Chicago Sun Times Editorial - Prescription for high costs: Let U.S. negotiate drug prices
Chicago Sun Times Editorial - Prescription for high costs: Let U.S. negotiate drug prices
Copyright by The Chicago Sun Times
November 17, 2006
American seniors pay far more for brand-name prescription drugs than their peers in Denmark, Canada or France. Why? Because those governments with health care programs negotiate with drug companies for favorable prices on non-generic drugs. Here the new Medicare Part D does not allow the government to discuss pricing with drug firms -- the Republican Congress put that into law. Now Democrats want to undo it. More power to them.
Pharmaceutical companies argue that what they call "price fixing" would eat into their research and development budgets. But studies show that's only if drug prices were slashed by half; smaller price reductions would have little impact. In any case, drug companies have made enormous profits over the past two decades and Medicare Part D has helped to push those profits by raising prices and adding to the number of people filling prescriptions.
Right now, under Medicare Part D, each individual drug plan negotiates with the drug companies for prices. But Democrats want the government to be the negotiator -- as it is for Medicaid clients and veterans. That would help seniors who face a gap in coverage under their present plans. (Under each plan the user has to pay full price for the drugs for a certain period.) The Democrats' plan to try to reduce drug prices would be a terrific initiative, one with long-term impact as more boomers reach their golden years.
Part D, introduced by the Bush administration to help seniors get the drugs they need, is well-intentioned, but it's mind boggling that Republican legislators allowed a clause in the law to prevent the government from negotiating drug prices with pharmaceutical makers. One has to assume their stance was shaped by the powerful drug lobby in Washington.
No one suggests drug companies shouldn't make money. Third-quarter financial reports show they are thriving: Eli Lilly reported profits up 10 percent; Pfizer's more than doubled, partly because its sales in the United States rose by 14 percent.
And, drug companies spend more on marketing than they do on research -- pathologist Marcia Angell, who has written about drug companies, estimates their marketing budgets at $54 billion in 2001, vs. $30 billion for research and development. Companies need to promote drugs, but it's hard to accept their premise that lowering drug prices by as much as 25 percent would impact research budgets.
Gov. Blagojevich is trying to encourage more seniors to sign up for the state's Rx program to cover the gap under Medicare Part D. That and any efforts in Washington by the Democrats would be warmly welcomed by senior Americans weary of paying high drug prices.
Copyright by The Chicago Sun Times
November 17, 2006
American seniors pay far more for brand-name prescription drugs than their peers in Denmark, Canada or France. Why? Because those governments with health care programs negotiate with drug companies for favorable prices on non-generic drugs. Here the new Medicare Part D does not allow the government to discuss pricing with drug firms -- the Republican Congress put that into law. Now Democrats want to undo it. More power to them.
Pharmaceutical companies argue that what they call "price fixing" would eat into their research and development budgets. But studies show that's only if drug prices were slashed by half; smaller price reductions would have little impact. In any case, drug companies have made enormous profits over the past two decades and Medicare Part D has helped to push those profits by raising prices and adding to the number of people filling prescriptions.
Right now, under Medicare Part D, each individual drug plan negotiates with the drug companies for prices. But Democrats want the government to be the negotiator -- as it is for Medicaid clients and veterans. That would help seniors who face a gap in coverage under their present plans. (Under each plan the user has to pay full price for the drugs for a certain period.) The Democrats' plan to try to reduce drug prices would be a terrific initiative, one with long-term impact as more boomers reach their golden years.
Part D, introduced by the Bush administration to help seniors get the drugs they need, is well-intentioned, but it's mind boggling that Republican legislators allowed a clause in the law to prevent the government from negotiating drug prices with pharmaceutical makers. One has to assume their stance was shaped by the powerful drug lobby in Washington.
No one suggests drug companies shouldn't make money. Third-quarter financial reports show they are thriving: Eli Lilly reported profits up 10 percent; Pfizer's more than doubled, partly because its sales in the United States rose by 14 percent.
And, drug companies spend more on marketing than they do on research -- pathologist Marcia Angell, who has written about drug companies, estimates their marketing budgets at $54 billion in 2001, vs. $30 billion for research and development. Companies need to promote drugs, but it's hard to accept their premise that lowering drug prices by as much as 25 percent would impact research budgets.
Gov. Blagojevich is trying to encourage more seniors to sign up for the state's Rx program to cover the gap under Medicare Part D. That and any efforts in Washington by the Democrats would be warmly welcomed by senior Americans weary of paying high drug prices.
posted by Carlos T Mock @ 9:58 AM
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