A survey released today found that drug prices under the new Medicare drug program will be considerably higher than the prices negotiated by the Department of Veterans Affairs (VA). According to the survey, the median price difference for the 20 drugs most frequently used by seniors is 48.2 percent.
When the Medicare drug benefit was under consideration, the Administration and congressional leaders promised that a program operated through many private plans would provide, through competition, low drug prices. The Families USA survey belies that assertion.
“The huge prices paid by seniors and taxpayers could have been avoided if Congress and the President had not caved in to the pressure of the drug lobby,” said Ron Pollack, Executive Director of Families USA. “They prohibited Medicare from bargaining for cheaper prices and, to ensure that this would never change, they delegated the administration of the benefit to private plans, which have far less bargaining clout.
The VA representing 5 million gets better prices than 44 million Medicare subscribers. Another brilliant example of how Medicare has become a welfare program for drug manufacturers.
“Another brilliant example of how Medicare has become a welfare program for drug manufacturers.”
You certainly nailed that one!
The sad thing is all these foreign government can set low prices on the drugs while we pay through the sky to “cover the high costs of R&D from the drug companies.”
Canada is a free rider: they contribute nothing at all to medical advances themselves, but can get good deals because they’re a tiny marginal market luckily located right next to the “real” market. If you’re a drug co you might as well distribute whatever spilled on the floor to them at whatever price you can get, why not?
That’ why I (quite cynically) embrace every effort to import drugs from Canada: let’s have 300 million Americans clearing the shelves of the 6 drug stores in Canada. What a hoot! Chaos would ensure, Canadians would be left with nothing, US drug companies would panic and quickly show the DEA how to REALLY prevent drugs from crossing a border, something would break — but it would all be pretty funny.
Kevin — I won’t take time to intrude into your dream world; so, no lecture on either real competitive bid situations or even traffic management.
Canadian prices on drugs — from around the world — are lower than US. The reason is consistent with so many other parts of our economy. We’re discussing corporations who are in bed with our politicians — who do everything they can do to support the highest profit margins in the world. They’re inflated. If you’re in favor of that — why not just say so?
Do you think it mere chance that the flunkeys who moved the last Medicare Bill through the herd of bent-over beefaloes in Congress — ended up officially [finally] on drug company payrolls?
Kevin
Sorry, Canada is not a free rider. Contrary to what K.W. said, the drug companies do not bid on drugs for the government. When a drug is approved for sale in Canada, the Drug company presents the government with the cost of creating and producing that drug. After vetting the costs, the company is allowed to sell the drug at the cost of creation and producing, plus a healthy profit. No drug company is starving and most are very happy to do business in Canada.
Each province does sit down with the drug companies in order to get additional discounts through bulk buying. These drugs are what goes to people receiving government subsidized assistance and hospitals.
In the late 1980s, under pressure from Ronald Reagan, the Canadian Government raised the patent protection to, I believe, 19 years. In return, the drug companies agreed to do a certain amount of research in Canada. I think, but am not sure, that any drug company NOT doing any research in Canada cannot get the extended patent protection for its drugs.
In the world of drug research, seldom is there any one source of research and development. Usually, several centers and Universities contribute small bits to make a whole. Because the U.S. is home to many major drug companies, much of the research direction and final work is done here. Often it is a small company that stumbles upon a drug that ends up selling their research and or drug to a larger company.
While it is true that there are many failures for each success story, there is also a lot of duplication too. While it is up to the physician to choose the most appropriate drug, most decisions are based on how much the physician has been swayed by advertising and drug company freebies.
The no bid rider was approved by almost everyone in congress.
Go to your local rep or senator and ask them why the drug co get such a big gift.
After all who do those durg guys think they are – big oil?
Nothing like healthcare issue to bring out the stupidity in people (especially Dvorak’s blog interns).
Personally I wish the whole thing was allowed to just be a free market, with market clearing prices prevailing and the gov’t not constantly interfering. Free markets work amazingly well in every other walk of life; we’re drenched in proof of that every day (last I checked, store-brand diet cola and frozen burritos are stunningly cheap and I can have all I want.). Oh, but health care must be an exception for some reason, so let’s constantly muck up those markets entirely.
And that would make you lefties happy, b/c then you wouldn’t have to accuse medicare — a system through which enormous sums of money are taken quite quite involuntarily from working people and used to pay for medical resources for those 65 and older, even 65 yr old millionaires — of being a “corporate welfare” scam in disguise.
So you lefties will agree with me that we should just eliminate medicare immediately? That would sock it to the evil drug companies and make old people better off! Yeah!!
If people are willing to steal software and music because they think prices are too high, I guess I shouldn’t be surprised you’ll steal drugs too.