Big Pharma’s proposal to help old people get their meds by giving them a discount when they fall into the “donut hole” in Medicare Part D coverage, is just what we might expect it to be, considering where it comes from: another wolf in sheeps clothing from the drug manufacturers.
President Obama yesterday announced what he called a “historic agreement to lower drug costs” for older Americans, by giving most Medicare beneficiaries a 50 percent discount on brand-name medicines we buy once we have fallen into the coverage gap, which begins once we have accrued $2,700 in drug costs, and doesn’t begin again until the bill comes to $6,100–leaving some of us paying for up to $3,400 in medicines out of our own pockets. (I fall into the donut hole around August of every year, and never come out of it.)
As the New York Times pointed out this morning, this magnanimous offer won’t really save the government any money, since these are drugs it wouldn’t be paying for anyway. It also won’t hurt the drug companies’ bottom line. As the Times reports:
Charles A. Butler, a pharmaceutical analyst at Barclays Capital, the investment bank, said the drug industry was offering an olive branch to Congress and the White House, in contrast to its “vociferous disagreement” with President Bill Clinton’s proposals in 1993-94.
In an interview, Mr. Butler said he did not think the latest concessions would have “a material adverse impact” on drug company earnings. “Because of the discounts,” he said, “Medicare beneficiaries are likely to continue filling prescriptions in the doughnut hole, whereas in the past many stopped taking their medications because the drugs were unaffordable to them.”
What most initial reporting fails to emphasize is that the agreement only covers brand name drugs, which account for an increasingly small percentage of all prescriptions, despite the pharmaceutical manufacturers’ best efforts to drive consumers toward pricier non-generic alternatives. And that, of course, may well be part of the strategy here. Some oldsters, already struggling with the confusing morass of Part D benefits (which cover various drugs at different rates, which can change at any time) might even ask their doctors to switch them from generics to brand name prescriptions, thinking it might save them money. Then–lo and behold–there will be more, not less, money going into the pockets of Big Pharma.
And there we have it: A move that’s being hailed as a magnanimous concession suddenly looks like nothing more or less than a sales pitch for expensive brand name drugs. Of course, there are no generic equivalents for some brand names and the industry offer may help some people who depend on them. But at the same time, the drug industry is fighting hard against the advent of new generic equivalents. It even pays off generic manufacturers to stop producing alternatives, to keep them from undercutting brand name monopolies. Obama has expressed a desire to block this practice, which may be another thing that’s in the back of the drug companies’ minds as they plot this strategy.
In the end, of course, this is yet another move in the smoke and mirrors game being played to stop a public option in any health care reform legislation. Why do we need public alternatives when the drugsters already have caved? It is just one more pitched battle in what has become the phony war for health care reform, which now seems to be headed for nothing better than a draw–which means business as usual.
More details are yet to come, but from what we know of it now, the deal stinks. And no wonder, since it was made through the shifty sell-out who’s now the prime engineer of the phony reform, Max Baucus. As the New York Times reports:
The lobby for drug companies, the Pharmaceutical Research and Manufacturers of America, or PhRMA, said it had pledged $80 billion over 10 years to help “reform our troubled health care system.” The commitment came in a deal with the White House and Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee….
But Senate aides and drug company lobbyists said the $80 billion reflected total projected savings to the health care system and included unspecified future concessions, besides the drug discounts in the coverage gap.
Nonetheless, Obama described the agreement as a “significant breakthrough on the road to health care reform.” And that’s always the problem when it comes to corporate wolves in sheeps’ clothing: There are a lot of politicians out there who are just waiting to have the wool be pulled over their eyes.