[Ip-health] Congress’ $1.2 Million a Day Dr ug Habit - and Pharma’s Phony ‘Gift’ to Health Care Reform

[Joana Ramos]

http://ampedstatus.com/congress-12-million-a-day-drug-habit-and-pharmas-pho=
ny-gift-to-health-care-reform

Congress’ $1.2 Million a Day Drug Habit - and Pharma’s Phony ‘Gift’ to
Health Care Reform

By James Ridgeway, Mother Jones


Big Pharma’s PR Ploy: Is the industry’s contribution to health care
reform just a scheme to keep us overspending on prescription meds?

Big Pharma pulled off a first-class PR coup last week with its widely
celebrated pledge to support health care reform by offering up a package
of discounts they claim will run to $80 billion over the next ten years.
The highlight of the package, said to be worth about $30 billion, is a
50 percent discount offered to old and disabled people who fall into the
“donut hole,” the notorious coverage gap in the Medicare Part D
prescription drug benefit, which leaves some of us paying as much as
$3,000 out of pocket for our meds............

<snip>

While it continues to spend millions glad-handing elected officials, Big
Pharma’s latest PR pitch is designed to make the industry look
beneficent while preserving—or even enhancing—its profits. As industry
analysts quickly recognized, the Medicare discount program is unlikely
to hurt the drug-makers’ bottom line. Charles A. Butler, a
pharmaceutical analyst at the investment bank Barclays Capital, told the
New York Times that he did not think the deal 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.”


There’s a further twist as well, in that the agreement only promises
cost reductions on brand name drugs, which account for an increasingly
smaller percentage of all prescriptions—a trend that the discount
program might actually help to reverse. Reuters business news pointed
out that “concessions will be funneled in an area that could generate
additional sales volume.” Reuters quoted Deutsche Bank analyst Barbara
Ryan, who said “roughly 20-25 percent of Medicare D patients reach the
doughnut hole, and the majority of them either stop or switch their
medications.” So Big Pharma’s scheme stands to not only keep the drugs
flowing to oldsters, but also keep them from changing to lower-priced
generic alternatives. It’s even conceivable that some Medicare
recipients, already struggling with the confusing morass of Part D
benefits (which cover various drugs at different rates that can change
at any time), might well ask their doctors to switch them from generics
to brand name prescriptions, thinking it could save them money.
.................

<snip>

This is an especially well-timed ploy for Big Pharma, since the patent
clock is ticking down on a number of its biggest cash cow drugs, which
are taken primarily by older people: The patent on Lipitor—the number
one drug in retail sales, with annual sales in 2008 of $7.8
billion—expires next year, along with the patent on the Alzheimer’s drug
Aricept. Plavix, which weighs in a number three with $4.9 billion, is
not far behind, with its patent running out in 2011. And the list goes
on (courtesy of a reader on my Unsilent Generation blog).

And suddenly, Big Pharma’s generous “concession” starts to look like
nothing more or less than a pitch to keep people taking expensive brand
name drugs, and keep the government—and the taxpayers—funding them. All
this points to the fact that despite their protestations, the drug
companies, like the insurance companies, have no real objection to
health care “reform,” as long as it happens on their terms. The
Republican-penned Medicare prescription drug bill, for example, was a
huge boon to both industries, opening up a mammoth new market for their
products, with the government footing the bill.

What the drug-makers want to avoid, then and now, is an end to what Dean
Baker calls “their government-granted monopolies,” which allow them “to
charge whatever they want. As a result, we pay nearly twice as much for
our prescription drugs as people in countries like Canada and Germany.”
By making voluntary “concessions,” the industry positions itself to
combat any real change that might affect its profit margins. And with
drug spending estimated to total $3.3 trillion over the next decade, $80
billion in discounts is a small price for Big Pharma to pay to preserve
its stranglehold on the American health care system. So is $1.2 million
a day to preserve its friends in high places in the United States Congress.


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Joana Ramos, MSW
Cancer Resources & Advocacy
Seattle WA USA
+1-206-229-2420
http://ramoslink.info/
www.bmtbasics.org
www.healthyskepticism.org