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    Why Aren’t We Using This Little Known Law to Bring Down Drug Prices?

    We could save millions of lives and smash Pharma’s monopoly on medicine all by asking a simple question: What is reasonable?

    This question—put another way, What is just?—is at the center of a health-care initiative brewing in, of all places, Louisiana. If successful, it could eradicate hepatitis C and put a fatal crack in a drug-pricing system that systematically balloons costs and kills the sick.

    The word “reasonable” comes from a piece of federal law known as 28 U.S. Legal Code 1498. It establishes the government’s right to infringe on privately held patents, should doing so serve the national interest. The government, in return, is obligated to give the patent holder what the code calls “reasonable compensation.” As with eminent domain, the government determines “reasonable” by the specifics of the case.

    In the case of the gestating Louisiana initiative, the patent in question covers a grotesquely overpriced new cure for hepatitis C, a highly contagious blood disease that kills more Americans than every other infectious disease combined.

    Tragically, and curiously, 1498 has only fallen out of use with regard to pharmaceuticals.

    In the interests of commerce, public health, and national defense, the U.S. government has been disrespecting patents since it stole proprietary designs for cannonballs during the Revolutionary War. The government has routinely excercised the right ever since. In 2009, the U.S. Treasury invoked its soverign immunity under 1498 to assume liability for banks using patented check-fraud software. Tragically, and curiously, 1498 has only fallen out of use with regard to pharmaceuticals. Up until the early 1970s, it was often used to spur the production and import of cheap generic drugs. During the Vietnam War, for example, the Pentagon’s Medical Supply Agency used the law to procure dozens of generics and name-brand drugs at pennies to dollars. In the case of the antibiotic nitrofurantoin, the Defense Department decided that a “reasonable” reimbursement for the patent holder was 2 percent of the sticker price.

    In recent years, there have been blips about reviving 1498 to make the new hepatitis C cure accessable. Articles have explored the subject in leading legal and medical journals such as the Yale Journal of Law and Technology; in 2015, Bernie Sanders asked the Department of Veterans Affairs to use its 1498 prerogative to produce cheap generic versions for veterans. But nowhere is the rubber closer to hitting the road than in New Orleans, ground zero of the nation’s hepatitis C epidemic. In mid-June, Louisiana Health Secretary Rebekah Gee closed a month of open public comments on a stated plan to bring affordable hep C drugs, one way or another, to the people of her state.

    Of the routes Gee’s office is considering, the most likely is a formal 1498 request to the Department of Health and Human Services. Under this scenario, the government would contract with companies to produce generics in violation of 20-year patents currently held by Gilead Sciences, Inc. The government would assume liability for those companies, and settle with Gilead according to the “reasonable compensation” language of 1498.

    Inflated drug prices are blowing state budgets out of the water

    “Hep C is the prime example of a broken system, and one of the options for challenging this system is 1498,” says Dr. Gee, a Democrat appointed by Governor John Bel Edwards in January of 2016. “People are dying instead of receiving treatment, because the companies can price what they want, with no acccountability. It’s unacceptable.”

    In her previous job as director of Louisiana’s Medicaid program, Gee had a front-row seat to two overlapping phenomena: The known cases of hepatitis C in the state tripled to more than 70,000, and Gilead began rolling its three-month cures onto the market with pricetags upwards of $100,000.

    “Last year, we could only afford to treat 3 percent of the 35,000 people who need treatment under my purview, which is the uninsured and Medicaid,” says Gee. “It would cost us almost $1 billion to treat everyone. Our state budget is already in crisis. We just can’t afford it.”

    Neither can other states with large infected populations. Kentucky spends $50 million—7 percent of its Medicaid budget—to treat fewer than 900 people with the new drugs. Even under its most generous discount programs and negotiated reductions, Gilead charges tens of thousands of dollars for a single patient’s treatment, putting the cure out of reach for the vast majority of the five million-plus Americans with the disease.

    The result is a brutal rationing system.

    “The way Medicaid and managed care organizations have it structured, you have to be very, very sick to gain access to the cure, meaning you have to be pretty close to needing a liver transplant,” says Alice Riener, a community health expert with the Louisiana Hepatitis C Coalition.

    Gilead, meanwhile, has been doing just fine. Since 2014, its hep C drugs have reaped the company tens of billions in profits—dwarfing the R&D and buyout costs it expended along the way to acquiring the patents. The company’s gold-plated cure is actually not expensive to make. One study presented at last year’s International Aids Conference in Durban estimated the most important regimens could be produced for between $62 and $216. (These numbers find a more accurate reflection in developing countries, where Giliad-licensed generics are sold for a fraction of the U.S. price. Some Americans have begun procuring the drugs from India, the way they once traveled to Canada to buy HIV medication.)

    The price of the drugs not only keeps people from being cured, it actively exacerbates the spread of the disease. Because most at-risk people know they can’t afford treatment, they decline testing, preferring ignorance to shame and helplessness.

    “It’s hard to convince someone to get tested if they know there’s nothing anybody can do to help them,” says Alex Niculescu, a volunteer with Trystereo, a harm reduction group in New Orleans. “There’s a lot of stigma around hep C, and if they know they can’t get the cure, what’s the point? It’s a silent disease, so they figure they can live with it for decades. And it keeps spreading.”

    Pharma’s drug prices are the reason we spend 1/5th our GDP on healthcare

    If invoking 1498 only alleviated human misery and eradicated a communicable disease, it would be worth breaking Gilead’s patents tomorrow. But there’s another baseline urgency, a malignancy at the core of the national economy. The failure to restrain drug prices is a major reason the United States spends more than $3 trillion a year and rising on health care—close to a fifth of GDP, the most of any country. In recent years, Gilead’s hep C drugs have singlehandedly driven spikes in drug spending, despite the relatively minuscule number of people taking the drugs. Treating every American with the disease would cost well over $200 billion at current prices; doing so with off-label generics would cost, on the outside, $1 billion.

    With experts predicting the rise and spread of new infectious diseases in a warming world, now seems like an especially good time to dust off 1498. Pointing to the Zika virus as a sign of things to come, Dr. Gee sees the fight for affordable hepatitis C drugs as part of an inevitable shift toward a new public health paradigm.

    “If there is a serious outbreak of Zika, or something like it, we’d have to invoke 1498,” she says. “If the government is going to pay for the development of a vaccine, then why give it to Sanofi so they can price it however they want? It would break state budgets. We need to come up with a better mechanism. We’re already in a public health crisis, but the day is coming when the public will cry out to fix pricing, and quickly.”

    Hepatitis C affects more than 1 percent of the U.S. population, but is unlikely to generate much of a public outcry. It is transmitted most commonly through IV drug use and generally affects those on the social margins.

    “It’s just not a sexy disease,” says Niculescu. “Unlike HIV, it doesn’t kill rich white stockbrokers in their thirties. The closest hep C has to a celebrity spokesperson is Pamela Anderson. There’s a widespread feeling in this country that drug users are a burden, that they deserve to suffer and die. We just don’t care about these people, or that drug companies are profiting from their deaths. I’m against going the usual advocacy-reform route of begging Gilead for deals and crumbs. It legitimizes the idea that some lives matter more than others.”

    The Plan

    At the moment, Gee is busy collating the public comments posted to her office’s website on how to proceed. She and her extended team of advisers—including local and national experts—will devise an attack plan over the summer. Some are advising her to pursue 1498, others are leaning in other directions, such as a bidding system supported by the National Academy of Medicine.

    Whatever plan Gee eventually adopts, she says national political pressure will be key to fixing the crisis in drug prices.

    Whatever plan Gee eventually adopts, she says national political pressure will be key to fixing the crisis in drug prices. Louisiana politics is not friendly turf for building this kind of pressure behind bold progressive ideas, but Gee has a base in the state’s advocacy groups and the liberal population of New Orleans. She’s also working to expand this base to include Louisiana political leaders. Most notably, Gee has been meeting with Republican Senator Bill Cassidy, a hepatologist who, she says, “cares about the issue.”

    “There is a lot of political will in this country to fix health costs before they eat our state education budgets alive, but Pharma is incredibly powerful, and we’re going to need a coalition to get it done,” she says.

    Unfortunately, if one man embodies the system that prizes shareholder value over human life and public health, it is the current Secretary of Health and Human Services, Tom Price. It is a irony of history that Price—who has made his career and fortune as a self-dealing defender of medical industry profits—could very well decide the immediate fate of the first attempt to use 1498 against a drug company since the Ford administration.

    “Right now, we’re deciding on a plan,” says Gee. “Then we’ll take it to Tom Price and say, ‘This is the best option in the interest of public health. People are suffering and dying in my state because we can’t afford this medicine. It is unacceptable. Let’s fix it.’”

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    What Happened to America’s Wealth? The Rich Hid It.

    If you find yourself traveling this summer, take a closer look at America’s deteriorating infrastructure — our crumbling roads, sidewalks, public parks, and train and bus stations.

    Government officials will tell us “there’s no money” to repair or properly maintain our tired infrastructure. Nor do we want to raise taxes, they say.

    But what if billions of dollars in tax revenue have gone missing?

    New research suggests that the super-rich are hiding their money at alarming rates. A study by economists Annette Alstadsaeter, Niels Johannesen, and Gabriel Zucman reports that households with wealth over $40 million evade 25 to 30 percent of personal income and wealth taxes.

    These stunning numbers have two troubling implications.

    First, we’re missing billions in taxes each year. That’s partly why our roads and transit systems are falling apart.

    Second, wealth inequality may be even worse than we thought. Economic surveys estimate that roughly 85 percent of income and wealth gains in the last decade have gone to the wealthiest one-tenth of the top 1 percent.

    That’s bad enough. But what if the concentration is even greater?

    Visualize the nation’s wealth as an expansive and deep reservoir of fresh water. A small portion of this water provides sustenance to fields and villages downstream, in the form of tax dollars for public services.

    In recent years, the water level has declined to a trickle, and the villages below are suffering from water shortages. Everyone is told to tighten their belts and make sacrifices.

    Deep below the water surface, however, is a hidden pipe, siphoning vast amounts of water — as much as a third of the whole reservoir — off to a secret pool in the forest.

    The rich are swimming while the villagers go thirsty and the fields dry up.

    Yes, there are vast pools of privately owned wealth, mostly held by a small segment of super-rich Americans. The wealthiest 400 billionaires have at least as much wealth as 62 percent of the U.S. population — that’s nearly 200 million of us.

    Don’t taxpayers of all incomes under-report their incomes? Maybe here and there.

    But these aren’t folks making a few dollars “under the table.” These are billionaires stashing away trillions of the world’s wealth. The latest study underscores that tax evasion by the super-rich is at least 10 times greater — and in some nations 250 times more likely — than by everyone else.

    How is that possible? After all, most of us have our taxes taken out of our paychecks and pay sales taxes at the register. Homeowners get their house assessed and pay a property tax.

    But the wealthy have the resources to hire the services of what’s called the “wealth defense industry.” These aren’t your “mom and pop” financial advisers that sell life insurance or help folks plan for retirement.

    The wealth defenders of the super-rich — including tax lawyers, estate planners, accountants, and other financial professionals — are accomplices in the heist. They drive the getaway cars, by designing complex trusts, shell companies, and offshore accounts to hide money.

    These managers help the private jet set avoid paying their fair share of taxes, even as they disproportionately benefit from living in a country with the rule of law, property rights protections, and public infrastructure the rest of us pay for.

    Not all wealthy are tax dodgers. A group called the Patriotic Millionaires advocates for eliminating loopholes and building a fair and transparent tax system. They’re pressing Congress to crack down on tax evasion by the superrich.

    Their message: Bring the wealth home! Stop hiding the wealth in offshore accounts and complicated trusts. Pay your fair share to the support the public services and protections that we all enjoy.


    Originally published by OtherWords under a Creative Commons Attribution-Share Alike 3.0 License.

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    Hot new book has all the dirt on one of the scariest Swamp Creatures in Trump’s Cabinet

    the cover of "Out of the Ooze," a graphic novel. The cover shows a cartoon version of Tom Price holding up a man in a hospital gown in front of a big full moon, in the style of an old horror movie poster.

    Tom Price, the Trump appointee in charge of the Department of Health and Human Services, isn’t just your average multi-millionaire scumbag. Before showing up to slime all over D.C., he spent decades using his medical credentials to push the agendas of his Big Pharma and insurance company buddies.

    Tom Price is a cartoon villain who’s finally got his own book to star in: Out of the Ooze charts the corruption and far-right extremism behind Price’s rise. From the suburbs of Atlanta to his time in the Georgia Senate and the House of Representatives, Out of the Ooze writer Alex Zaitchik lays out how Price has openly used his status first as a medical doctor, then as a government official, to line his pockets while pushing for laws that would keep the poor and sick even poorer and sicker.

    We’ve excerpted the book below, but you can check it out and order a copy here.

    Excerpt from Out of the Ooze

    Chief among the barrier islands off Georgia’s southern coast is a charmed little place called St. Simons. With its quaint downtown, plantation ruins, and perimeter of beach grass dunes sloping into the Atlantic, it is Martha’s Vineyard with a history of Union Army occupation. On this isle sits a choice plot with a deed in Price’s name.

    We know about the property because it is listed in Price’s financial disclosure statement. The plot, valued at up to $5 million, is one of many nest eggs Price has collected over the course of his long double-career as an entrepreneur and legislator. During his eight years in the Georgia senate and a dozen more in Congress, Price has amassed a personal fortune in excess of $12 million. In his official disclosure, his stock holdings alone filled 13 pages.

    For most cabinet nominees, these numbers would generate shrugs. If dollars alone separated Price from the other two doctors nominated to HHS by Republican presidents — Otis Bowen and Louis Sullivan — nobody would much care. He is not the first millionaire to chair the Budget Committee, or run a federal department.

    But there is a stink around Tom Price. A deep, unprecedented, flies abuzz stink. It appeared over him like a green fog on day-one of his Senate hearings. It deepened over the course of questioning and followed him into his new office, where he guides policy shaping the future of Medicare, Medicaid, and the decisions of the Food and Drug Administration.

    The stink around Tom Price is not dissipated by the lack of a rap sheet. Though never convicted of breaking Congressional rules or the U.S. criminal code, a body of circumstantial evidence strongly suggests he spent his career in Congress rubbing hard against both boundaries.

    While sitting on the Ways and Means Committee, Price enjoyed a brazen side hustle trading $300,000 worth of healthcare-related stocks, all the while advocating for many of these companies with colleagues and federal agencies. In the restrained language of Oregon Democrat Ron Wyden, “When it comes to ethics, Tom Price falls well short of the standard the American people expect nominees to meet.”

    Exactly how far short, we may never know. The U.S. Attorney for the Southern District of New York, Preet Bharara, was reportedly investigating Price’s dealings, and possibly planning an indictment, when President Trump fired him the day after the new HHS chief assumed office.

    The problems with Tom Price go deeper than his suspicious stock trades. Those are surfacing methane bubbles that originate from deep fissures on the floor of a failed, inhumane, and corrupt healthcare system that Price embodies in caricature. The man with the Congressional nickname “Dr. No” has devoted his life to blocking all attempts to soften the edges of this system, then sharpening them further them on the backs of the poor, especially children and seniors. Despite the handful of human-sounding noises Price has learned to make over the years, his career amounts to a Creature Double-Feature of mutually reinforcing sadism and personal enrichment.

    Out of the Ooze is available on Amazon here.

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    Will the GOP’s new Jim Crow scam tip the vote in Georgia’s Congressional Election next week?

    Palast On Democracy Now!: GOP Jim Crow Tactics Help Steal Hand…

    GOP Jim Crow Tactics Help Steal Handel-Ossoff Race — Greg Palast Reports For Democracy Now!The most expensive Congressional race in history will be decided June 20. While most polls show Democrat Jon Ossoff ahead of Republican Karen Handel, vote suppression tactics could steal this special election! Support our investigation by making a tax-deductible donation: TrumpStoleIt.org#GA06 #Crosscheck #ElectionFraud #StopCrosscheck #RestoreTheVRA

    Posted by Greg Palast on Thursday, June 15, 2017

    In last week’s debate, would-be Congresswoman Karen Handel took a momentary break from attacking her opponent, Jon Ossoff, to attack a reporter: me. Handel claimed, “a reporter supposedly representing some very liberal Democratic organization almost literally accosted me.”

    In fact, is was a trio of galoots working for Handel who accosted me.

    But who accosted whom is less important than Handel’s promoting the dangerous new trend of attacking the press, sometimes physically, when questions are uncomfortable or challenging.

    It all began with my investigation for Rolling Stone Magazine, printed just before the Presidential election, in which Georgia, and the 6th Congressional District, played a notable–and ugly–role.

    I had discovered that Handel’s successor as Secretary of State, Brian Kemp, had employed a sophisticated, under-the-radar trick that could simply wipe away minority voter registrations by the thousands. The trick is called, “Interstate Crosscheck.”

    Crosscheck’s operation is based on the claim, repeated as faith by President Donald Trump, that there are “millions” of voters registered in two states who vote twice in the same election.

    While not one Georgian has been convicted of this crime — voting twice is a felony – Secretary of State Kemp has been working through a target list of an astonishing 660,708 Georgians.

    Handel, previously Secretary of State and a Crosscheck booster, told me, “We use the system of Crosscheck to make sure illegal voters are not on our rolls.” But is there really a humongous crime wave of Georgia citizens voting in another state in the same election?

    Despite Handel’s claims to the contrary, records indicate not a single Georgian was found guilty of the crime of double-voting.

    I obtained a copy of the list. Here’s a typical suspect: Maria Isabel Hernandez of Georgia is supposed to be the same voter as Maria Cristina Hernandez of Louisiana. James Brown Jr. is supposedly also voter James Brown Sr.

    It would be ludicrous if it didn’t threaten so many voters. And not just any voters. The experts brought in by my Rolling Stone team concluded that, by using common names (Hernandez, Lee, Kim, Brown), the list was wildly biased against minorities. They estimated that as many as one-in-seven Black voters in Crosscheck states are tagged.

    Not all will lose their vote. That would only happen after a number of steps including failure to return a postcard from Secretary Kemp’s office. Virginia is the only state to identify the number of voters purged by Crosscheck, about 12% of the list. Applied to Georgia, that implies 79,000 voters are at risk.

    The issue has national significance. This absurdly concocted list was created for Georgia and other GOP-controlled states by Kris Kobach, appointed two weeks ago to run President Trump’s so-called, “Election Integrity Commission.” If Crosscheck and other racially poisonous vote suppression methods help seize Georgia’s Sixth Congressional District unchallenged, Trump’s commission will be tempted to expand it nationwide.

    And that’s why I “accosted” – i.e. interviewed—Ms. Handel. When I attempted a follow up question, a chunky goon jumped between me and her, and muscled me back while another knucklehead grabbed my arm and a third shoved me back. I have it all on camera.

    This was only days after the assault on Guardian reporter Ben Jacobs, but in my case it was more ludicrous than harmful.

    What was my question that was so rudely blocked? I had, in 2014, interviewed an enthusiastic group of Korean-Americans based in the Sixth CD, the Asian-American Legal Advocacy Center. When I returned this year, their office was shuttered, empty.

    Apparently, the group which launched a “10,000 Korean Votes” registration drive discovered that many of their registrants simply never appeared on voter rolls. Their lawyers’ query about missing voters to the Secretary of State resulted in a raid by the Georgia Bureau of Investigation and a threat of criminal charges. While no charges were brought, the terrifying raid (repeated later against the New Georgia Project), was enough to put the Korean voter group out of business.

    I was trying to ask Handel about these raids on voter registration groups when I was body-blocked.

    Then her supporters began chanting, “U! S! A! U! S! A!” – as if questioning journalists are now enemies of America.

    And that’s frightening. Not the clowns who assaulted me. They were more buffoonish than threatening.

    I don’t want compensation, I don’t want to press charges. I want an answer to the question: Who will decide the race in the Sixth—the voters or Jim Crow.

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