What the fable-telling billionaires and corporations are telling you…

Key reasons cited by pharma companies for high drug prices:

· High R&D costs:

The lengthy and expensive process of developing new drugs, including preclinical testing, clinical trials, and regulatory approvals, can lead to billions of dollars spent before a drug reaches the market.

· High failure rate:

Many potential drugs fail during development, meaning the costs of successful drugs need to cover the cost of those that don't make it to market.

· Innovation and value:

Companies argue that new drugs with significant therapeutic advancements justify higher prices due to the potential to improve patient outcomes.

· Market competition:

In situations where a company has a monopoly on a new drug with no direct competitor, they can set higher prices due to limited market alternatives.

· Patent protection:

Intellectual property laws like patents allow companies to exclusively manufacture and sell a drug for a period, enabling them to set higher prices.

What is actually happening in reality…

The sections in quotes are from an originally published article the New York Times by Rebecca Robbins and Christina Jewett, 1/12/24

1. There is no central negotiator willing to create fairness/equity for all Americans.

The short answer is we simply do not negotiate drugs at all and we absolutely should.

“Other wealthy countries rely on a single negotiating body — usually the government — to decide whether to accept the price a pharmaceutical company wants to charge. In the United States, negotiations with drug makers are split among tens of thousands of health plans, resulting in far less bargaining muscle for the buyers.

Other nations also conduct careful analyses of how much additional benefit a new drug presents over drugs already on the market — and at what cost. If the cost is too high and the benefit too small, those countries are more willing to say no to a new drug.

“Our lack of consolidation in negotiating is a key reason that we pay more than other countries — but also this unwillingness to negotiate as hard,” said Stacie Dusetzina, a health policy expert at Vanderbilt University School of Medicine.”

2. There is no oversight on pricing and costs at all

The direct answer is there is no pricing regulatory agency overseeing the pharmaceutical industry and as a result, they are allowed to gouge customers nonstop.

“Some countries set limits on how much they will pay for medicines. France, for example, caps the growth of drug companies’ sales: If sales exceed that threshold, the government gets a rebate.

Drug companies in the United States have avoided legal restraints on prices for patients covered by commercial insurance and on introductory sticker prices when drugs first enter the market.”

“Drugs are so expensive in the U.S. because we let them be,” said Michelle Mello, a Stanford law and health policy professor. “We designed a system in terms of drug costs that is all engines, no brakes.”

3. The industry is set up to provide paybacks, kickbacks and incentives to many across the industry

The clearest example of pharma creating unnecessary revenue streams was the advent of the pharmacy benefit manager (PBMs). PBMs were created right after Obamacare was passed because both healthcare insurance companies and pharma felt like they weren’t making enough money. As a result, they built a joint venture model, called a PBM, designed to “approve” drug claims. To be clear, PBMs have no purpose, do not do anything and make both healthcare insurance companies and pharmaceutical companies a ridiculous amount of money.

Similarly, “hospitals and an array of intermediaries also see higher revenue when costs soar,” so they tend to buy into this model.

“One case in point: Under Medicare policies for some drugs, doctors pay upfront for drugs that they administer to patients intravenously in their offices, such as chemotherapy. To recoup their costs, they send a bill to Medicare for both the cost of the drug and a percentage of that cost, set by Medicare, to cover their overhead. That billing system creates an incentive for a doctor to choose a higher-priced drug. For example, a Medicare rate of 6 percent on a $10,000 drug would pay $600 — a lot more than the $6 fee paid for infusing a $100 medication.”

4. The pharmaceutical system is purposely complex and overly complicated so that no one group can decipher the costs of any one treatment.

There is no existing list of costs for treatment anywhere. No rate card. No standardization. There is absolutely no transparency into how prices are generated, the costs of components or who is responsible for each part of the system. They do have the ability to provide this, but they won’t. Infuriating.

“The system is so confusing that doctors and patients trying to decide between seemingly comparable drugs have no easy way to determine what their actual cost will be at the pharmacy counter.

Even researchers have trouble parsing the system — in particular, the complex deals made between drug makers, intermediaries and insurers — as they try to pinpoint problems and come up with solutions.”

5. Leveraging patents and their antique rules, allow prices and complexity in the marketplace to stay higher.

The original intent of a patent was to ensure the inventor or original maker of a product or service/system was guaranteed credit and because of their work, they could control how/with whom it was produced and distributed to create quality control. While there would be a period of monopoly, it would later be allowed after a period of time, for others to make similar products and make it fairer in the marketplace.

However, now …

“In the United States, drug companies have been especially successful in finding ways to prolong that monopoly period, through tactics like piling up patents to protect inventions that are only tangentially related to the drug in question.

For example, the drug company AbbVie delayed competition for its blockbuster anti-inflammatory drug Humira for more than four years longer in the United States than in Europe. Patents were a key factor: A number of AbbVie’s patent applications were refused by Europe’s patent examiners or revoked after being challenged, according to an analysis by the Initiative for Medicines, Access and Knowledge, a nonprofit that tracks drug patents.”

6. Drugs are quite simply priced at what the market will bear.

In other words, no matter how desperately sick a person or group is, rich people will always get drugs first because they can afford more. Worse, all drug costs are subject to market, not to quality-of-care standards. Infuriating.

The morals of our Oligarch Fairy Tales always are the same:

§ Oligarchs frequently tell tall tales so they, themselves and their companies can make as much money as possible, even if hurts most Americans.

§ Oligarchs have wild imaginations.

§ Oligarchs will always put their need to make money over serving the public good.

§ Oligarchs will never change.

In our next fairy tales story-hour, early next quarter we will hear about the food and education industry fairy tales as told by those oligarchs! Stay tuned.

Until then, keep fighting against the oligarchs! We are getting some wins under our belt. Keep going!

As always, if you have questions I’m right here.

Have a great week,

M.

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