Initially, I think I moved from outrage to just kind of sick to my stomach as I stumbled onto the story that I'm about to convey to you. It is about a drug company. This company apparently thinks nothing of exploiting desperate cancer victims and their families.
A couple of years ago I stumbled across a drug company called Dendreon. Dendreon first popped up on my radar screen when the stock had gone from something like 4 dollars to 40 dollars in the space of 24 hours. Wild gyrations. Stocks that trigger wild gains like that tend to grab my attention. Dendreon it seems, had invented a drug for the treatment of prostate cancer which was highly effective. Ultimately, I never bought Dendreon stock and after just a few days of watching it, I simply forgot about it. Today while making my rounds, I came across this comment on "naked capitalism" (the commenter mis-spells the company name):
Buried under the news about retail investors in the Dow getting whacked over the head with margin calls from their broker was this little factoid. The biggest single loser was a company called Dendron @ -65%. They produce a drug that is highly successful in combating prostate cancer. Since it is so effective they concluded that they could extort $95,000 for two treatments from men with potentially terminal cancer. Problem is, doctors won’t proscribe it because they don’t believe the pee party gubmint will honor their invoices and they will be stuck trying to extract the cost from the estates of the men who died anyway of heart attacks and old age. Once word got out that they couldn’t sell Provenge for a kings ransom, “investors” ran away leaving the company to drop dead on the bloody floor of the Nasdaq.
Wonderful health care system we have. Is it any wonder that we rank #37 in the world, immediately below that well known Narco-state, Columbia?
After I read this comment, I verified that it was essentially true. Here is one of the stories I came across. From Barrons: http://blogs.barrons.com/stockstowatchtoday/2011/08/04/high-flying-dendreon-plummets-more-than-60-on-weak-provenge-sales/?mod=google_news_blog
I believe in free market capitalism. I define that as free markets with an absolute minimum of government intrusion. Drug companies lobbied government long ago, creating and enacting laws so that new drugs could be "patent protected" for what is currently twenty years. This has encouraged and enabled drug companies to bring new drugs to market- free from the fear that their compounds could be duplicated and sold at lower costs. Patent protection encourages drug companies to research and develop new drugs with the assurance that they can recover costs and make a healthy profit before their patent expires. Mostly, this is a good thing I think. A snip:
TRIPS agreement (applies to drugs after 1989) gives 20 year protection. Prior to that it was 16 years.
In many jurisdictions, pharmaceutical patents are elegible for patent term extension. For example, in USA, a patentee can get an extension of up to 5 years for a specific product o process (not the full scope of a claim) beyond the 20 year term for an FDA approved product. Variations on such extensions exist in many but not all jurisdictions.
I understand the need for patent protection. The problem shifts from recovering research and development costs and a reasonable profit- to absolute price gouging and greed. Government engages in all kinds of crony capitalism but what it doesn't engage in is capping what a drug company can ask or demand for it's product. Dendreon knows this. So what Dendreon did is price it's product so ridiculously high that nobody can afford it. They sought price discovery and realized that 90-100k had been excessive. At the nominal cost of a house here in Boise- doctors won't even prescribe it. This is one of the many reasons that our health care costs are spiraling out of control. We rank 37th in the world in terms of health care and our costs are 200-300%% higher than the next closest country. And if you are one of those health professionals living in the past and thinking that the U.S. is still the king of health care- I will point you to the latest findings of the World Health Organization. http://www.who.int/research/en/
The good news for Dendreon is that they have a gigantic market. All they have to do is re-price this drug within reason rather than bankrupting everyone who needs it. Show a little mercy and decency. Clearly those human qualities have been missing from their business plan. The truly bizarre question in my mind is... how did Dendreon come up with a 93 thousand dollar price tag? I'd like to see the math that justifies that price.
In America we were once taught to to do what was morally and ethically right. In today's world, those standards no longer exist. The only standard that exists now- is whether the act is permissible by law. If it is- then screw dying cancer patients and families. This is our price. One hundred thousand dollars, more or less. If Dendreon is a glimpse of what the future holds- God help us all.
Dendreon is proof positive that given a green light and protection to steal by the U.S. Government- companies can and will. Dendreon- you will not receive my "humanitarian" of the year award. This is not your finest hour. Somewhere, a collective body of people need some human decency. This is Dendreon's home page. They paint themselves humanitarian- as long as you have their admission price. Think about what they charge as you read their hopeful prose. http://www.dendreon.com/