Obamacare negotiated deal with Pharma

[Newtons Bit]

The Huffington Post obtained a memo showing that the Obama administration made a deal with the Pharmacuticals industry that would keep the status-quo in drug prices.

http://www.huffingtonpost.com/2009/08/13/internal-memo-confirms-bi_n_258285.html

Commitment of up to $80 billion, but not more than $80 billion.
1. Agree to increase of Medicaid rebate from 15.1 - 23.1% ($34 billion)

2. Agree to get FOBs done (but no agreement on details -- express disagreement on data exclusivity which both sides say does not affect the score of the legislation.) ($9 billion)

3. Sell drugs to patients in the donut hole at 50% discount ($25 billion)
This totals $68 billion

4. Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based.

Total: $80 billion

In exchange for these items, the White House agreed to:

1. Oppose importation

2. Oppose rebates in Medicare Part D

3. Oppose repeal of non-interference

4. Oppose opening Medicare Part B

The two items I bolded would have resulted in lower drug prices for Americans across the board. The deals that Medicaid and low income discounts received will ultimately result in higher prices for everyone else. But it's a nifty way to allow the government to subsidize its programs with tax payer money without actually having to tax people or acknowledge that the costs even exist.

Swell.

 

[DC]

The Huffington Post obtained a memo showing that the Obama administration made a deal with the Pharmacuticals industry that would keep the status-quo in drug prices.

http://www.huffingtonpost.com/2009/08/13/internal-memo-confirms-bi_n_258285.html

Commitment of up to $80 billion, but not more than $80 billion.
1. Agree to increase of Medicaid rebate from 15.1 - 23.1% ($34 billion)

2. Agree to get FOBs done (but no agreement on details -- express disagreement on data exclusivity which both sides say does not affect the score of the legislation.) ($9 billion)

3. Sell drugs to patients in the donut hole at 50% discount ($25 billion)
This totals $68 billion

4. Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based.


The two items I bolded would have resulted in lower drug prices for Americans across the board. The deals that Medicaid and low income discounts received will ultimately result in higher prices for everyone else. But it's a nifty way to allow the government to subsidize its programs with tax payer money without actually having to tax people or acknowledge that the costs even exist.

Swell.

Do you feel bad when your money is used to pay medics for people in need?

 

[Francesca R]

Wasn't the OP recently all agitated about poor ickle Pfizer being stung by having to accept world prices for its sales abroad?

 

[ponderingturtle]

Oh man, here I thought they actualy had the balls to negotiate with pharma. It seems they did the typical thing and just let pharma have want it wants.

 

[Newtons Bit]

Wasn't the OP recently all agitated about poor ickle Pfizer being stung by having to accept world prices for its sales abroad?

No, you completely misunderstood my argument. I'm ticked off that Canada pays less for drugs than the USA does. Opening up importation (which Obama negotiated OUT of reform) from Canada would have put an end to that.

 

[DC]

No, you completely misunderstood my argument. I'm ticked off that Canada pays less for drugs than the USA does. Opening up importation (which Obama negotiated OUT of reform) from Canada would have put an end to that.

you should have ticked of that the USA pays more than Canada.

 

[Newtons Bit]

you should have ticked of that the USA pays more than Canada.

No, I'm ticked off that we don't pay the same amount. The easy reform to fix that would be for the USA to remove the ban on importing prescription drugs from pharmacies across the border. We have the power to pay the same thing that the Canadians do. Our politicians make deals so that we keep paying high prices whilst our economically equal neighbors to the north get sweet deals.

Hell, we could set our own price controls, but our politicians don't have the balls to do that either. They're perfectly content with keeping our drug prices high (even raising them )while trying to sell us the idea that this is "health care reform". It's just more of the same.

 

[Francesca R]

No, you completely misunderstood my argument.

I don't think so. You just ran away from it is all, and then thought nobody might notice a contradictory OP the following day.

.I'm also going to use Pfizer as an example. [ . . . ] Pfizer is not screwing anyone. They make a reasonable profit and spend a reasonable amount of money on new R&D. Socialized medicine in Europe and Canada on the other hand, take advantage the USA by fixing costs. Drug companies have to increase the cost of medicine in the USA so that they still generate enough revenue to pay for all of the R&D that they need. And then on top of that, they still need to maintain a good financial outlook to attract investors.

I'm ticked off that Canada pays less for drugs than the USA does. Opening up importation (which Obama negotiated OUT of reform) from Canada would have put an end to that.

This sounds like more of that warped backwards non-economics whereby vastly increasing demand for Canada's drugs is going to force down the world price of them so that, I dunno, Biovail has to jack up its domestic prices to Canadians or go bust.

 

[DC]

No, I'm ticked off that we don't pay the same amount. The easy reform to fix that would be for the USA to remove the ban on importing prescription drugs from pharmacies across the border. We have the power to pay the same thing that the Canadians do. Our politicians make deals so that we keep paying high prices whilst our economically equal neighbors to the north get sweet deals.

Hell, we could set our own price controls, but our politicians don't have the balls to do that either. They're perfectly content with keeping our drug prices high (even raising them )while trying to sell us the idea that this is "health care reform". It's just more of the same.

well thats what i ment.

i agee the import ban is nonsense and is most propably indeed keeping up the prices.

but i ment that the USA had to lower the prices in general.

But i understood that you are more angry about the Canadians for paying to less. what i dont belive is the case, i belive the USA pays to much.

 

[Francesca R]

Our politicians make deals so that we keep paying high prices whilst our economically equal neighbors to the north get sweet deals.

Oh it's your politicians now. Yesterday it was the socialists in Europe and Canada who were sticking it to you with their bad morals, so you wanted to levy tariffs on imports from the Red Zones. Make up your mind .

Actually don't bother.

 

[Newtons Bit]

Oh it's your politicians now. Yesterday it was the socialists in Europe and Canada who were sticking it to you with their bad morals, so you wanted to levy tariffs on imports from the Red Zones. Make up your mind .

Actually don't bother.

This is obviously above your level of understanding.

 

[DC]

she does in economics what you do in engineering.

 

[T.A.M.]

No, you completely misunderstood my argument. I'm ticked off that Canada pays less for drugs than the USA does. Opening up importation (which Obama negotiated OUT of reform) from Canada would have put an end to that.

given the same drug companies control both USA and Canadian drug production, distribution, etc... Do you think importation of drugs from here to the USA would result in savings for very long?

The companies would likely just elevate the Canadian prices.

GO AWAY!!!!

TAM

 

[Francesca R]

This is obviously above your level of understanding.

Yeah and everyone else's on the thread. Oh well, I am pretty stupid.

What the US needs to do is start penalizing Western Europe for fixing prices of drugs. Call it a fair market adjustment if you will. We could start adding tariffs on European goods in the US to even the gap. They screw with our prices, we screw with them financially. I would call that fair play.

Hell, I'm going to write my congressman a letter.

 

[T.A.M.]

No, I'm ticked off that we don't pay the same amount. The easy reform to fix that would be for the USA to remove the ban on importing prescription drugs from pharmacies across the border. We have the power to pay the same thing that the Canadians do. Our politicians make deals so that we keep paying high prices whilst our economically equal neighbors to the north get sweet deals.

Hell, we could set our own price controls, but our politicians don't have the balls to do that either. They're perfectly content with keeping our drug prices high (even raising them )while trying to sell us the idea that this is "health care reform". It's just more of the same.

Well now I see your point. Yah, that would certainly make them increase our prices (it would not likely make them decrease yours)...

GO AWAY!!!!

TAM

 

[Matthew Best]

This is obviously above your level of understanding.

Maybe you should just declare that you've won the argument and won't be discussing it any further? That usually works.

 

[Newtons Bit]

given the same drug companies control both USA and Canadian drug production, distribution, etc... Do you think importation of drugs from here to the USA would result in savings for very long?

The companies would likely just elevate the Canadian prices.

GO AWAY!!!!

TAM

Exactly

As an American, I would call that fair. As a Canadian, I would think that would suck.

Our politicians have two ways of getting our prices on the same level as the rest of the world. I would prefer them to open up importation. They could also set price controls (a lesser of two solutions which I feel has unintended consequences). They've decided to do neither and instead get massive campaign contributions from Pharma.

 

[ddt]

No, I'm ticked off that we don't pay the same amount. The easy reform to fix that would be for the USA to remove the ban on importing prescription drugs from pharmacies across the border. We have the power to pay the same thing that the Canadians do. Our politicians make deals so that we keep paying high prices whilst our economically equal neighbors to the north get sweet deals.

Your northern neighbours basically have said: "we won't pay more than half of the developed world is paying".

Hell, we could set our own price controls, but our politicians don't have the balls to do that either. They're perfectly content with keeping our drug prices high (even raising them )while trying to sell us the idea that this is "health care reform". It's just more of the same.

The whole health care debate is about much more than only drug prices. It's about yearly caps, lifetime caps, uninsured people, pre-existing conditions, etc. What I gather the issues are so contentious and partisan, that - if Obama doesn't want to end up as Hillary 15 years ago - he has to pick his battles carefully. This is the relevant passage from the Huffington Post article you're looking for:

Obama is walking a tightrope here. He wants to keep PhRMA from opposing the bill, and benefits by having its support, which now includes a $150 million advertising campaign. That's a fortune in politics -- more than Republican presidential candidate John McCain spent on advertising during his entire campaign -- but it's loose change in the pharmaceutical business.

In other words, he better not antagonize the pharma industry now, because they can break him and with that, all other changes he'd like to see.

(and for the record: I think Francesca gives a fair assessment of what you said in the other thread yesterday. But in this thread, I'll go with what you're saying here)

 

[Newtons Bit]

Maybe you should just declare that you've won the argument and won't be discussing it any further? That usually works.

Hey, maybe you could put some more words into my mouth. That'd be neat.

Or you could even just create my argument and fight against my imaginary argument. There's a word for that, isn't there?

 

[ddt]

given the same drug companies control both USA and Canadian drug production, distribution, etc... Do you think importation of drugs from here to the USA would result in savings for very long?

The companies would likely just elevate the Canadian prices.

GO AWAY!!!!

On the other thread yesterday, someone posted the Canadian rules for prices for patented drugs. Canada simply caps the price at the median of seven other countries: the US, UK, Sweden, Switzerland and three other European countries I've forgot.

So no, that effect would not take place.