Pause ... NOT!

  • by: |
  • 11/13/2006
Revoke non-interference and replace it with "government pricing?"


Says who? See below.

"We are seeing large-scale negotiations with drug manufacturers, but they are conducted by private drug plans, not by the government. … A robust marketplace with a lot of competitors has driven down prices. It's the magic of the market. To assume that the government, in our genius, could improve on this belies the reality of a complex task."

− HHS Secretary Michael Leavitt, The New York Times, 11/13/06

"Both The Non-Partisan Congressional Budget Office And Medicare Actuaries Have Said They Doubt The Government Could Negotiate Lower Costs Than The Private Sector. The theory behind Part D is that market forces and competition among drug plans, overseen by government, can achieve better results than a government-run program. The multitude of plans allows seniors to pick one that best meets their needs."

"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06)

"Government Price Negotiation "Could Leave People Without Drugs That Manufacturers Decide Aren't Sufficiently Profitable Under The Plan. Medicare recipients account for half of all drug prescriptions. With that kind of clout, government might try to dictate prices, not just negotiate them. This could leave people without drugs that manufacturers decide aren't sufficiently profitable under the plan. The VA plan illustrates the point. It offers 1,300 drugs, compared with 4,300 available under Part D, prompting more than one-third of retired veterans to enroll in Medicare drug plans."

"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06

"Part D Seems To Be Working. Average monthly premiums this year were $24, one-third lower than projected, according to Centers for Medicare and Medicaid Services. More than 75% of seniors say they are satisfied with the benefit, five recent independent surveys found."

"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06

"It Is Not Obvious That Allowing The Government To Negotiate With Pharmaceutical Companies Will Lead To Lower Prices Than Those Achieved By Private Drug Plans. Private plans like Kaiser or United are able to negotiate deep discounts with pharmaceutical companies precisely because of the plans' ability to say no – the ability to include some drugs and to exclude others, allowing the market to judge the resulting formulary. On the other hand, when the government negotiates, its hands are tied because there are few drugs it can exclude without facing political backlash from doctors and the Medicare population, a very influential group of voters."

Stanford Business School's Alain Enthoven and Kyna Fong, Op-Ed, "Pelosi On Drugs," The Wall Street Journal, 11/13/06

"By Acting As One Large Buyer, The Government Will Cause Price Discounts To Become More Expensive For Pharmaceutical Companies. In other words, the minimum price that the pharmaceutical company is able to accept increases. All else equal, this will lead to higher, not lower, prices. When private drug plans are negotiating individually with pharmaceutical companies, those companies have the power to 'price discriminate,' meaning they can charge lower prices to some drug plans and higher prices to others. This ability allows for large discounts."

Stanford Business School's Alain Enthoven and Kyna Fong, Op-Ed, "Pelosi On Drugs," The Wall Street Journal, 11/13/06

"Neither Economic Theory Nor Historical Experience Suggests Government Price Negotiation Will Achieve Lower Drug Prices. Congressional Democrats need to be careful in making the logical leap from market share to bargaining power. Empowering the government to negotiate with pharmaceutical companies is not necessarily equivalent to achieving lower drug prices. In fact, neither economic theory nor historical experience suggests that will be the outcome. Members should think carefully before jumping on the bandwagon – this promise may bring just the opposite of what was ordered."

Stanford Business School'svAlain Enthoven and Kyna Fong, Op-Ed, "Pelosi On Drugs," The Wall Street Journal, 11/13/06

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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