Big Pharma Is Spending Big Bucks To KEEP Price Gouging Your Medicine

Big Pharma has been spending big bucks on their lobbyists trying to prevent Congress from taking action to stop their price gouging. Ring of Fire’s Mike Papantonio and Peter Mougey discuss this issue.

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Big Pharma has been spending big bucks on their lobbyists very recently trying to prevent Congress from taking action to stop their price gouging. We know it's out of control. But so far it isn't working, and the American citizens apparently are getting sick and tired of paying ridiculous mark-up prices.

Now, this is an incredible story because most of the time the American public is fallen right behind, certainly Congress has, has always fallen right behind the idea, "Oh, poor pharma industry. They have to do all this research and development, and they got to pay out all this money."

First of all, let me talk about those myths. A, the research and development, if it's 12%, that extraordinary. Sometimes they like to say it's as high as 20%. The real outlay you see on MSNBC, ABC-

Advertising.

-advertising at night where you're watching the news, and you see nine pharma commercials telling you that your legs are restless, that you can't sleep, you got erectile dysfunction. [crosstalk 00:01:06] Whatever it is. It's so ubiquitous. So, they're spending all that money that they want to say, "Oh, poor us. We're having to do research and development." That's the first part of it.

Second part. Most of the research and development doesn't even come from the pharmaceutical industry. It comes from the National Health Organization. It's comes from universities. Taxpayers have already paid for all this, and then all that happens is they swoop in, they make it into a cash cow drug, and they fly out of there. CEOs make a ton of money. They don't do any kind of really meaningful clinicals as far as safety anymore. They don't have to. They simply don't have to. They make $10 billion on a drug. If it kills a few people they pay out $1 billion and they go home with $9 billion. So, it a real good deal for them.

But this story, what I love about this story ... I'm not sold on this, by the way. I'm not completely-

Which part?

Well, this comes from The Hill. The part saying that they're losing, pharma is losing where it comes to telling their story, oh, poor pitiful me. What is your take on this? I don't think they're losing. My God, their mark-up is sometimes 7,000%.

All you gotta do is look at their earnings per share, and the stock prices-

Well, you do that every day.

-they continue to go up. So, I mean there's no way that big pharma's losing. I mean that's ludicrous. You just gotta look at the profits and the market capitalization. They're hardly losing. And no one questions whether they need a solid return based on the drugs they make. But at the end of the day-

7,000% though? I mean really?

But at the end of the day, there's gotta be some rationalization, some correlation between the price of the drug and what they've spent. It's no different, let's say a hurricane's coming. I mean at the end of the day, you and I both live in a hurricane alley, you got a hurricane coming. Home Depot and Lowe's and everyone else can't jack up the prices of plywood to protect your doors. You can't jack up the prices of gas. But, you can jack up the prices of pharma.

So, something that can save your life, it's okay to price gouge, but the plywood you stick on the door, the gas that you use to run your generator, that's illegal. But you can price gouge when it comes to saving your life. That's pretty scary.

Every time Congress has been asked, "Why don't you do the same thing with pharma that you do for the VA, and that is under no circumstances may you charge more than this price." Under no circumstances. So, in the last three years this has come up in one form or another at least four or five times that I can remember. It's come up to where Congress is asked to set some standards. Go ahead and give us a ceiling.