Price Is Set for Erbitux

Title: Price Is Set for Erbitux
Source: NY Times
Date: February 24, 2004

From the article

"ImClone Systems Inc. said yesterday that its Erbitux colon-cancer treatment, which may reach patients as soon as tomorrow, will cost about $10,000 a month. ImClone and a partner, the Bristol-Myers Squibb Company, will begin shipping Erbitux today, after winning regulatory approval on Feb. 12.
Erbitux will cost $2,400 a dose."

Bristol-Myers Squibb pays approximately $2 billion in dividends per year to its wealthy shareholders. This is where the $2 billion comes from.

The pharmaceutical industry is the most profitable industry in the U.S.. The reason for this profitability lies in a distinct advantage that drug companies have when they sell their products. If you have a disease such as colon cancer and you are going to die shortly, you will pay any amount of money for drugs that offer some chance of survival. Therefore, a drug company can charge any amount it wishes.

Add to that the army of lobbyists that the pharmaceutical industry hires. This army sees to it that congress does not impose any limits on drug prices, nor does the United States government use its power in the marketplace to drive down prices.

As a result, the top 5 drug companies pay over $10 billion in dividends every year. That means that, on average, every single household in the U.S. pays approximately $100 to fund drug company dividends. That money is a tax that flows out of every American household into the pockets of America's wealthiest citizens. And the concentration of wealth accelerates.