I found this article interesting--

[askater11]

I think the prices of RX's are outrageous!!!!! The people that most need the RX's--our elderly---can't even afford them.

http://www.calnurse.org/cna/calnursemay01/corpwtch.html

'Nursing shortage' linked to frenzy of drug industry mergers

The economy may be ailing, "but the drug industry is the picture of health," declared the Wall Street Journal April 26. Indeed it is. Last year the recently merged pharmaceutical giant GlaxoSmithKline sold $29.6 billion worth of pills and serums for a profit of $3.7 billion. Its chief competitor Pfizer took in $27.5 billion and realized a profit of $5.6 billion. Much of this bounty of corporate profits is fueling an unprecedented frenzy of merger and acquisition activity, concentrating the industry into fewer and few hands and facilitating monopoly price setting. Meanwhile, as the general economy deteriorates, the cost of healthcare in the U.S. continues to soar, driven in large part by escalating prices for medicine and medical supplies.

And now comes a new, landmark study linking this wave of pharmaceutical industry mergers to rising prescription drug costs and on to cutbacks in hospital nurse staffing.

The study, released a few weeks ago by the Institute for Health & Socio-Economic Policy, draws attention to and documents a direct link between pharmaceutical corporate merger activity, restrictions on patient access to quality care and hospital staffing ratios.

The IHSP study was undertaken at the request of Congressmember Dennis J. Kucinich (D-Ohio) and presented at the nation's capital May 2.

"Our findings are disturbing," said study author and IHSP Director Don DeMoro who made the presentation on Capitol Hill. "Hospitals expect to lay off nurses in the midst of a national hospital nursing shortage, and Medicare patients may have even less access to needed prescription drugs - all while the pharmaceutical industry becomes dominated by a handful of corporate giants who are making record profits."

"Escalating drug prices - not the reductions in Medicare reimbursement rates, as many contend - are the primary culprit in lower revenues and profits for many hospitals and managed care plans that have encouraged cost cutting in the form of staffing cuts and service reductions," said DeMoro.

"Our findings will be a warning that the nursing shortage is going to worsen if rising pharmaceutical costs are not controlled," said Kucinich.

While drug prices in Europe and Japan are subject to government price constraints and the purchasing power of state-run healthcare systems, they are not controlled in any way in the U.S. While the multinational pharmaceuticals make considerable profits abroad, the recent huge leaps in their profit making are traceable in the main to the prices being charged in the U.S. market.

At the heart of the IHSP study is a comprehensive analysis of the staggering economic and social effects of the pharmaceutical industry merger and acquisition binge of recent years - augmented by a scientific survey of hospital executives on how they are responding to the exploding prescription drug prices.

Rep. Kucinich's office conducted the phone survey contacting 100 targeted hospitals across the U.S. delineated to assure an appropriate geographic, urban and rural balance.

Overall, 68 percent of the hospital executives responding - and over 75 percent of those in the Midwest and South - indicated that hospital staffing levels are put at risk by increases in drug prices. "In the current context of an already woefully inadequate caregiver staffing level such assessments by high-level hospital administrators may portend a clear and present danger to the public health that the nation can ill afford to ignore," says the report.

The rapid spiral of pharmaceutical merger and acquisition activity, and a corresponding jump in drug prices, DeMoro said, "came on the heels of a 1994 change in U.S. anti-trust law that granted extraordinary latitude to merging healthcare corporations, ostensibly to encourage competition."

The effect has been consolidation, not competition. The cost of the 227 drug company mergers with publicly announced prices since 1993 adds up to $270 billion in year 2000 dollars, enough money to pay for about 70 percent of the annual total costs for all inpatient hospital care in the U.S.

Today, 50 firms control two-thirds of the world pharmaceutical market, and the top 10 U.S. companies make up about 40 percent of the domestic market. Publicly traded pharmaceutical firms with over $1 million in net sales totaled more than $411 billion in total net sales and $43.6 billion in profits last year.

Pharmaceutical companies are now the most profitable business in the country. Since the beginning of 2000 the drug industry has outperformed the average for the stockmarket by 41 percent. According to Forbes magazine the average compensation for 12 drug company chief executive officers in 1998 was $22 million.

Moreover, huge tax benefits allowed drug companies to lower their average effective tax rates by nearly 40 percent relative to all other major U.S. industries between 1990 and 1996. Federal subsidies substantially reduced the pharmaceutical industry's costs for research and development.

Increased consolidation and market power has led to a dramatic escalation in drug costs, according to the IHSP. Prescription drug costs accounted for 8.2 percent of all healthcare costs in 1999-up from 5.8 percent in 1994, the year anti-trust rules were relaxed.

The price increases have been accompanied by a massive increase in pharmaceutical marketing and advertising intended to stimulate consumer consumption. In 1998, $1.3 billion was spent on consumer marketing. Television advertising for drugs alone has jumped 20 percent since 1994. The $136 million spent by Schering-Plough in 1998 to advertising the allergy medication Claritin would have been sufficient to employ about 3,230 Registered Nurses.

This year, drug prices are expected to rise 17.5 percent, and the most commonly used drug prices are going up at twice the rate of inflation. A report in the journal Health Affairs found that drug spending accounts for 44 percent of the 1999 increase in health costs.

Hospitals and Health Maintenance Organizations (HMOs) have incurred the effects of the mushrooming drug costs, but also readily participated in passing the pain along to their respective patients and plan members, says the IHSP.

Though aggregate hospital profits have totaled about $178 billion since 1986, they have declined the past two years. A number of hospitals, especially small, independent hospitals, are now experiencing financial distress, and a number have closed or scaled back services, requiring longer patient waits for care.

The hospital survey by Kucinich's office found many administrators publicly conceding that increases in drug prices may lead to future reductions in staff-to-patient ratios. This, the IHSP notes, is despite the "nationwide nursing shortage that sees no foreseeable end in sight." It adds that the survey suggests that "drug prices may have been a significant factor in past hospital industry decisions" to cut staff.

In the early 1990s, HMOs were aggressively recruiting Medicare recipients, with an emphasis on the healthiest and economically secure patients. That practice has sharply reversed course with increasing numbers of HMOs deserting the Medicare market. The IHSP report predicts that HMOs will respond to increasing drug prices by dropping even more Medicare patients, restricting the number of available drugs and passing along costs to consumers in the form of higher co-pays and to hospitals with whom they contract.

Seniors, who consume 28 percent of all prescription drugs, have borne the biggest brunt of the pharmaceutical industry merger binge and rising drug costs, the IHSP says.

The average drug cost for each senior citizen in 1999 was over $1,200, and is expected to increase to $2,800 per by 2010. Some 13 million Medicare beneficiaries have no prescription drug coverage, and seniors, as a group, tend to fill one-third fewer prescriptions and pay twice as much out-of-pocket costs as other population groups.

For a copy of the complete study, "Big Pharma:" Mergers, Drug Costs and Health Caregiver Staffing Ratios, Click Here

[gwenith, BSN, RN]

This is not just an American story it is a world wide story as the big companies also take a choke hold on the world market.

The World's No.1 Science & Technology News Service

WTO drugs deal for poor nations flounders

15:10 29 August 03

NewScientist.com news service

The World Trade Organisation's executive failed at the last moment to finally approve a deal to give some of the world's poorest countries access to cheaper drugs.

The deal was described by diplomats as being "in the bag" on Thursday morning, after intense negotiations led to agreement between the US - home to many of the world's largest drugs companies - and Brazil, India, Kenya and South Africa.

The WTO's executive was expected to rubber-stamp the ruling late on Thursday, but last-minute requests for clarification of the agreement from several other nations in the 146-member body, including Argentina and the Philippines, stalled the ruling.

"There is no deal. More consultations are required," WTO spokesman Keith Rockwell told reporters, following the adjournment of the talks in Geneva on Friday. "It became clear that people had different perspectives on the text."

The issue centres on access for poor countries to cheap generic versions of patent-protected drugs for diseases such as AIDS and malaria. Currently, patents generally prevent cheap copies being made for up to 20 years, allowing pharmaceutical companies to recoup their research and development costs. But this makes the drugs completely unaffordable in many countries

In 2001, an agreement was reached allowing countries that can to manufacture drugs, such as India and Brazil, to bypass patents in the case of a health emergency in their own country.

But a WTO ruling to allow developing nations without a domestic drug industry to import these cheap drugs was scuppered by the US in December 2002. US pharmaceutical companies cited fears that poorer nations would use the ruling to manufacture cheap versions of drugs and then illegally import them to developed nations.

However, on Wednesday the US finally agreed to drop its opposition in return for an accompanying statement laying down further conditions to prevent the drugs being smuggled back to the West, such as special packaging or different coloured tablets.

But medical and humanitarian organisations criticised the proposed pact, saying it laid down too many requirements for developing nations.

"The text contains so much red tape and so many obstacles that developing countries would still struggle to get access to cheap medicines and thousands of people would continue to die unnecessarily," said Celine Charveriat, Oxfam's head of advocacy, speaking to the Associated Press.

WTO delegates hope to re-open discussions on the issue at the ministerial meeting beginning on 10 September in Mexico. Observers say the two-year struggle to find a solution to the public health crises suffered by the poorest nations has damaged public perceptions of the WTO's trade talks.

Gaia Vince

The giants are getting greedy and the little people are getting poorer.

[oramar]

WOW!