“A Very Sweet Deal”: Prescription Drug Price-Gouging Enabled By Congress
Republicans and Democrats don’t agree on much. But one thing they would agree on if they knew the facts is that because of the cozy relationship big drug companies have with our lawmakers in Washington, Americans pay far more for their medications than people anywhere else on the planet.
As a consequence, our health insurance premiums are much higher than they should be. And our Medicare program is costing both taxpayers and beneficiaries billions of dollars more than necessary.
Americans who are uninsured are at an even greater disadvantage: many of them have no choice but to put their health at risk because they can’t afford the medications their doctors prescribe for them.
Drug makers have so much influence in Washington that they’ve been able to kill numerous proposals over the years that would enable the U.S. government to regulate drug prices like most other countries do. Between 1988 and 2012, the pharmaceutical industry spent more on lobbying than any other special interest, forking over a total of $2.6 billion on lobbying activities, according to OpenSecrets.org. That’s far more than even banks and oil and gas companies spent.
That money helped them get a very sweet deal when members of Congress were drafting legislation that would eventually be the Medicare Part D prescription drug program. Drug makers were able to get their friends in Congress to insert language in the Part D legislation that prohibits the federal government from seeking the best prices from pharmaceutical companies.
According to a recent analysis by Health Care for America Now (HCAN), an advocacy group, the 11 largest drug companies reported $711.4 billion in profits over the 10 years ending in 2012, much of it coming from the Medicare program. They reaped $76.3 billion in profits in 2006 alone, 34 percent more than in 2005, the year before the Part D program went into effect.
“Americans pay significantly more than any other country for the exact same drugs,” said HCAN Executive Director Ethan Rome.
How much more do we pay than residents of other countries? Here are a few examples of what we pay on average for six brand name drugs compared to what residents of other countries pay, according to the International Federation of Health Plans:
– Celebrex (for pain) – U.S.: $162; Canada: $53
– Cymbalta (for depression and anxiety) – U.S: $176; France: $47
– Lipitor (for high cholesterol) – U.S.: $124; New Zealand: $6
– Nasonex (for nasal allergies) – U.S: $108; U.K.: $12
– Vytorin (for high cholesterol) – U.S: $123; Argentina: $31
– Nexium (for acid reflux) – U.S.: $123; Spain: $18
The Congressional Budget Office says that if Medicare could get the same bulk purchasing discounts on prescription drugs as state Medicaid programs already get, the federal government would save at least $137 billion over 10 years.
In his proposed budget for 2014, President Obama is asking Congress to require drug companies to sell their medications to Medicare at the best price they offer private insurance companies, which is what they are required to do for Medicaid.
On April 16, several members of Congress, led by Sen. Jay Rockefeller (D-W.Va.) and Rep. Henry Waxman (D-Calif.), introduced legislation to require drug companies to provide rebates to the federal government on drugs used by people who are eligible for both Medicare and Medicaid. One of the cosponsors was Independent Sen. Angus King, the former governor of Maine. The lawmakers noted that with the exception of Medicare Part D, all large purchasers of prescription drugs negotiate better prices. Their bill, they say, would correct excessive payments to drug companies, while saving taxpayers and the federal government billions of dollars.
As you can imagine, the drug companies don’t like what President Obama and the lawmakers are proposing. You can expect them to mount a multi-million dollar PR and lobbying campaign over the coming months to protect both their sweet deal with Medicare and their Wall Street-pleasing profits.
By: Wendell Potter, Guest Contributor, Politix, April 23, 2013
“Grounded In Even Less Reality”: Paul Ryan’s Make-Believe Budget
If Rep. Paul Ryan wants people to take his budget manifestos seriously, he should be honest about his ambition: not so much to make the federal government fiscally sustainable as to make it smaller.
You will recall that the Ryan Budget was a big Republican selling point in last year’s election. Most famously, Ryan proposed turning Medicare into a voucher program. He offered the usual GOP recipe of tax cuts — to be offset by closing certain loopholes, which he would not specify — along with drastic reductions in non-defense “discretionary” spending.
If the plan Ryan offered had been enacted, the federal budget would not come into balance until 2040. For some reason, Republicans forgot to mention this detail in their stump speeches and campaign ads.
Voters were supposed to believe that Ryan was an apostle of fiscal rectitude. But his real aim wasn’t to balance the budget. It was to starve the federal government of revenue. Big government, in his worldview, is inherently bad — never mind that we live in an awfully big country.
Ryan and Mitt Romney offered their vision, President Obama offered his, and Americans made their choice. Rather emphatically.
Now Ryan, as chairman of the House Budget Committee, is coming back with an ostensibly new and improved version of the framework that voters rejected in November. Judging by the preview he offered Sunday, the new plan is even less grounded in reality than was the old one.
Voters might not have focused on the fact that Ryan’s original plan wouldn’t have produced a balanced budget until today’s high school students reached middle age, but the true deficit hawks in the House Republican caucus certainly noticed. They demanded a budget that reached balance much sooner. Hence Ryan’s revised plan, which claims to accomplish this feat of equilibrium within a decade.
It will, in fact, do nothing of the sort, because it appears to depend on at least one ridiculous assumption and two glaring contradictions. That’s for starters; I’m confident we’ll see more absurdities when the full proposal is released soon.
Appearing on “Fox News Sunday,” Ryan said his plan assumes that the far-reaching reforms known as Obamacare will be repealed. Host Chris Wallace reacted with open disbelief: “That’s not going to happen.”
Indeed, to take Ryan seriously is to believe that legislation repealing the landmark Affordable Care Act would be approved by the Senate, with its Democratic majority, and signed by Obama. What are the odds? That’s a clown question, bro.
As he did in the campaign, Ryan attacked Obama’s health reforms for cutting about $700 billion from Medicare over a decade, not by slashing benefits but by reducing payments to providers. Ryan neglected to mention that his own budget — the one he convinced the party to run on in 2012 — would cut Medicare by the same amount. Actually, by a little more.
This was hypocrisy raised to high art. How could anyone who claimed to be so very worried about the crushing federal debt blithely renounce $700 billion in savings? Ryan suggested Sunday that once Obamacare is repealed, this money can be plowed back into Medicare. Which, as you recall, will never happen.
While Ryan’s new budget assumes that Obamacare goes away, it also assumes that the tax increase on high earners approved in the “fiscal cliff” deal remains in place. “That’s current law,” he said, as if Obamacare were not.
Ryan’s sudden respect for a tax increase that had to be — metaphorically — crammed down Republicans’ throats is easily explained. He needs the $600 billion in revenue it produces to make his new fantasyland budget appear to reach balance.
Ryan is likely to reprise — and even augment — the hundreds of billions of dollars in cuts he proposed last year for social programs. He indicated that he still believes Medicare should be voucherized, although he objects to the word and insists that what he advocates is “premium support.” And he asserted that Obamacare’s expansion of Medicaid, the health-care program for the poor, is “reckless” — even as tea party-approved Republican governors such as Rick Scott of Florida announce their states’ participation.
From the evidence, Ryan cares less about deficits or tax rates than about finding some way to dramatically reduce the size of the federal government. He has every right to hold that view. But it’s hard to take him seriously as long as he refuses to come clean about his intentions.
By: Eugene Robinson, Opinion Writer, The Washington Post, March 11, 2013
“The Obamacare Referendum”: Paul Ryan Is Using Shorthand Again In Selling Changes To Medicare
Did you know that on November 6, 2012, in conjunction with the national election, the United States also had a referendum on Obamacare that Republicans won? No, I didn’t, either, until Paul Ryan informed me of this, via this Think Progress report:
On Sunday morning, Rep. Paul Ryan (R-WI) stopped by Fox News Sunday to preview his new budget, which will be released in full on Tuesday. As it had the past two years, this year’s version will call for massive cuts to social service programs, including food stamps, job training, Medicaid, and Medicare. Host Chris Wallace challenged Ryan on the viability of his plan, pointing out that he wants to repeal and replace Obamacare, and, “that’s not going to happen.”
Still, Ryan insisted that he and then-running mate Mitt Romney won the election on this issue because they “won the senior vote.”
Now I think we all understand that Ryan is using some shorthand here: many Democrats hoped, and Republicans feared, that Ryan’s budget, by proposing to change Medicare from an entitlement to publicly-provided health insurance into a premium-support system, would make his party vulnerable to losses it could not manage in its old-white-folks electoral base. Instead, by a variety of means (including over two years of insanely mendacious “death-panel” demagoguery about the impact of Obamacare on Medicare, and the systematic “grandfathering” of seniors from Ryan’s proposed Medicare changes), the GOP ticket managed to promote a health care message that nicely meshed with its overall pitch to old white folks that those people along with their atheist hippie allies were threatening to take away everything good virtuous retirees had worked so hard to secure for themselves, including Medicare (which they tend to regard as an earned benefit as opposed to Obamacare’s “welfare”).
I suppose it’s understandable that Ryan would view any success in selling big changes in Medicare to old folks would represent a political ten-strike, even if he’s now having to incorporate into his budget the same Medicare savings he implicitly attacked during the campaign as a token of Obamacare’s ultimate goal of sending seniors off to euthanasia camps. But it’s still bizarre that he’s touting an incumbent president’s re-election victory as a repudiation of his most important legislative accomplishment. It’s enough to give Dick Morris hope he can come back from ridicule and disgrace and claim he was right all along in predicting a big Romney-Ryan win.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, March 11, 2013
GOP Meltdown: Paul Ryan Doubles Down On His Losing Southern Strategy
After years of drifting apart, the jobs report and the stock market aligned this week, at least momentarily, as unemployment fell to the lowest level in over four years while the Dow and the S&P 500 continued to climb. We’re hardly out of the woods— the workforce participation rate remains stuck in neutral, overall growth remains sluggish, and worker income is still lagging behind the stock market gains—but there are signs of hope.
Yet some things don’t change. As the sputtering economy tries to get into gear, House Budget Committee Chairman Paul Ryan keeps talking about depriving hard working-taxpaying Americans of their retirement benefits, while offering nothing in return. This is the strategy that failed Mitt Romney and Ryan in November, and that alienates not just senior citizens, but voters over 45 — one of the few groups that’s so far remained reliably right-leaning as Asians, Hispanics, upscale Episcopalians, graduate degree holders and others have abandoned the shrinking GOP tent.
If the President’s electoral playbook called for uniting the rich and poor and treating the middle class as an afterthought, the Congressman has a more direct, if less palatable, approach: he simply attacks the middle class, by trying to gut their earned entitlement programs.
Harping on social issues and bashing the 47 percent, along with Mitt Romney’s antipathy on the auto bailout, is why Republicans got their clocks cleaned in the industrial Midwest last November, eking out just a 5-point plurality among non-college grad white voters in the Great Lakes (a group they won by 19 points nationally).
Apparently, the failed vice presidential candidate has not internalized these lessons. Instead, Ryan & Co. seems to be doubling down on 2012’s failed bet, and treating working Americans as little more than moochers. A year ago, Candidate Ryan called for voucher care instead of Medicare for Americans who were then 55 and under. Now, he is pressing the idea of setting the cut-off at 56 in an effort to force more Americans off of Medicare.
Polling data consistently show that voters disapprove of vouchers for seniors, and Ryan’s gambit may have even cost the Republicans Florida.
It’s no surprise, then, that the few standing members of the ever-dwindling cohort of centrist House Republicans are furious with Ryan’s latest suggestion.
Tenaciously, Ryan continues to press ahead. As an unidentified member told The Hill, the “big problem was that a lot of people have been telling people that it’s 55 and that’s the number . . . And if you change it, it’s going to make us look like [liars].”
The sole source of income for most Americans now turning 65 is their monthly Social Security check, which averages a little more than $1,200 and that is before paying $100 a month for Medicare Plan B.
The origins of Ryanism trace back to John C. Calhoun’s South and Herbert Hoover’s America—and that is a losing coalition. Indeed, for a southern-based party like the current iteration of the Republican Party to regain traction, it must reach out to and make inroads with the Northern working class. Richard Nixon, Ronald Reagan and both Bushes demonstrated that this task was doable. And yet, the current crop of Republicans just does not seem to get it. When the party of the South decides to go it alone, it fails.
Single women now rival white evangelicals as a voting bloc, and the former – which preferred Obama to Romney by a staggering two-to-one margin—is just not cottoning to the Republicans’ message on personal autonomy or anything else. With childrearing and marriage increasingly distinct and recent studies showing that the life expectancies of subgroups of women are declining regionally, even as life expectancy on the whole is rising, a call to replace a long-established safety net with faux personal responsibility is not a winning message.
Religion also has lost traction at the lower end of the income spectrum, particularly outside of the South. Rather, regular worship is now the province of married upper-income Americans, be they Republicans or Democrats. SMU families and their Scarsdale counterparts have more in common than either may realize.
If the Republicans stay on their present course, the fate of the old Democratic Party awaits them.
Between 1860 and 1932, the Democrats were a Southern-based party that managed to elect only two presidents in 18 elections.
And in fact, Ryan the Midwesterner does seem to look to the South. He supported relief for the victims of Katrina, but opposed aid in the aftermath of Hurricane Sandy. At least on disaster funding, the Congressman can whistle Dixie. The question for the Republican Party is whether it has the will to change. After losing five straight elections to FDR’s New Deal Coalition, the Republicans got their act together. Will history repeat itself?
One thing is for sure: Alienating your base when you need every vote that you can get is not smart politics.
By: Lloyd Green, The Daily Beast, March 10, 2013
“Insurance Against Need, Guaranteed Return”: Why Democrats Must Get Smart On “Entitlements”
In a season of depressing budget news, the worst may have been that a majority of U.S. House Democrats signed a letter urging President Barack Obama to oppose any benefit cuts to Social Security, Medicare, Medicaid and other entitlements. That’s the last thing we need.
To hold the line on harmful cuts to discretionary spending, Obama and the Democrats must educate the public about the necessity of entitlement reform. Otherwise, the poor and needy — largely spared by the automatic reductions under sequestration — will get hit much harder down the road.
Liberals are right to reject Republican proposals that would slash social-welfare programs even as they refuse to consider closing tax loopholes for the wealthy. And I agree that the sequestration will cut into the bone of important government functions and investments in the future.
That makes two more reasons to start talking seriously about how we will pay for the insanely expensive retirement of the baby boomers.
How expensive? Anyone reaching retirement age in the next 20 years (including me) will take more than three times as much out of Medicare as he or she contributed in taxes. By 2030, the U.S. will have twice as many retirees as in 1995, and Social Security and Medicare alone will consume half of the federal budget, with the other half going almost entirely to defense and interest on the national debt. It’s unsustainable.
If Democrats don’t want to talk about these programs, they can say goodbye to every other pet program. We can preserve Medicare in amber only at the expense of investments in pre-kindergarten programs or cancer research.
To reform entitlements, we should assess what these programs were meant to do in the first place.
For starters, Presidents Franklin D. Roosevelt and Lyndon B. Johnson didn’t call them entitlements. Jimmy Carter’s administration borrowed the term from Anarchy, State and Utopia, a 1974 book by Robert Nozick, a political philosopher. “Entitlement” sounds selfish and at odds with the dignity and peace of mind that Social Security and Medicare are meant to provide.
It distorts the animating idea behind these programs, which is social insurance.
FDR didn’t have strong feelings about benefit levels, retirement ages or eligibility standards. He focused on what he called guaranteed return. By that he meant that having paid into the system through a kind of insurance premium (though in fact it was merely a payroll tax), Americans should rest easy that some money would be there for them if they lived long enough to need it. The whole point was “insurance against need.”
“Guaranteed return” and “insurance against need” should continue to be the two guiding principles of social-insurance reform.
“Guaranteed return” means no privatization or voucher system for these programs. FDR would have strongly opposed President George W. Bush’s plan to allow Social Security contributions to be invested in the stock market. He thought subjecting retirement income to what he called “the winds of fortune” was a breach of the social contract. Imagine what would happen to someone who retired in 1929 or 2008? No guaranteed return.
“Insurance against need” suggests keeping the focus on poor and middle-class recipients who depend on the money most. That means means-testing, giving wealthier retirees less. FDR, who favored high levels of taxation on the rich, would have been fine with taxing their benefits, too, as long as they were guaranteed to get at least something back.
Liberals generally oppose means-testing social-insurance programs. For decades they’ve argued that if the wealthy don’t get a heaping portion of Social Security and Medicare, it will undermine the political support of the programs and turn them into a form of welfare. Once that happens, the theory goes, the programs will be ended.
Like the word “entitlements,” this hoary idea should be retired. Social Security and Medicare are now so deeply in the marrow of the American middle class that they will never be seen as welfare. The question is not whether to reform them, but how.
Roosevelt structured Social Security as an insurance program with “contributions” through the tax code “so no damn politician can ever take it away.” He didn’t specify anything about the level of taxation or cost-of-living increases, which weren’t an issue in the 1930s but would become one shortly after World War II.
Today, only the first $110,000 in income is subject to the 7.65 percent tax that pays for Social Security and Medicare. Lifting the cap to higher income levels (say $250,000 or $400,000) could eventually generate hundreds of billions of dollars.
Republicans consider this a tax increase. That’s only true outside the context of these programs. The change could be structured so that no one paid in more than actuarial tables say they would take out. That would still raise billions and be consistent with the idea of paying for your own retirement if you can afford it.
For lifting the cap to have any chance, it would have to be matched by reforms such as adopting the chained consumer-price index, a new way to measure cost-of-living adjustments that Obama apparently favors. Liberals oppose chained CPI because it would theoretically result in lower benefits. But less frequent cost-of-living increases aren’t the same as cuts, especially if the current system is, as many experts believe, based on an inaccurate assessment of inflation.
Maybe there are better ideas for reforming social insurance. The point is, we better start talking about them. Otherwise, grandpa and grandma and their fellow Grateful Dead fans are going to eat all the food on the table.
By: Jonathan Alter, The National Memo, March 1, 2013
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