Tuesday, August 28, 2012
Profits and Kickbacks
Drug manufacturers are entitled to make a reasonable return on their investments in developing new drugs (that is the purpose of the patent monopoly, after all). But this practice definitely raises prescription drug spending unnecessarily, and is particularly trouplesome when this strategy to maintain profits takes the place of developing new drugs to replace the profits that are lost when a drug goes off-patent. The coupons are also coupled in many cases with "lifestyle" programs, such as Pfizer's "Lipitor for You" program, which includes coaching, health advice and recipes. It is illegal to give Medicare and Medicaid patients discounts to entice them to buy a particular product or use a particular service or health-care provider, under the Anti-Kickback Statute. But apparently waste in the name of maintaining private profits beyond the time the law says you are entitled to them is perfectly fine. Why?
Cross-posted on Healthy Interests