Medicare drug pricing

[Lanya]

November 26, 2006

MEDICARE DRUG PRICING....For some reason, this has been "Democrats Are In A Fix Over Medicare" weekend, with nearly identical stories in the Wall Street Journal, the Washington Post, and the LA Times explaining that Democratic promises to allow Medicare to negotiate prescription drug prices are shaping up to be trickier than anyone thought. Oddly, though, none of the pieces really explains what the problem is. They just repeat complaints from the pharmaceutical industry that Medicare is so big that "negotiation" is tantamount to price controls, and that's a bad thing.

And so it is. But there's a fairly simple solution to this, one that only the Wall Street Journal even bothers to mention:

    [An] approach Democrats could try would be requiring drug makers to give Medicare beneficiaries their lowest price, as companies must for Medicaid, the state-federal health-insurance program for the poor and disabled.

This, of course, is common practice in the business world, where large buyers routinely negotiate "most favorable pricing" clauses into their contracts. It also addresses the most infuriating aspect of current pharmaceutical policy: the bulk of the companies and the bulk of the R&D in the pharmaceutical industry are done in America, but for some reason consumers in every other country in the world get lower-priced drugs than Americans.

An MFP clause with appropriate exceptions takes care of this, and it's something the federal government already knows how to do since Medicaid currently operates this way. It's not price control, since pharmaceutical companies wouldn't be required to supply drugs at any particular price, but if they did supply them at a price to anyone else — or any other country — then they'd also be required to offer the same deal to Uncle Sam. This is pretty standard practice when you're the biggest buyer in an industry. Just ask Wal-Mart.

And if it turns out that giving Americans the Canadian/French/German/whatever price prevents pharmaceutical companies from making money, then they'll have to raise prices in other countries. But that's OK. There's no reason American taxpayers should be subsidizing healthcare for the rest of the world, after all.

http://www.washingtonmonthly.com/archives/individual/2006_11/010283.php

[Plane]

"the bulk of the companies and the bulk of the R&D in the pharmaceutical industry are done in America, but for some reason consumers in every other country in the world get lower-priced drugs than Americans."



For   "   some  "  reason?
The profit is the reason that this industry is here.


When the economics are more favorable in some other nation then most of the R&D and most of the Manufactureing will go to that country.

We have chased a lot of industrys off lets get rid of this one too.

[kimba1]

I`m not sure how true that is
say there is a cure for AIDS and it can be made very cheaply.
will it be made public??
once in awhile I hear there is more profit from treatment than cure.
these are just rumors.
but this thinking can be applied to other illness
note has diabeties been cured by now
after all these year we see only new treatments but no cures
in a for profit industry is there any reason to find cures??

[Xavier_Onassis]

Come on. The pharma companies are making 1000% profits on some of their stuff.
A generic Rx that used to cost me $3.50 for 30 pills, now costs $7.85 from the same Walgreen's drugstore.

In Spain, the same Rx costs $1.90. In France, $2.25. In Argentina $2.10.

We are being ripped off, not just on expensive drugs under patent, but on every damned Rx that we buy.

This is a drug for heart arrhythmia that has been generic for 20 years. In Spain, France, Argentina, and probably a lot of other places, it is not necessary to present a written Rx to the pharmacist. Instead of having someone count out the pills into a new bottle each time, they just hand me a box.

[Plane]

Come on. The pharma companies are making 1000% profits on some of their stuff.
A generic Rx that used to cost me $3.50 for 30 pills, now costs $7.85 from the same Walgreen's drugstore.

In Spain, the same Rx costs $1.90. In France, $2.25. In Argentina $2.10.

Why are most of the R&D efforts and most of the prescription manufactureing not in France or Argentina?

There is plenty of Generic drug manufactureing overseas but they are baying low prices and haveing reduced reasearch for related reasons.

[Xavier_Onassis]

Why are most of the R&D efforts and most of the prescription manufactureing not in France or Argentina?

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That would be because France and Argentina are smaller countries, and therefore have fewer potential customers.

There is no reason why a generic prescription should DOUBLE in price. There is no R&D involved.

Much of the huge profits of Big Pharma go to advertise Rx drugs to the people, which does nothing for R&D.

Why should I have to pay for Vytorin and Nexium advertising?

Why should anyone?