GAY AND GRAY: Brinkers Face Retirement
The Benefits of Growing Old

Big Pharma to Cut Drug Costs - Whoopee

As is true of TGB commenters a couple of days ago, Crabby Old Lady is having trouble tracking all the threads of the Washington health care debate. Since she read, on Tuesday, about what the White House overstated as an “historic agreement to lower drug costs" – only two days ago – the conversation has already moved on. Crabby, however, hopelessly behind, is still on the drug story.

The essence of the agreement is this: pharmaceutical companies have agreed to cut drug costs by $80 billion over ten years, $30 billion of which will go to helping Medicare recipients through the doughnut hole in the prescription drug coverage (Part D). According to the White House website:

“As part of the upcoming health care reform legislation, drug manufacturers that participate in Medicare Part D will either pay a rebate to Medicare or offer a substantial discount of at least 50 percent on prescription drugs to seniors who fall within the infamous "doughnut hole" — payments between $2700 and $6153.75 not covered by Medicare.”

Additionally, 100 percent of the full cost of the drugs will count toward reaching the $6153.75 doughnut hole limit thereby reducing the time before full coverage resumes, thereafter paying 95 percent of drug costs.

Beyond that, there are few details and some questions. How many elders who fall into the doughnut hole will the annual $3 billion cover? What happens when the $3 billion is spent; who gets left out? How will the $50 billion additional monies be spent? There is only speculation and as Consumer Union policy analyst, Steven D. Finley, notes:

“...this still leaves the doughnut hole in place and hundreds of thousands, perhaps millions, of seniors on the hook for drug costs they cannot afford.”
The New York Times, 23 June 2009

So, begging the pardon of the president, Congress, AARP and virtually every news outlet, who are singing the Hallelujah Chorus for this munificence on the part of big pharma, Crabby Old Lady is not impressed.

There is still the doughnut hole which should never have been created; no one is discussing allowing Medicare to negotiate drug prices as the Veterans Administration does; and we pay nearly twice as much for prescription drugs overall as people in such countries as Canada and Germany. In fact, prescription drug prices in the U.S. are the highest in the world.

Drug manufacturers have scored handsome, increased profits from Part D in the three years since it went into effect, and they are poised for billions more if a health care reform bill provides tens of millions of uninsured Americans with coverage.

So $80 billion in concessions from the pharmaceutical giants would appear to be pocket change - not quite 2.5 percent of the $3.3 trillion the Department of Health and Human Services estimates will be spent on prescription drugs over the next ten years.

Although some elders will get some relief from the high drug costs imposed by the doughnut hole - and this is a good thing - Crabby Old Lady sees nothing historic about the new agreement.

In a rational government that placed the good of the people before exorbitant corporate profits, all this would be moot. Our legislators would be writing a bill that would expand Medicare to everyone or creating a single-payer system into which Medicare could be folded – either one including an intelligent drug policy.

Instead, the Democrats are tinkering with minutiae and the Republicans are screeching Socialism. Bah, humbug.

UPDATE JUST BEFORE POSTING THIS STORY: The New York Times editorial board this morning seems to have been reading over Crabby Old Lady's shoulder on this issue. Good for them.

At The Elder Storytelling Place today, Johna Ferguson: Summer 1942.

Comments

The bottom line for this issue is simply this: Why do elders have to be treated differently in healthcare coverage. We are still part of the human race. We ain't dead yet. And we are growing in numbers.

Health reform should mean that all coverage can vary in scope but if there is prescription coverage, there should be NO LAPSES in coverage for ONE group and not the others.

I applaud your constant ability to update us on the news affecting us. For me, I am so emotionally connected to healthcare, and the incredible disparities in coverage, I am barely able to discuss it rationally.

I just wonder what would happen if every person that read this blog, wrote a blog on the donut hole and told a friend to do the same, and then sent an email to their representatives protesting this as age discrimination....I wonder...what would happen?Ummmmmmm

Nancy B makes a good point - that there is no good reason elders should be treated differently from every other age group.

What IS historic about this moment in time is that as confusing and idiotic as the health care reform debate is in Washington, we have a chance right now to bring health care in the U.S. up to speed with other developed nations.

In a recent poll, seventy-two percent of Americans said they favor a single-payer system. If that is not a mandate, Crabby Old Lady doesn't know what is. Why aren't our president and Congress listening?

Why don't we just lower the age for Medicare by a few years every year and charge younger people more for it? My husband and I now pay over 7,000 dollars a year for a major medical plan with a 10,000 deductible. In our 50's, self employed, that is the best we can get and still, if one of us gets seriously ill, we'll go bankrupt. I'd be happy to pay that (though I wish it were less) for real insurance. I'd be even happier if that money was paid in taxes and went to help someone who was ill rather than paying for profits for an insurance company.
On the other hand, it is easy for me, with three elders in the family, to see why Medicare could go broke. My guess is over half a million has already been paid out in the last few years for knee replacements, cataracts, emergency surgery and hospital stays and a lot of expensive tests that proved nothing when the cause of some symptoms for one person is most likely over medication. But figuring out medication side effects doesn't pay and ordering thousands of dollars in tests does.
The question is not why do we pay for knee replacements for people over 65 and not for 64 year olds but why does a knee replacement cost 50,000? All three elders have had both knees replaced. And, if this is an epidemic (it has certainly improved the quality of life for all three) can preventive care stop the flood of knee surgery?
If there is no public plan option that will lead to universal care than it is all smoke and mirrors as far as I can see.
BTW, why don't we just stop drug companies from running millions of dollars worth of TV commercials?

Our first comment on this was to note that the pharmaceutical companies were hoping to defuse the growing demand for more stringent reform. As Crabby noted, what they have proposed is miniscule compared to the profits they expect to get over the same 10 year time. And I suspect that it is also a small fraction of what they would spend on advertising and lobbying over that time. They are willing to make this 'sacrifice' hoping to stall real reform.

Ronni: as usual, insightful comments by your readers. I'd just add that anyone who believes that Big Pharma is going to reduce drug costs to benefit anyone is either naive or smoking funny cigarettes..:)Dee

After writing my recent blog on health care reform I am so discouraged that I am ready to climb off my soap box on this issue. The Public Insurance plan is already being shot so full of holes that, if it passes at all, will be no more than a band aid and the naysayers will be able to say, "See, we told you so; health care reform didn't work."

The logical 'single-payer plan' that removes profit from health care is the only way that will bring down the escalating cost of health care, but it isn't even being considered.

My husband fell into the doughnut hole early last fall and we had a heck of a time paying for his drugs until January. Now we will reach the hole earlier this year. I don't know what's to come of us!

I hate to sound cynical, but I would save money buying over the counter for all but my BP meds. Geeeeeee..........

I echo Nancy B.'s thanks that you are keeping us informed on this confusing issue. My husband just got Medicare, but at 62, I find my Blue Cross Blue Shield premium going from $712 to $829/month. Outrageous! I also regret that the single-payer option is not on the table.

I wanted to think about this for a while before commenting. I have become increasingly pessimistic about the chances of getting real health care reform. I am beginning to think that our system of government is simply paralysed by money. The Senate is going to prevent any sort of meaningful health care to happen because of the money it gets from big drugs, big insurance and rich doctors.

Big Pharma is said to spend much more money on advertising than it does on research, but research is cited as the reason drugs cost so much. Many countries do not allow prescription drugs to be advertised on TV.

I need five meds to stay alive and kicking. Thank goodness, three of them are generic. The other two are still under patent. Since Medicare part D, which I do need, the price of both has gone way up.

My husband gets his meds through the VA, which is allowed to negotiate with drug companies for lower prices. His do not cost nearly as much. When people rant against government getting involved in health care, they should know that when it does, it can save us money.

Since our legislators get big contributions from guess who, they aren't about to rock the boat, at least not enough to hurt the bottom line of their benefactors. They don't want to take on the big insurance companies. either, although the administrative costs under Medicare are much, much less.

A dirty secret of medicare is that when a senior has 6 cheap drugs and one expensive one, the pharmacy charges full price (not $4)to show more cost so the senior moves closer to the donut hole and they get cash for the drugs. It's all about the money the employees at the drug store are nice, their bosses not so much.

Does anybody know or even think about what percentage of the cost of a medication goes into advertising and is past on to the consumer? I cannot find any, ANY discussion about this anywhere. How many drug commercials do you see on TV, in an hour?..Open up your newspapers, your magazines, national geographic even has more drug adds than it used to.. The USA is one of a very few that allows direct marketing to consumers..
Methinks one reason, this is not an "issue for discussion" is because it involves the media..The drug companies commercials pay the bills.next time you are watching a news program and you see a drug commercial..think twice and ask..who is paying for this news?..

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