Obamacare negotiated deal with Pharma

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


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:

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)
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I think he's getting what amounts to a political bribe to not do anything to fix a problem. Bush got the same deal with not opening up importation from Canada. Our politicians are bought and paid for.
 
Newtons Bit said:
I think he's getting what amounts to a political bribe to not do anything to fix a problem. Bush got the same deal with not opening up importation from Canada. Our politicians are bought and paid for.
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That's basically what the article says, doesn't it? But it also says he can easily later turn on them and backstab them. After all, this is the kind of deals you don't put your signature on and that are not legally enforceable. At least, we can hope he'll do that.

Certainly big business has too big a clout in DC. You'll pardon me for not having a solution? ;)
 
Newtons Bit said:
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.
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What does NAFTA say about free trade? And the WTO? Do they all have provisions that free trade does not apply to (prescription) drugs?
 
ddt said:
What does NAFTA say about free trade? And the WTO? Do they all have provisions that free trade does not apply to (prescription) drugs?
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Canada wouldn't be allowed to add taxes or restrict sales of pharmacy sales from Canada to the US under NAFTA. Which is why Canadian doctors like T.A.M. don't want the US to lift the ban. I think they would end up having a supply shortage as the price can't change by current law.

I looked at the WTO rules and they appear to let countries get away with setting price controls on goods if they meet a certain set of restrictions. I remember thinking at the time that patented drugs fell into that category. I was actually rather annoyed to find this out. I'd have to look it up again to see what the exact explanation was.
 
Newtons Bit said:
Poorly explain ideas?

I suck at explaining both economics and engineering. At least I get paid to do the engineering though :D
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No you dont :) and i know it from the 9/11 section

ETA: oh well you do in explaining economics :D
 
Darat said:
Is there anything backing this "leaked memo"?
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I think the biggest source of credibility for it comes from the fact that the Huffington Post backs it. They have the original document and have talked with the guy who leaked it. They're a pretty left-wing organization. I have a hard time believing they'd do something that would backstab Obamacare without checking their story. It's definitely not a certainty, but there's enough there that leads me to believe that this is probably true.

You can see the list of articles this author has also written at the HuffPo and just for yourself if he's some evil GOP operative.
 
Newtons Bit said:
Canada wouldn't be allowed to add taxes or restrict sales of pharmacy sales from Canada to the US under NAFTA. Which is why Canadian doctors like T.A.M. don't want the US to lift the ban. I think they would end up having a supply shortage as the price can't change by current law.
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But NAFTA doesn't forbid the US to institute such a ban?

I can totally see the point about supply shortages. Ordering drugs nowadays is only a mouse click away. Or just imagine the faces of the bean counters at Pfizer, Merck, GSK, etc. seeing Canadian consumption skyrocket and US consumption plummet. :D
 
ddt said:
But NAFTA doesn't forbid the US to institute such a ban?
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The reason why the ban is currently instituted is arguable, "to protect our senior citizens". There's a medical reason. I think the factories that make this stuff are mostly located in the USA anyways.

I can totally see the point about supply shortages. Ordering drugs nowadays is only a mouse click away. Or just imagine the faces of the bean counters at Pfizer, Merck, GSK, etc. seeing Canadian consumption skyrocket and US consumption plummet. :D
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Yea, they would definitely need to change their business model when this happens. Changing business models requires lots of work and involves uncertainty and new risk, hence why they don't to change the way things currently are.
 
Newtons Bit said:
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.
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Because Canada threatens to take U.S. intelectual property unless the Canadian government gets to buy the drug at the "negotiated" price...essentially imposing price controls. Keep in mind, this is easy for Canada. They don't have much in the way of a pioneer pharmacetuical/biopharmaceutical industry there...so, they aren't particularly interested in innovation or the problem of how you balance getting medicines to people vs. how you recognize and reward innovation

In short, Canada has figured out that it can leach off American companies without paying a penalty. But, the medicines sold at cheaper prices in Canada couldn't possibly solve the price issues in the United States...there simply aren't enough drugs for Canada to meet the obligation of its Government-run system and the far, far bigger American market. Canada, for example, really doesn't make a lot of drugs save for some generics...they import most new medicines from the US or Europe. So, the question is how are the price controls that a country of 34 million uses to meet its own medical needs, going to help fill the price/need gap in a country of 325 million? So, essentially, you are hoping the Canadian government is going to buy medicines from the US at a price they force on the market...buy significantly over their own domestic needs so that they can re-sell those medicines (I assume at some little mark-up) back across the boarder?
 
BTW -- as someone who supports health care reform in the US...I think it is far better, whatever the deal, to start the process with pharmaceutical makers on board than fighting reform whole hog they way they did the Clinton plan.

Here's the real problem with drug makers...most of us pay more out of our pocket for drugs because our insurance doesn't have good co-pays. Whereas, if we're hospitalized, for example, we don't see the cost. But the fact is that medicines and their cost constitute somewhere between 10 and 12 % of health care costs in the United States.

It seems to me that one way to look at this is that if reform is going to cost a trillion over 10 years and the pharma companies are "giving" up $80 billion over that period, while they maybe should give a little more, they are almost to the 10% of health care costs that their sector represents.

Why aren't there louder screams for doctors, hospitals, insurance companies, etc. to give up more money in keeping with their real percentage of health care costs?

I am biased, I work in a area releated to the drug industry. WHile there is much wrong with the sector -- specifically a business model that is failing in the light of emerging technologies and what they imply for future mediciens (i.e. how do you get medicines to pay when it become personalized as opposed to the current block-buster model?) -- the pharmaceutical companies are not villians...merely part of the problem and potential equation for a solution.

If, at the end of health care reform, we crash our pharmaceutical industry the way Europe did (40 years ago, 75% of medical/pharmaceutical reserach was done in Europe, Germany and Great Britan in particular, today about 75% is done here in the US), than healthcare reform will be a big failure. Believe me, China, India, Singapore and even Brazil are drooling at the prospect of wrestling the bioscience innovation sector away from the US.
 
headscratcher4 said:
So, essentially, you are hoping the Canadian government is going to buy medicines from the US at a price they force on the market...buy significantly over their own domestic needs so that they can re-sell those medicines (I assume at some little mark-up) back across the boarder?
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The Canadian government doesn't own pharmacies. I think that their healthcare system doesn't even cover drugs for most patients/cases. Pharmacies buy directly from the pharmacuticals (which are mostly based in the USA). The Canadian government merely limits what the price on patented drugs are.

T.A.M. can correct me if I have misunderstood their system.

I think what would end up happening if the USA removed the import ban is that pharamuticals would stop supplying Canada until Canada removed its price restrictions. The price for Americans would go down slightly and the Canadians prices would increase to just about what Americans are currently paying.

And then there's two countries in the world that are getting screwed over by leechers with price controls instead of just one.

But the reason why I started this thread was not to keep going on this issue, but rather to point out that the Obama adminstration has removed prescription drug prices from the current batch of health-care reform. The deals that they've struck with PhRMA appear like they will increase the cost of patented drugs to medicare and private insurance users in the USA while decreasing the same prices to those on Medicaid. The government is the only real winner here because it gets to claim that its covering more people with better care on Medicaid (those who need it the most) without having to increase Medicaid's budget or raising taxes. Of course, private citizens are still paying for it, they just don't know that they're paying for it.
 
I don't see what the big deal is about this. Obama did broadcast those negotiations on C-Span like he promised, didn't he?

 
We have government restrictions on price caps, IIRC, but we do not own pharmacies or pharmaceuticals (as a government). Lets do a comparison though.

For instance...

Viagra - approximately $15 per pill up here
Lipitor - IIRC approximately $50.00 per month
Nexium - $90 per month.

Just as examples. So it is not like the drugs are dirt cheap up here.

TAM:)
 
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