Another byproduct of the health care reform debate is the recent escalation of prescription drug prices. According to the latest edition of the AARP Bulletin, between October 2008 and September 2009, brand-name drugs often prescribed to those patients receiving Medicare rose an average of 9.3%. It is noteworthy that during this same time period, other consumer prices were in decline.
Why the price rise? The industry, concerned about possible regulation if reforms were actually put in place, was apparently running up prices ahead of reform, according to a memo received by the Government Accountability Office. The congressional authors are requesting an investigation.
That is all well and good, but the chances of big pharma being called to task for this behavior are very small indeed. Remember, this is the industry that was given every concession they wanted, as well as a seat at the table, during health care reform negotiations. They, along with health care delivery entities, were the biggest spenders last year when it came to showering congress with greenbacks.
The last time drug prices rose at his rate was back in 2003, when our pals in congress passed the Part D "benefit" to Medicare, according to the article. Fear of a new government entity that would be empowered to negotiate lower prices for the government health plan was the impetus behind those price hikes. However, the legislation specifically prohibited this type of negotiation, thanks to lobbying by the industry. So, what were they afraid of, really? Nothing, probably. They saw another opportunity to make a killing, and they did, much like big oil does every now and then. Despite the cries for investigation, which sometimes actually occurs, nothing is ever done by our elected officials to stop the plunder. And so, it goes on.
The most recent attempt at health care reform also prohibits the government from creating a national formulary to procure discounted pricing on drugs. However, the article points out that the Department of Veteran Affairs has always used a two-tiered system to attain the steepest discounts from drug companies. This agency requires discounts before formulary-based negotiations even take place.
Why, then, can't this be done for Medicare, and by a government-sponsored public option program? Because the industry doesn't want it to happen, that is why. Not only is the public option issue dead, but congress caved in to lobbyists (while accepting renumeration, no doubt) and inserted anti-negotiation language in the Medicare reform bill. According to a report from the National Committee to Preserve Social Security and Medicare, applying the VA model to Medicare would save the government approximately $24 billion per year, savings that could bridge the gap popularly known as the "doughnut hole".
PhRMA, big pharma's trade group, says price hikes are necessary to offset high research and development costs and the loss of income from patent expiration. In a market economy, though, no one is supposed to be guaranteed a profit. If you cannot make a living, you go out of business, plain and simple, right? More and more, that applies only to small, not large, businesses. Government giveaways support the oligarchies while family businesses flounder. According to the Kaiser Foundation, the drug industry spent $10.4 billion in 2007 just for advertising. Does that sound like a company descending into the throes of poverty?
Why the price rise? The industry, concerned about possible regulation if reforms were actually put in place, was apparently running up prices ahead of reform, according to a memo received by the Government Accountability Office. The congressional authors are requesting an investigation.
That is all well and good, but the chances of big pharma being called to task for this behavior are very small indeed. Remember, this is the industry that was given every concession they wanted, as well as a seat at the table, during health care reform negotiations. They, along with health care delivery entities, were the biggest spenders last year when it came to showering congress with greenbacks.
The last time drug prices rose at his rate was back in 2003, when our pals in congress passed the Part D "benefit" to Medicare, according to the article. Fear of a new government entity that would be empowered to negotiate lower prices for the government health plan was the impetus behind those price hikes. However, the legislation specifically prohibited this type of negotiation, thanks to lobbying by the industry. So, what were they afraid of, really? Nothing, probably. They saw another opportunity to make a killing, and they did, much like big oil does every now and then. Despite the cries for investigation, which sometimes actually occurs, nothing is ever done by our elected officials to stop the plunder. And so, it goes on.
The most recent attempt at health care reform also prohibits the government from creating a national formulary to procure discounted pricing on drugs. However, the article points out that the Department of Veteran Affairs has always used a two-tiered system to attain the steepest discounts from drug companies. This agency requires discounts before formulary-based negotiations even take place.
Why, then, can't this be done for Medicare, and by a government-sponsored public option program? Because the industry doesn't want it to happen, that is why. Not only is the public option issue dead, but congress caved in to lobbyists (while accepting renumeration, no doubt) and inserted anti-negotiation language in the Medicare reform bill. According to a report from the National Committee to Preserve Social Security and Medicare, applying the VA model to Medicare would save the government approximately $24 billion per year, savings that could bridge the gap popularly known as the "doughnut hole".
PhRMA, big pharma's trade group, says price hikes are necessary to offset high research and development costs and the loss of income from patent expiration. In a market economy, though, no one is supposed to be guaranteed a profit. If you cannot make a living, you go out of business, plain and simple, right? More and more, that applies only to small, not large, businesses. Government giveaways support the oligarchies while family businesses flounder. According to the Kaiser Foundation, the drug industry spent $10.4 billion in 2007 just for advertising. Does that sound like a company descending into the throes of poverty?
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