Prescription Politics

[Gene C. Gerard]

"Prescription Politics"

Two recent studies have shown that prescription drug prices
rose significantly during the first quarter of the year.
AARP, an advocacy organization for older Americans, found
that the prices charged by pharmaceutical companies for
brand-name drugs increased by almost four percent. A similar
study by Families USA, a healthcare advocacy group, found a
nearly identical increase. Given the vast sums that the
pharmaceutical industry has spent lobbying against price
controls, the dramatic increase in the cost of drugs isn’t
surprising. 

The AARP study determined that brand name drug prices
increased at more than four times the rate of inflation
during the first three months of this year. This was the
largest quarterly price hike in six years. Older Americans
take an average of four prescription drugs a month; this
increase means that the cost of these prescriptions rose by
almost $240 between the first quarter of 2005 and the first
quarter of 2006. The study by Families USA confirmed the
AARP’s findings. 

It’s no coincidence that there was a surge in drug prices
earlier this year. The pharmaceutical industry purposefully
raised the prices shortly before the new Medicare part D drug
program, which provides prescription drug benefits to seniors,
took effect. When the Bush administration lobbied the
Republican-controlled Congress to pass the Medicare
Prescription Drug Improvement and Modernization Act, it
ensured that the act contained a provision barring Medicare
from negotiating price discounts with pharmaceutical
companies. This was a huge windfall for the drug companies. A
Boston University study found that 61 percent of Medicare
funding spent on prescription drugs becomes profit for the
pharmaceutical companies. 

The pharmaceutical industry has spent vast amounts of money
to ensure that drug prices remain high, according to a recent
analysis by The Center for Public Integrity. The center found
that in 2003 and 2004 prescription drug companies and their
trade organization, Pharmaceutical Research and Manufacturers
of America (PhRMA), spent more than $44 million lobbying
against measures in numerous states to regulate drug prices.
And the industry donated more than $8 million to politicians
in various states. State governments are some of the
pharmaceutical industry’s largest customers; they purchase 16
percent of all prescription drugs in America. 

According to the National Conference of State Legislatures,
33 states have attempted to enact programs aimed at cutting
the cost of prescription drugs since 2003. In response to
these efforts, PhRMA’s top priority has been to “advocate
against any attempts to impose price controls.” And PhRMA has
enjoyed considerable success. Massachusetts State Senator Mark
Montigny was the 2005 chairman of the National Legislative
Association on Prescription Drug Prices, a consortium of
legislators from many states that champions price
restrictions. According to Mr. Montigny, “We are being
squashed by the pharmaceutical industry money. They have
killed lots and lots of legislation across the country.” 

The success of the pharmaceutical industry in subverting
price controls has allowed drug companies to dramatically
increase prices. Earlier this year Ovation Pharmaceuticals
bought the right to manufacture and market the cancer drug
Mustargen from Merck. In less than a month the cost of a
two-week prescription of Mustargen jumped from $77.50 to
$548.01. And when Ovation bought the rights to Panhematin, a
drug used to treat a rare enzymatic disease, it raised the
price from $230 a dose to $1,900. 

Similarly, Genentech recently announced plans to raise the
price of its colon cancer drug Avastin. The drug currently
costs about $50,000 per year for treatment. It has shown some
promise in treating other forms of cancer, so its use is
expected to increase significantly. Consequently, Genentech
indicated that the drug will cost $100,000 per year when used
by patients with breast and lung cancer. Last year, Genentech
raised the price of Tarceva, a lung cancer drug, by almost 30
percent, to $32,000 for a year’s treatment. 

Although the Food and Drug Administration oversees the drug
industry, it doesn’t have the authority to regulate drug
prices. But there’s ample evidence that the federal
government can successfully control drug prices when it wants
to. Although Medicare is forbidden from negotiating prices
with drug companies, the Department of Veterans Affairs is
required to negotiate the best prices possible. Consequently,
the VA is paying 46 percent less for many popular brand-name
drugs than the average prices available under the Medicare
plans for the same drugs. 

If the Democrats are looking for a moral values issue to
campaign on in the fall elections, they need look no further.
We need a Congress and a president who are willing to take on
the pharmaceutical industry, and authorize the FDA to
regulate drug prices on behalf of the American public. If we
fail to do so, the nation’s health will continue to suffer.
And access to prescription drugs will increasingly be a
luxury only for the affluent. 

_____________________________________________________________________________________________________

Gene C. Gerard has taught history, religion, and ethics for
14 years at various colleges in the Southwest, and is a
contributing author to the forthcoming book “Americans at
War,” by Greenwood Press. He writes a political blog for the
world news website OrbStandard at
http://www.orbstandard.com/GGerard.

[acmejack]

1. Amazing! Most of us knew this w/o the benefit of a study!

A simple reading of the high points of the Prescription Drug Benefit Bill revealed they could raise the prices anytime they wanted so it was a no brainer that they would as soon as they locked in all the beneficiaries. Pharma needs to be strictly regulated in the worst way, but given the exorbitant amount they spend on lobbying, it will never happen.

Why they are one of the Legislature's biggest constituents, so their interests will be protected from the meddling People at all costs.

[Mnemosyne]

2. I watched some of the hearings on this the

other day on cspan.

One of the witnesses from Families USA stated that one drug the VA pays $172 for costs medicare around $1100. He listed several drugs and compared costs between the VA and Medicare. Reprehensible and criminal, imo. But that's what you get when the corporations write US policy.

Welcome to DU Gene! The ride just keeps getting bumpier!

[MannyGoldstein]

3. Americans Are Really, Really Stupid

Americans pay twice as much per person for health care compared to other developed nation - but our results are the worst in the developed world. If our infant mortality rate was as low as Singapore's, we'd save almost 18,000 infant lives each year!

What the %^&@ is wrong with us? Medicare works great, and costs less! Let's extend it to everyone!

Like healthcare systems in the rest of the world, but not in the US, the VA negotiates drug prices - and, voila!, the drugs cost half as much. If anyone thinks that this will cause companies to stop R&D, they are mistaken - pharmaceutical companies, as a group, have the highest profit margins of any industry, and they spend twice as much money on sales and marketing as in research and development. They'll make plenty of money - just not as much.

There is a glimmer of hope - when I mentioned socialized medicine to folks ten years ago, they'd invariably go berserk, screaming that we have the best health care in the world and other BS they'd been programmed with. Now I find it interesting that Ned Lamont is calling for socializing medicine, and nobody's head is exploding.

[cosmik debris]

4. AARP is NOT an "advocacy organization for older Americans"

They actively supported the medicare reform that came to be known as the Pfizer giveaway bill. They advocate for drug and insurance companies, not for older Americans. The rest of the story may be correct, but that glaring error in the first paragraph made me stop reading right then and there!

[prole_for_peace]

5. true. the membership of AARP was overwhelmingly against the bill

but the head of the organization decided that he knew what was best (for him probably) and endorsed this horrible giveaway.

[ClintonTyree]

9. They sold out to the radical-right

"It's better than nothing" was their statement. Yeah, AARP sold out to the bushies and lost me as a member forever. They keep sending me stuff trying to get me back. I usually take their 'postage paid' envelopes, stuff them with junk mail I accumulate and send it back to them along with the message, "you sold out on the prescription drug bill and you'll NEVER get me back". The idiots continue to send me stuff though. They, like the bush administration, will never learn. Assholes!

[Iowa]

10. Yep, they lost me too...

--and my wife
--and my Mom
--and my Dad
--and anyone else who will listen to me...

AARP is just another shitheel corporation; a Republican rubber stamp masquerading as an advocacy organization. Bill Novelli is a RW stooge, and AARP will never get a nickel from me as a matter of principle.

An article from The American Prospect magazine that goes into the history of the drug bill:
http://www.thirdworldtraveler.com/Health/Seduction_AARP...

[Lasher]

11. And me too. AARP sold out bigtime.

I had been a member of AARP since before I retired. I never did see any advantage for me personally, except that I wanted to support an advocate for seniors. I was shocked when they decided to back Medicare Part D, and cancelled my membership. I contacted them and told them why I was doing it, and asked to be taken off their mailing list.

The pharma companies are making out big, but it is also the Part D insurance companies who are raking in excess profits. And guess what, AARP is operating as one of those insurance companies. Quite sinister, how the AARP turned belly up for a slice of that pie. At least in the case of Medicare Part D legislation, the AARP used our dues money to lobby for something that was not in our interests. Now I know, on a smaller scale, how the indian tribes felt when they found out Abramoff used their money to fight against casino gambling.

I now contribute instead to a lobbying organization that is fighting to protect retiree healthcare benefits.

http://www.protectseniors.org/

[vanboggie]

13. They lost me too

...along with my 80-year-old uncle. Rat b*stards.

[Straight Shooter]

6. They also lobby against class action lawsuits for harmful drugs.

New drug gave a hundred other people and your husband a sudden heart attack? Tut-tut. Too bad.

I believe most Americans simple don't comprehend the grip that Big Pharma has on the GOP. It's like you can't tell where the gun ends and the hand begins.

I wonder, as the situation gets worse, how many of the elderly will commit suicide because they (1) cannot afford their prescriptions/healthcare, and, (2) don't want the cost of their prescriptions/healthcare to be a burden on their family.

[wiley]

7. K and R Great Post!

Yes. Quite evil how they have "forced" health insurers and entitlement programs to raise their co-pays as well. I say forced because the insurance industry needs no encouragement at all.

[rasputin1952]

8. Anyone w/an IQ over 95 knew this was nothing but a shifting of part

of the Treasury to the Big Pharmaceuticals.

The neo-cons say that Gov't sponsored health care is an abomination. Strange how this giveaway to Big Pharm didn't fit into THAT scenario.

Anyone who votes for an R after what they have done to this nation, should feel the shame of one who would sell his own mother's soul for a dollar...

[ninkasi]

12. The whole sad spectacle of having an unelected

man as the man who is supposed to lead America has been nothing but an abomination. The Supreme Court can congratulate themselves, if having a dictatorship instead of a democracy was their goal all along. The price changes in these drugs is not just greedy, it is criminal and should be viewed as a criminal act. The whole Republican party should be held liable for going along with whatever horror the Chimp has wished to inflict on us. Some of our Dems, sadly, can share the blame.

[erknm]

14. Similar to what happened after Medicare was passed

Hospital and physician revenues rose dramatically. And this was with the presence of price controls for medicare spending. It is a really simple application of economics, the demand curve shifted to the right.

Better to have patients make decisions than to have government or insurers make decisions. But no one wants to spend their money directly, i.e. via a medical savings account or simple direct pay mechanisms.

FH