President Trump made grand promises to fix US healthcare. The reality is Trump like Obama got out foxed by the FDA and the drug industry. Vested interests wrote the repeal legislation as they did with Obama care. In his desperation to get healthcare legislation approved Obama made some serious compromises. Obama did not involve himself in the nitty gritty details. The result is that a band of vested interests slipped in some clever legislation that benefited them. The same pitfalls fell on president Trump who out sourced it to Paul Ryan and his merry band of vested interests.
Both presidents preferred to deal with the issues of who is covered, pre-existing conditions, tax incentives and the like. This is nothing but smoke and mirrors when the real issue is why is our healthcare so very expensive.The failure of the Ryan care or Trump care plan illustrates a fundamental failure. The need to address the cause of expensive healthcare. Why is that we can get high quality consumer goods but not healthcare? Lack of competition and a bureaucracy run amok. That is what.
What the vested interests have done is create a monopoly using the cover of consumer safety when nothing could be further from the truth. A significant number of Americans use alternative health treatment options and natural remedies. Many of them have a poor opinion of the FDA and its extreme drug controls.
This Harvard article says “ Because the Food and Drug Administration (FDA) is the regulatory body with the most powerful influence over the health of the American population, how the Agency addresses alternative medicine will be central to developing the role that it plays in American health care. So far, however, FDA has not demonstrated foresight in this area. Through its actions, inactions, official statements, and propaganda, FDA has displayed a simple lack of coherent policy toward alternative medicine. “
A 2009 Harvard report says nearly 45,000 American die from lack of healthcare. Despite more coverage since then, more Americans find healthcare unaffordable according to this CNN article. The NY Times says people would rather pay a fine than buy medical insurance. The boom in medical tourism destinations from one of our previous articles show that a well organized system can deliver low cost high quality medical care.
DRUG MONEY LEADS TO CONGRESS
The direct causes of expensive American healthcare are many, but it boils to the actions of two organizations, the FDA and the drug industry who have been aided and abetted by Congress. Last we checked, nearly every single member of congress took money from the drug industry and that includes some big names like Bernie Sanders, Elizabeth Warren, Orin Hatch, Paul Ryan. Then we have nearly 27% of high level FDA employees leaving to work for the drug industry according to this Time article. A cozy relationship if there ever was one. Those who believe this is not massive corruption are those who believe taking a little bit of cocaine occasionally presents little harm.
THE FDA – THE DRUG INDUSTRY ENFORCER
Much of why US healthcare is expensive is due to draconian rules and regulations imposed by the US Food and Drug administration. When the FDA was formed in June 1906 the intentions were well meaning. It came about due to alarming incidents of medical fraud by the private sector. Fine and well. Some form of regulation was needed to protect the consumer.
However over the years the powers of the FDA have become progressively stronger, to the point it has become a law unto itself. Today any food product that can be used to treat an illness is considered a drug by the FDA that must be verified with expensive clinical trials. How can ordinary food be considered a drug?
As long as food is safe to eat it should not matter how people use it. If it helps to cure and mitigate an illnesses so much the better. It will save us billions in healthcare costs by using prevention as a cornerstone of our health system.
RULES THAT MADE HEALTHCARE EXPENSIVE
According this article the healthcare monopoly started from 1910. Here is a summary of these rules.
- 1910 - American Medical Association - Lobbied the states to strengthen the regulation of medical licenses and allowed the AMA to oversee the closure or merger of nearly half of medical schools and the reduction of class sizes. Plus state subsidies for Physician training and limiting the number of Doctors.
- 1925 – Prescription drug Act – Federal government started allowing the patenting of drugs.
- 1945 – McCarran-Ferguson Act – Exempted medical insurance companies from most federal regulation, including antitrust laws.
- 1946 – Hospital Survey and Construction Act - Favored hospitals received federal subsidies (matching grants and loans).
- 1951 – Internal Revenue Service - Declared group premiums tax-deductible.
- 1962 – Food, Drug, and Cosmetics Act Amendments – Now have to prove that drugs worked in additional being safe to consume.
- 1965 – Medicare and Medicaid - Provided health insurance for the elderly and poor, respectively but not for the young. Provided a protected ready market for the drug industry.
- 1972 – Hospital Construction – Restricted the number of hospitals by requiring federal certification on the construction of medical facilities.
- 1974 – Employee Retirement Income Security Act – Exempted employee health benefit plans offered by large employers (e.g., HMOs) from state regulations and lawsuits (e.g., brought by people denied coverage).
- 1984 – Drug Price Competition and Patent Term Restoration Act - Permitted the extension of patents beyond 20 years and allowed big pharma to influence what prescription Doctors wrote via incentives.
- 2003 – Medicare Prescription Drug, Improvement, and Modernization Act – Provided subsidies to the elderly for drugs. Drug companies were provided a way to extend their monopoly.
- 2014 – Patient Protection and Affordable Care Act of 2010 (“Obamacare”) provided mandates, subsidies and insurance exchanges, and the expansion of Medicaid. Extended the healthcare industry monopoly by forcing everyone to get insurance.
One of the most notable pieces of healthcare legislation that drove up costs was the 1962 Food, Drug, and Cosmetics Act Amendments PL 87–781. Now not only did manufactures have to prove any new drugs were safe, but that they had to prove it worked to cure the illnesses in question, via expensive clinical trials determined by the FDA. Unfortunately this had unintended consequences. They expanded their definition of what constitutes a drug into food products.
For example Braggs Organic Apple Cider is well known for its shocking health properties. If you ever want to prevent any colds, sore throats and many common seasonal illnesses, take 2 tsp of Braggs organic apple Cider vinegar in a glass of warm within 15 minutes of feeling the symptoms of a cold, cough, sore throat, common allergies or body aches and you will never be sick. Only use it when needed. I have not been sick in 5 years. Out went my expensive Allegra tablets, back ache inducing cough syrups and a whole host of medications.
Yet the Braggs Organic Apple Cider Company is prevented by the FDA from telling you of these benefits. Just imagine the many billions of dollars that can be saved by ordinary folk? Let’s say it does not work for you? As long as Apple Cider vinegar is safe which it is, where is harm? Maybe you wasted $8 on a bottle of Apple Cider Vinegar. Big deal. Use it in a salad. It is not wasted. Many people would consider it well worth trying.
SIX RULES THAT MAKE HEALTHCARE EXPENSIVE
1. Expensive Drug Trials
According to this Tuft Center report, the average cost to develop and gain marketing approval for a new drug is pegged at $2.558 billion. Various other estimates have put this figure at $100 million to $500 million. Even at $100 million who can afford this? Only the big drug companies. Not even governments can afford this kind of outlay. There is something fundamentally sick about this process.Take a look at how complex the drug approval process is as listed on the FDA web site here. Phase 1 trials need 20-80 patients, Phase 2 needs 100’s and Phase 3 needs thousands of volunteers. If you are sick you are better off getting a gun and shooting yourself. Because by the time a drug has been approved your grandchildren will be dead too. How can we as a small Ceylon Cinnamon company proves the effectiveness of Ceylon Cinnamon? Not even the Sri Lanka government can afford it
2. Prohibition of natural food as an alternative health solution
Under FDA rules any food product that can be used as a drug even if it falls under the FDA GRAS (generally recognized as safe) rule it is considered a drug by the FDA and must be proven with expensive clinical trials. It other words not allowed. How absurd is that. Even if we sell cinnamon or garlic we cannot claim any health benefits even with bold disclaimers.
Worse we cannot post any independent research studies on our website and let customers make up their own minds. No wonder many of our clients call it the Federal Death Agency. Many countries in the World have recognized alternative medicine practices from acupuncture in China to Herbal Medicine in Germany. Yet the United States is one of few countries including Canada that actively prohibit such practices. It could save billions and make all Americans healthier.
According to this report “ In most developed countries—also in Germany—patients have access to Herbal Medicine via physicians, nonmedical CAM practitioners and on a self-initiated basis. Consequently, diverse healthcare professionals mainly doctors, nurses, pharmacists, and nonmedical CAM practitioners are involved in Herbal Medicine “
In Germany Herbal Medicine is known as one of the five main elements of classic naturopathy (phytotherapy, hydrotherapy, exercise therapy, dietetic therapy, and “life style regulation” therapy) also known as Kneipp therapies. The overall percentage of Germans using HM increased from 52% in 1970 to 70% in 2010.
3. Absurd patents
The drug patent system is also one of the most perverse laws ever developed to abuse the people. Thankfully Donald Trump cancelled the TPP which would have extended absurd American patents to Asia and ruined another continent.
The French revolution was caused by the people rising up against tyranny. We have a similar situation developing in the United States. When government creates a monopoly under the guise of allowing drug companies to recoup their research costs, it is a recipe for disaster.
Drug patent should be for a fair and reasonable length of time and not be a perpetual license to print money. When it comes to the medical industry the government has abolished free market principles with the tacit understanding that drug companies not abuse that monopoly position.That has not happened. Instead drug corporations have continued to milk the system by extending existing patents by coming up with other nonsensical applications for the same drug. Funnily the original patent is then extended. Any new patent granted to an existing drug for a new disease should only apply to that application. This is how our lawmakers have perverted justice.
4. Failure to approve generic drugs
A bill to ensure faster approval of generic drugs (H.R. 749 – Lower Drug Costs through Competition Act) indicates the FDA has been lax in approving generic drugs. The situation has got even worse when congress via laws it enacted has enabled existing patent holders to extend their patents. Did you know that the FDA cannot allow a generic drug until all challenges from the existing patent holder is resolved? That can take years.
5. Medical Malpractice Insurance
A new study cited on Forbes reveals “that the cost of medical malpractice in the United States is running at about $55.6 billion a year – $45.6 billion of which is spent on defensive medicine practiced by physicians seeking to stay clear of lawsuits. The amount comprises 2.4% of the nation’s total health care expenditure “. Some argue this is a small percentage but it is still a significant waste. Imagine how many starving children it could feed?
6. The Drug Industry
According this article “ Despite spending more on health care, Americans had poor health outcomes, including shorter life expectancy and greater prevalence of chronic conditions “ than other countries “. Out this, prescription drugs account for nearly $400 billion. Incredible. Worse 9 out 10 drug companies spent more on marketing than on research according to the Washington Post. Added to this is the cost of drug industry lobbying.
According to this OpenSecrets.org data, the Health Industry and the drug industry and insurance industry spent around 6 billion dollars on lobbying. According to CNN Hillary Clinton received $336,416 in drug industry donations while Trump received the least in donations: $1,010, enough to buy one Daraprim pill. Here is a full list of congressional members who received drug industry donations. Is your Senator on the list? Even Bernie Sanders got money. The drug industry spends massive amounts of money on lobbyists which we know is a legalized form of corruption. Do you honestly believe they have your interests at heart? Turf them out.
According to this Bill Moyers video much of healthcare legislation is written by the lobbyists controlled by the drug industry. Apparently in days gone past large corporation and wealthy interests used fraud and sometime blackmail to get their way. It is still the same, more sophisticated and nuanced but no less. It will only be a matter of time before Obama will start making expensive speeches to the drug industry and recoup his gift to the healthcare industry. You watch.
EIGHT RECOMMENDATION FOR PRESIDENT TRUMP
A) Exclude “Natural Food ” from being called a drug
There is no reason to classify common foods like herbs, spices, garlic, apple cider vinegar and the like that do not have a secret propriety formula in its production from being classified as a drug. This is what the FDA is doing now. Furthermore the FDA should not prevent such producers from telling Americans on how to use such natural food and cite independent research to treat any type of ailment. As long the product is safe for consumption we have every right to try it whether it works or not.
B) Allow supplements as drugs
While we question the efficacy of supplements to treat medical conditions, there is no reason why the government should ban them as long they can be proven safe and generally benign.A warning saying “Not FDA approved “should be more than sufficient. The market and online reviews will ensure those that have no benefit to consumers will die a natural death. To add regulations will take away a low cost treatment option.
C) Reform the drug approval process
As President Donald Trump himself has said, the US drug approval process is badly broken. It has become far too costly and takes far too long to get a new drug approved. Therefore what we need is a two track system. Let the people make their own choices which will allow plenty of low cost options.
- FDA approved Drugs – These drugs will follow the standard FDA drug approval process with expense clinical trials. Patent awarded to those who follow this step as long it does not violate the rights of non FDA approved drugs to be marketed.
- NON FDA approved drugs – Any manufacture should be allowed to sell drugs that are proven safe (with a standardized low cost test) but not proven effective as long as there is clear bold statement saying “NOT FDA approved. Take at your own risk. Possibel side effects. Efficacy is not proven “
D) Ban FDA employees from working for the drug industry
Research shows a minimum of 27% high level employee in certain sectors end up working for the drug industry according to this Time article. The real figures maybe much higher. It has been well know the drug industry will look after any FDA employee as long as they have been kind to the drug industry. It is been an unwritten code in the industry for decades.This rule should also apply Trump nominee Scott Gottlieb who himself has drug industry ties according to this article. you have a cooling off period or not, this is corruption. Having talked to FDA people we now realize what kind people actually work for the FDA. Often arrogant, unhelpful and dictatorial. Don’t believe us? Give them a call or email and find out.
E) Ban Drug Industry Donations & Advertising
No use US senator or congressman should be allowed to take money from the drug industry. Period This is a legalized form of corruption. Does anyone believe the drug industry gives money just for fun? The second issue is the marketing and advertising should be banned. If a drug is good, it will be found without incentives to Doctors and all purveyors of health.
F) Reform Drug Patent System
According this Economist article “A decade-old study reckons that in 2005, without the temporary monopoly patents bestow, America might have saved three-quarters of its $210 billion bill for prescription drugs. The expense would be worth it if patents brought innovation and prosperity. They don’t.”.
Ideally no patents should be allowed but in the interest of balancing patents, patents should be allowed for the current 12 years with no possibility of a patent extension for the same purpose. Meaning if a drug is approved to cure dementia, a patent extension for that drug will not be granted to cure some other ailment. Generic drug manufactures should be allowed to make and market it for the original condition, dementia and nothing else. Seems fair and takes away the reason patent extension manipulation.
G) Yearly FDA Audit
Let’s face it. Most government departments like the Pentagon waste huge amounts of money. The FDA is no exception. An annual fiscal and process audit should ensure the FDA works effectively and efficiently with the resources it has.
H) Introduce a Certified Alternative therapy program
Many countries including Germany, China recognizes that centuries old alternative therapy treatments work, often cheaper and better than conventional western medicine. It is true that Western medicine has made tremendous advances in surgery techniques and you need that if you are in car crash or fell of a tree. But for general everyday health using natural methods to prevent and manage your health is far better. If you take a closer look most western drugs they have been formulated on centuries old cures based on plant extracts.
Many people want to pursue alternative treatment options because the fact is western medicine cannot guarantee a good outcome and often comes with severe side effects. Why not give people what they want? Many Americans spend their own money on diet, exercise, herbs, spices and supplements without putting stress on the healthcare system They are taking a personal interest in their health and practice active preventive medicine which is not officially recognized by the FDA.
So there you have it. All indications are that more Americans have died under the regulatory authority of the FDA and the patent regime of congress than all our wars combined. We are sicker, more addicted to drugs and financially destitute. Americans spend a far greater proportion of their income on healthcare, yet our health situation is worse. Something is horrible.
The fact is the FDA and the drug industry are far too powerful even for a president to go against. Brow beating insurance companies into covering everyone has not worked. It smothers over the real issue. The blame lies not with the freedom caucus although their position is also counterproductive and only offers objections and not solutions.
The only way to tackle the entrenched powers is to take a look at the rules and regulations that cause these huge medical costs. Start from the bottom up and reform it piece by piece. It will take incredible persistence. The vested interests especially in the FDA will fight it tooth and nail. In that Peter Thiel’s’ arguments and his for ideas for FDA reform is far better. He has the tenacity, the conviction, knowledge and passion to make real change. Appointing somebody like Scott Gottlieb who is in bed with both the FDA and the drug industry is a terrible idea. The New York times would have you believe that Trump reform will undo consumer safeguards which is the usual fear mongering. Guess they will loose a lot of advertising money from the drug industry if they don’t promote the agenda.
And one more thing. We are quite confident the FDA will be out for our blood now. We expect extended holds on our shipments of Ceylon Cinnamon at ports of entry and maybe even a raid or two at our warehouses. We shall see how this plays out.