Tuesday, April 5, 2016

"Say something nice about Trump"

A reader at my economics blog asked if I had anything good to say about Trump.

So far I've seen him as a combination of Archie Bunker and Floyd R. Turbo.

I did find one thing Trump wants to change that I've been promoting in my economics newsletter for many years -- the US government pays too much for drugs for no good reason.

The drug industry has always had a high profit margin and doesn't need help.

I'm not in favor of these two government policies that drive up the cost of drugs: 

(1) Medicare pays the full "retail price" for drugs! The largest prescription drug buyer in the US pays more than in Canada, and in every other country!

(2) George W. Bush's Medicare Part D
(drug) coverage is about 85% government subsidized (2013 data) -- that means people who buy Part D coverage pay premiums that cover only 15%  of total drug costs, so they have little incentive to care about how much drugs cost.

Americans spent about $325 billion on prescription drugs last year.

Prescription drugs are only 10% of total medical care spending, but 10% is a lot because our medical spending per person is the highest in the world.

About 2% of Americans take expensive biologic drugs.

They are complex drugs made with living matter.

But they account for an amazing 40% of the $325 billion total.

Using generic biologic drugs, called "biosimilar" drugs, could save a lot of money.

There are about 450 biosimilars approved around the world, with 250 more in development.

Only 20 biosimilars are approved for use in the European Union (EU).

Only 1 biosimilar was approved for use in the US through 2015 -- and that one was first approved in 2015 (the same drug was approved in 2009 by the EU).

In February 2016 an FDA advisory committee recommended approval of Celltrion's Remsima, a biosimilar of Johnson & Johnson's Renicade.

That would make 2 biosimilars approved for use in the US.

The FDA would call that 100% growth.

I'd call this ultra-slow regulation by the FDA = it's very expensive for taxpayers ... and especially bad news for patients who can only afford the cheaper generic biosimlars .

Every time I examine how our well our government does its job, I am disappointed, and wonder why so many people want more government?