The Multinational Monitor

  April 2002 - VOLUME 23 - NUMBER 4


To the editor:

Your June 2002 Editorial "Stripping Away Big PhRMA's Fig Leaf" is right on the mark.

But in addition to drug company patent abuses, let me suggest another reason why drug prices are so high: There is no free market pricing of drugs.

For a market in products to work, there needs to be: (1) customers/decisionmakers who care about price, (2) awareness of various prices so buyers can make smart decisions and (3) the ability of customers to choose among similar products. None of these exist in the drug marketplace.

First, the people who make the decision about which drug to choose (the doctors) are different from the people who pay for the drugs (individuals, insurance, the government). Doctors know little to nothing about drug prices, and in fact, they hardly care. Why should they? Doctors have nothing at stake. So the free market system completely breaks down.

Second, when insurance companies or HMOs try to bargain for lower prices, they are handicapped because they don't know what prices other companies pay. The drug manufacturers insist on confidentiality agreements, even with the state and federal governments. So companies/governments never know whether they got a good deal or not.

Finally, the ultimate consumer, the patients, have no ability to shop for drug prices. They can get a tiny discount by shopping from one pharmacy to another, but the real discounts rebates from drug companies are totally unavailable to them. And it is a rare patient who will insist on a generic drug (if one exists) when their doctor prescribes a brand name. Who wants to play roulette with their own health?

A partial solution to the problem one that can be implemented quickly is for state governments to step in and take over drug price negotiations on behalf of seniors and the uninsured. Our organization distributes model legislation to do just that, based on laws enacted in the states of Maine and Hawaii. For more information, see

Bernie Horn
Policy Director
Center for Policy Alternatives
Washington, D.C.

To the editor:

Regarding your story, "An Epidemic of Neglect Neglected Diseases and the Health Burden in Poor Countries," in the June 2002 issue:

As the relatively benign West Nile virus stalks Canada like a mangy cat, it's a good opportunity to think about immunization and its impact on the developing world.

According to author Rachel Cohen, 14 million people, 97 percent of them in developing countries, die each year from communicable diseases such as malaria, sleeping sickness and kala azar. We can add to that list measles, diphtheria, polio, tetanus, tuberculosis and whooping cough. Immunization snatches life from these diseases.

Canada is in the process of reviewing its commitment to international immunization. Five years ago, at another review point, the government decided to let the program die in a dark corner. Only citizen outrage rejuvenated it.

Let's act now. We should continue and expand immunization as one of the most cost effective of all life savers. We in Canada have a cold winter season to stop the spread of West Nile. The developing world, with far tougher cats, does not.

Randy Rudolph
Calgary, Alberta