Lucy, Charlie Brown and the Football: The Drug Companies
This is from the New York Times:
Eager to have a strong voice in the health care debate – and head off more draconian demands….. the pharmaceutical industry [has pledged] to contribute $80 billion in drug discounts and other savings over the next 10 years as a significant breakthrough on the road to health care reform.
The deal was negotiated in private among the industry, Senator Max Baucus, chairman of the Finance Committee and a crucial figure in shaping health reform, and the White House.
[However,] the Congress and the public should see these proposals as an opening bid and not the final word.
The drug companies are more naive than Charlie Brown. I bet they got nothing in writing.
I bet they don’t even have it on tape.
Whatever they have, I bet it’s not notarized.
Whatever bad things happen to the drug companies, they will undoubtably deserve. Unfortunately it’s all the rest of us who will ultimately pay the price.
The savings Max Baucus (Senate Finance chairman) hopes to achieve from drug maker discounts will prove to be illusory. The combination of modest deductibles and a coverage gap (i.e. donut hole) in Medicare Part D was designed to make the plans both affordable and beneficial to enrollees with a broad range of prescription drug needs. Part of the agreement requires drug makers to pay half the cost of name brand drugs for seniors throughout the Part D coverage gap. This will have the effect of making seniors less likely to switch to generic drugs. Since the government ultimately subsidizes about 75% of the cost of Part D plans, anything that reduces seniors’ incentive to substitute cheaper drugs will ultimately drive up the cost for taxpayers.