AARP Lower Drug Costs (5/2017)
In 2003, Congress passed the Medicare Modernization Act, which added a prescription drug benefit to Medicare. With Medicare buying prescription drugs in huge numbers, one would think that the health insurance program could negotiate with the pharmaceutical companies to get a discount for buying in bulk. Thatś what other insurance companies would do. But Congress inserted a provision into the law that banned Medicare from negotiating drug prices. Republican Congressman Walter Jones of North Carolina told 60 minutes, "The pharmaceutical lobbyists wrote the bill.¨ His Democratic colleague John Dingell agreed,...And just a few months after the 2003 law was passed, the chairman of the House committee responsible for the bill quit is job in Congress to become head of the pharmaceutical industry, with a salary of $2 million a year. The Crisis Of The Middle-Class Constitution, Why Economic Inequality Threatens Our Republic: Ganesh Sitaraman pg 257
Remember how imports from Canada were popular and how the drug companies said that those imports were unsafe ? Well, the problem was solved with Medicare part D. It was simply really, Medicare Part D does not reimburse imports from Canada. See how the wonders of the free market can take care of problems ? After that, Pfizer decided to shut down production in the US and move it to India. After the problems with heparin, the Congress held hearings to determine what could be done to be sure that drugs remain safe when imported. Now the FDA will need to periodically inspect the Asian drug manufacturing plants. Pfizer privatized profits from going offshore, eliminated expensive US workers, dodged those pesky environmental regulations, and passed the inspection costs on to the taxpayer.
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"Direct to Consumer advertising by drug companies is outlawed in every country except The USA and NZ. There are countless "Ask Your Doctor" commercials on TV, but only in America (and NZ) is this marketing practice approved legally. Why and how has the Rx industry's lobby been so successful with this?" Quora
The pharmaceutical industry, for example, has used its lobbying heft — it spent $272,000 in campaign donations per member of Congress last year, and it has more lobbyists than there are members of Congress — to bar the government from bargaining for drug prices in Medicare. That amounts to a $50 billion annual gift to pharmaceutical companies." Nicholas Kristof NYT
"The fact that Medicare is forbidden in the law that created Medicare Part D to negotiate lower prices is no accident. The drug lobby worked hard to ensure Medicare wouldn’t be allowed to cut into the profits which would flow to big Pharma thanks to millions of new customers delivered to them by Part D. Even some Republican House members (this was a GOP sponsored bill), including Rep. Walter Jones from North Carolina and Rep. Dan Burton from Indiana, were aghast at the whole process: NCPSSM
"...Bush's plan (for the drug companies at least guarantees drug companies retail prices for wholesale purchases. The law bars the government from negotiating for better prices from the drug companies. Thus, while the government is not permitted to use its market power to get lower prices from the drug companies, the drug companies are permitted to use their (government granted) market power (from patents) to demand whatever price they want from us. " Lawrence Lessig: Republic, Lost.
"I was the first member of Congress to take people over the Canadian border to buy prescription drugs. We are told that it is OK to bring in lettuce and tomatoes from unregulated farms in Mexico. That is not a problem. But we cannot safely bring brand-name drugs from the largest pharmaceutical companies in the world across the Canadian border. That is the most absurd situation I have ever seen. That only speaks to the power of the drug industry. I have described the pharmaceutical industry as like Rocky Marciano. You know who Rocky Marciano is? Undefeated. They never lose. And the result is we pay by far the highest prices in the world for prescription drugs – one out of five people can't afford prescription drugs." Senator Bernie Sanders
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