And you thought gasoline was expensive

In 1995, the Palmaz coronary stent was introduced, the brainchild of Drs. Julio Palmaz and Richard Schatz. Medical device manufacturer, Johnson & Johnson, priced the device at $2500 per stent.

Let's put this into perspective: At just 0.05 grams per 15 millimeter stent, that put the price of the common stainless steel used to manufacture the stent at $22,650,000 per pound.

Only after several competing stents finally made it to market did J&J reduce its price to its bargain price of $1200, or $10,872,000 per pound. And to think that most of us were shocked to find out that the U.S. military paid $200 for a hammer.

Since 1995, a competitive market for stents has developed, pushing prices down. Now, you can purchase a brand-new coronary stent for as little as $4,000,000 per pound.

Medical device manufacturers have been guilty of a degree of greed that would make many Wall Street bankers blush. That's why I call medical devices "the industry of infinite markups."

Comments (5) -

  • Skeeter The Dog

    6/2/2009 1:03:34 PM |

    Interesting observation considering that medical doctors in the United States are part of one of the most successful cartels in human history.  OPEC ain't got nuthin' on the AMA!

    All humans are greedy; it is simply a matter of whether one's form of greed has greater positive than negative externalities as whether we call someone greedy or not.  But we are all greedy.

  • homebray

    6/2/2009 1:56:09 PM |

    I hope that you are suggesting that an ounce or prevention is worth a pound (in this case many pounds) of cure.

    Medical devices manufactures have very high engineering and regulatory costs which are all designed to ensure beneficial rather detrimental products. We can debate whether or not they are succeeding in this.

    However, don't you wish this same level of engineering and regulations were applied to manufactured "foods".  

    BTW they are made of Nitinol not Stainless Steel.

  • JD

    6/2/2009 2:32:17 PM |

    Interesting study posted on Dr. Eades' twitter.

    An inverse relationship between plasma n-3 fatty acids and C-reactive protein in healthy individuals

  • Dr. William Davis

    6/2/2009 5:15:57 PM |

    Homebray--Yes. I wish I thought of that, the "ounce of prevention . . ."

    Palmaz-Schatz are stainless steel. Nitinol came several years later.

  • homebray

    6/2/2009 7:26:45 PM |

    Ah!  my mistake, sorry.

    I didn't' think you were suggesting that stents should be sold in bulk by the pound! Smile