Big Pharma’s Divide and Conquer Strategy

Multiple recent polls have indicated that Americans want a government run health insurance option and President Obama seems to be holding the line. Republicans say the people cannot be trusted because they don’t understand that they would be getting a “pig in a poke.” Liberal Senator Dianne Feinstein appears to have sold out to the health insurance lobby saying that the Democrats need to spend more time on costs and the government’s role. How could the Democrats not be ready? Are the Democrats slowly caving?

We have the good and the bad, so here’s the ugly. Both Bloomberg’s “Obama to Appeal to Public on Health Care as Senate Struggles” and the Financial Times’ “Obama health plan gets boost from drugmakers“ are reporting that the large pharmaceutical companies are offering about $80B in savings to the Medicare drug insurance beneficiaries. The companies are offering discounts of up to 50% for seniors to purchase medications in the benefit donut hole between $2700 and $6153 in expenditures. It does not speak well of the President to embrace this disingenuous attempt to divide the American people.

The pharmaceutical companies have excelled at charging Americans the highest prices in the world by offering strategic discounts to Medicaid, Medicare, and to a lesser extent certain pharmaceutical benefit managers and private insurers. They have attempted to garner public sympathy through the Montel Williams commercials touting “if can’t afford your medications, we might be able to help.” At the same time, drug companies are continually increasing prices to retail consumers.

President Obama, I call on you not to be entrapped by the rhetoric of the past. If you are looking for “green shoots” of industry cooperation to help sell healthcare reform, I can understand. But this is not one of them and it is unlikely that the CBO will score this favorably. The benefit does not go to the government.

Helping some of the people has long been a successful tactic used by the medical establishment to maintain the status quo. We cannot emerge from healthcare reform a divided nation. We cannot allow some members of our society to pay more or less than others based solely on age or the state they happen to live in. Each attempt to divide us puts one more nail in the coffin of real healthcare reform.

Comments

[hsr0601:]

As we know, the public option currently being discussed is modeled after Massachusetts Plan, under which about 97% of all Massachusetts residents are now covered. However, in recent estimates, CBO left out two crucial features, including a 'public health insurance option' and 'employer mandate and an individual mandate'. The estimates with 'no employer mandate and an individual mandate' ended up with 36 million uninsured.
By contrast, in case the proposed provisions with respect to the strong public option, medical IT, increased efforts in prevention, and a broader array of cost-saving plans and beyond add to the Massachusetts Plan with the provision of employer mandate and an individual mandate, the cost containment does not matter at all. And most importantly, the promising stem cell research is making its way.
To date, private insurers have coexisted profitably with Medicare and Medicaid for many years.
Basically, healthy society leads to better productivity and better performance.

Jun 23 09:25 AM

[BillK:]

"But this is not one of them and it is unlikely that the CBO will score this favorably. The benefit does not go to the government."

What a twisted perspective.

We need to think of what these actions mean to the people, not the government. This agreement will reduce costs for seniors on Part D drug coverage. It addresses the problem of the donut hole. It helps *large*numbers of real people deal with a real problem.

Bill

Jun 23 09:34 AM

[logicalthought:]

>>The pharmaceutical companies have excelled at charging Americans the highest prices in the world...<<

Have you any idea how much it costs to develop a successful drug and shepherd it through the approval process? Assuming that it doesn't require massive trials, $100 million is a good number. However, if larger trials are required, it can be more like $500 million (or even more). (And oh, keep in mind that only approximately one out of ten drugs gains approval.) If drug makers can't charge fat prices for a successful drug, where do you think the risk capital to develop new ones will come from? If you're facing 10:1 odds against you and you can't get a return commensurate with that risk, are you (or is anyone) going to invest in the sector? No, they won't.

Jun 23 10:50 AM

[Jerry Reynolds:]

HMOs win. Period

Jun 23 11:23 PM