Help you with your prescription drugs? Not so much...

I lost my medical insurance at the end of July, and I've been trying to get along without it since then. Luckily, most of my medications are either generics or over-the-counter, so I can take advantage of low-priced prescription drug programs (I use Walgreens's program, but Walmart, Target and others have similar services.) However, two of my medications are still under patent in the U.S. and quite expensive, so rather than take my chances with an Internet drugstore, I decided to investigate the programs that are available from pharmaceutical companies.

It turns out that almost every major company has its own program, but each one has its own limits and requirements. For example, Eli Lilly, the company that's buying ImClone for $6.5 billion, has a program that provides its medications free, but my income would have to be near the poverty line. I can't file for the program alone--my doctor has to fill in a good deal of information--and Lilly requires me to include the front page of my 2007 Federal Income Taxes, along with paystubs or other evidence of my income. (I thought that tax filings were supposed to remain private.) The drugs will be delivered to my doctor, not to me or to my pharmacy, and I have to get them from the doctor. And, by the way, it'll take four weeks for Lilly to process the paperwork, and I'll have to go through the entire process again for each refill.

There's another option, Together Rx Access, which provides a discount of 25% to 40% on one of the two drugs, but doesn't cover the other one at all. After looking at the options, I've decided to go without either medication for now. If we really want to help people who can't afford their prescriptions, the Federal Government should simply make it legal for U.S. citizens to import small quantities of generic versions of expensive drugs from international sources for their own use. I'm sick of hearing drug companies point to their need to be compensated for their R&D expenses, when the major companies are incredibly profitable. In no other industry is there an expectation of compensation for failed research. If Intel goes the wrong direction with a chip design or fabrication technology, it sucks up the loss and moves forward. Are Lilly, Glaxo, or Merck really all that different?

Health care and the free market

I just finished reading a Business Week article about Eli Lilly's acquisition of ImClone Systems for $6.5 billion in cash in order to get ImClone's current cancer drug, Erbitux, and other cancer drugs under development. Cancer drugs hold a unique place for pharmaceutical companies, doctors and patients: They're typically targeted to a single type of cancer, such as lung or breast, there are often no good substitutes, and they're unbelievably expensive. Erbitux costs around $10,000 a month, while Genentech's Avastin costs up to $100,000 a year.

The prices of these drugs are inflated out of all relationship to either their cost to manufacture or develop; drug companies say that these drugs are incredibly expensive because of their development costs, but they rarely point out that they usually include the costs of drugs that never reached the market because they didn't work, were unsafe or couldn't be sold profitably. ImClone can charge $10,000 a month because without the drug, cancer patients die. Some of Europe's national health authorities are pushing back, refusing to pay exorbitant prices for drugs that often extend patients' lives by six months or less. U.S. insurance companies are expected to follow suit.

This is where we reach the fundamental limit of providing health care under a free market system. Patients will pay any price to stay alive, and under supply and demand, drug companies can charge the highest possible price to those patients. The question is whether or not that's in the best interests of society. I don't think that it is. This is a situation where pharmaceutical companies "stick it" to patients, both figuratively and literally. The people who get stuck the hardest are the uninsured, who in the U.S. pay on average 2 1/2 times as much for their medical care as those who have insurance. Even for insured patients, the prices get passed on to insurance companies, and everyone pays in the form of higher rates.

Getting a reasonable rate of return on a drug company's investment is one thing; gouging patients who have no option but to pay or die is unethical and immoral. That's where the wheels fall off.