Americans are strapped with the highest medical care costs on the planet, but the citizenry has been told repeatedly for at least fifty years or so that it is the “best medical care available anywhere in the world.”
The truth is that American medical care is OK (especially for the wealthy), but certainly not the best care available anywhere for the non-rich. Medical treatment in places like India, Thailand, Mexico, Costa Rica and a host of other countries have built reputations for excellent care at a fraction of the cost in the US.
The number one medical tourism destination is Bangkok, a city I can personally vouch for having the most amazingly excellent hospitals, medical staff and cutting edge treatment.
As more and more Americans, Westerners, Middle Easterners and others are discovering the benefits of traveling to these medical tourism destinations, the old guard in the homeland is fighting back. They are doing this not in a competitive way (by figuring out how to make the cost of medical care in their country less expensive), but by economic and political pressure to make medical care more expensive in the destination countries.
As the Huffington Post reports: “The Obama administration and members of Congress are pressing India to curb its generic medication industry. The move comes at the behest of U.S. pharmaceutical companies, which have drowned out warnings from public health experts that inexpensive drugs from India are essential to providing life-saving treatments around the world.” Huffington Post, 28 June 2013
When big business (in this case, the pharmaceutical industry) makes demands on the US government, the government takes action, whether it be through diplomacy or aggressive pressure. For the US federal government. what is best for individuals, including Americans, is not nearly as relevant as protecting the bottom line of American big corporations.
Low cost generic drugs produced in India is one of the major reasons medical treatment has much lower costs in Asian countries, and Big Pharma sees that as taking money out of their pocket. These companies have sought to impose aggressive patenting and intellectual property standards in India, measures that would grant the firms monopoly pricing power over new drugs and lock out generics producers.
One of the major tenants of the TPP , The Trans Pacific Partnership free trade agreement (which has little to do with free trade and a lot to do with protecting US business), that Obama has been successfully selling to other countries extends to the patent rights for medicines to Big American Pharmaceutical companies. The designed protections for this US industry will be paid for by higher medical costs for consumers in all TPP signature countries.
On a second front with the American attack on cheap medicines in Asia, the Secretary of State and member of the Skull & Bones, John Kerry, went to India in the last week of June (of this year). During that trip, he applied pressure to the Indian Trade Representative about generic drugs manufactured in India and exported throughout Asia and Africa. A State Department spokesperson said that during his trip, Kerry “discussed a number of economic and trade issues with Indian officials, including ongoing issues in the pharmaceutical sector.” In addition, the U.S. Patent and Trademark Office and the Office of the U.S. Trade Representative have been pressuring the Indian government on its patent standards.
The Obama administration placed India on a special trade blacklist in a move some public health advocates said was retaliation for the country allowing generic versions of expensive drugs produced by U.S. Pharmaceuticals. The Office of the U.S. Trade Representative has placed India on its “Priority Watch List” for several years, citing issues valued by the American pharmaceutical industry every year Obama has been in office. The list is little known in the U.S. and has no recognizable immediate impact. Still, it is a significant economic tool abroad that can have political repercussions, although some experts argue that it’s relevance has waned recently as more countries are standing up to the pressure from the US and not cooperating.
Judit Rius, U.S. manager of the Doctors Without Borders, has said “The U.S. Trade Representative’s decision to place India on its annual trade ‘Watch List’ is a bully tactic being used to punish the country for taking steps to ensure access to affordable, lifesaving medicines and to prevent other developing countries from following similar strategies.”
To give you a clearer picture of the specific financial effects for customers (aka “patients”) of medicines, one of the drugs that is involved in this conflict is a generic alternative to Nexavar, an expensive cancer drug patented in India by the German giant pharmaceutical company, Bayer AG. Bayer was charging more than $5000 per month for standard doses of this medication, way out of the price range for about 90% or more of the world population. A generic version, approved by the Indian government, cost just $157 a month. Under the compulsory license issued by the government, Bayer received a 6 percent royalty on sales of the generic drug.
The Obama Administration lashed out at the Indian government accusing it of violating World Trade Organization treaties because of the Nexavar generic and other big name drug alternatives. Apparently, putting things in priority, it is more important to the US federal government that the big pharmas get a higher income over the idea of whether it would be available to most people in the world or not. The Supreme Court in India decided, however, that Bayer failed to meet demand for the medication and the firm’s failure to offer the drug at “reasonably affordable price.”
When a Big Pharma company develops a new drug, they are awarded a twenty year monopoly worldwide. Nexavar is beyond that 20 year protection period. Big Pharma has tried to work around the restriction of twenty years for a monopoly by making very slight changes to a drug, so that appears as a new medicine. The Obama regime has backed this practice and claims that these slight changes provide ‘enhanced efficiency’ of medicines available (in addition to giving the Big Pharmas another twenty year monopoly). The highest court in India has found that some of these “enhancements” of a medicine did not constitute a legitimate innovation since the “new” active ingredient has been around for many years (this was the ruling in the case regarding a Novartis leukemia drug called Gleevec or Glivec).
BOTTOM LINE: There is a financial war going on with medicines manufactured in India and other Asian countries. On one side are the consumers (patients), most doctors outside of the US, hospitals outside of the US and high courts in Asian countries. On the other side is Obama, big American and European pharmaceutical companies, the US State Department and the US Trade Representative. And most Americans inside of the US are even aware of what is going on.
Prices for medicines is one side of the war against low priced medical care outside of the US. Another side is the US fighting the services sector of overseas medical care.
It is the recent trend for Americans to get medical care in Asia, and it is supported by many private medical insurance firms that see major cost savings. Many Americans are insured by Medicare (over 47 million Americans), and despite that system running short of money, they will not pay for services outside of the border of the US. When a Medicare patient gets a treatment, they must get it in a US hospital, and Medicare pays for it (most of it, anyway). If the price for the same procedure in Thailand is just a fraction of the cost in the US, it would seem reasonable that Medicare should be pleased to pay for the procedure at the lower amount. But that is not going to happen.
It must be brought to the attention of all Americans the principal that Medicare benefits are not here for the benefit of the patient. Medicare benefits are here for the benefit of the US medical industry. That concept may be a shock to most Americans, but that is the reality.
Why are medical costs so high in the US? The Root Causes:
- High labor costs. Put simply, nurses and doctors and medical technicians are paid much more than their colleagues overseas.
- High costs of medicines due to Big Pharma business practices and the expensive approval process imposed by the federal government.
- Tort law that allows for many claims and lawsuits (and lawyers) with extremely high amounts of plaintiff awards.
- High administration expenses. It costs a lot of money to run a hospital and meet the bureaucratic requirements.
- Heavy regulation by the federal and state governments.
- Discouragement of competition
There is a lot of debate on these above issues about how much is too much, and which of these issued should be tackled, but is there anyone in the medical industry or in political office that is tackling any one of these issues? The much ballyhooed “Obama Care” addresses mandatory health insurance for all Americans, but does not tackle any of these root causes to the problem of high medical costs.
“If you think American health care is expensive now, wait until you see what it costs when it’s free.” – P.J. O’Rourke
The one thing medical treatment opportunities overseas offers is new competition for American medicine (fighting one of those root causes of high medical costs). Any American needing medical treatment where they must pay (with or without the help of a private health insurance company), would be absolutely foolish if they did not at least consider the benefits of getting that treatment outside of the US border.
Check this out: 06 July 2013 – Medical tourism in Thailand on the rise – Channel News Asia
21 July 2013 – Who decides what a doctor is worth (in the US)? - Washington Post TV (video) – The AMA is a price fixing racket, and the elite main stream media is starting to finally notice.
22 July 2013 – Medical Pricing (in the US) Is A Total Scam – Business Insider
Incidentally, all this applies equally to the the Dental Industry. For instance, in Thailand dental work is often 10% to 30% of what the same treatment costs in the US. And it is as good or better quality treatment than the typical dental treatment in the US. Good dental work is provided in many countries at a fraction of the expense of US American Dental Association (ADA) offices. Dental service prices in the US are practically fixed by the ADA, providing dentists with higher incomes than most medical doctors.