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Tilting at Windmills

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March 16, 2006
By: Kevin Drum

HOW TO SCARE A REPUBLICAN....The LA Times reports that the Medicare prescription bill has become such an albatross for Republicans that they're actually willing to brace yourself stand up to a major campaign contributor and allow the government to negotiate lower prices for drugs:

The vote to allow the government to negotiate for discounts on drugs marked a major policy reversal for the Senate and a rare move against the pharmaceutical industry, one of the leading donors to federal political campaigns, with most of its money going to Republicans. Negotiations for drug discounts were barred under the 2003 law that created the drug benefit.

....Democrats have long said that the government, which spends billions of dollars annually on pharmaceuticals through Medicare, ought to be able to negotiate with drug companies for volume discounts, as other big customers do.

But it took until Wednesday for enough Republicans to agree and for the Senate to take action.

See? Republicans can do the right thing after all if you just make it clear enough that their jobs are in danger. Later this year, as the dreaded doughnut hole comes into play and seniors realize how much their drugs are going to cost them under the Republican plan, expect to see action on that front too.

And in related news (see the end of the same story for details), President Bush continues to dodge and weave about the cost of the program. The name "Richard Foster" is slowly seeping into people's consciousness.

Kevin Drum 11:18 AM Permalink | Trackbacks | Comments (59)

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Are you sure it's not more kabuki? One of these votes where the House passes a provision, the Senate passes a provision, Republicans in both houses proudly proclaim how they voted to lower drug prices, then in the conference committee the important part is stripped out and never actually becomes law.

Posted by: SP on March 16, 2006 at 11:21 AM | PERMALINK

SP: Sure, that's possible. And the bill only authorizes the president to negotiate, it doesn't require it.

Still, it shows how scared they are.

Posted by: Kevin Drum on March 16, 2006 at 11:25 AM | PERMALINK

on Foster:

http://www.washingtonpost.com/ac2/wp-dyn/A6339-2004Mar18

Posted by: Ace Franze on March 16, 2006 at 11:26 AM | PERMALINK

they're actually willing to brace yourself stand up to a major campaign contributor and allow the government to negotiate lower prices for drugs

CLICK THE LINK. ALWAYS CLICK THE LINK. Kevin Drum is LYING when he implies drug companies are NOT already negotiating prices.

Link

"Ken Johnson, senior vice president of Pharmaceutical Research and Manufacturers of America, the industry trade association, said drug companies were already negotiating prices -- not with the government, but with the hundreds of prescription drug plans offering to insure Medicare recipients."

Posted by: Al on March 16, 2006 at 11:28 AM | PERMALINK

If it takes a disaster this big - what, $600 billion, right? - to force GOP senators to vote against an industry lobby...how many $600 billion disasters can the country afford before it just falls down and goes "oof"?

Posted by: brooksfoe on March 16, 2006 at 11:29 AM | PERMALINK

Of course, the Democrat spin the the Medicare drug plan has been a disaster has been debunked by actual data:

Survey Refutes Criticism of Medicare Drug Plan

By Bill Brubaker
Washington Post Staff Writer
Monday, March 13, 2006; 3:33 PM

A majority of senior citizens in a recent poll say they had no trouble using -- or signing up for -- the controversial 10-week-old Medicare prescription drug plan, health insurance officials said today.

The survey of more than 800 seniors differs from assertions by politicians and health and senior citizen advocacy groups that many Medicare enrollees have had difficulty choosing a drug plan from among the dozens that are being offered.

http://www.washingtonpost.com/wp-dyn/content/article/2006/03/13/AR2006031300983.html

Will the "Reality-Based Community"(TM) refuse to accept actual scientific data, and continue their faith-based belief that the plan has not been working?

Good question. This is certainly a test for the "Reality-Based Community". On the one hand, there is actual scientific data that the plan is working. On the other hand, there is the left-wing's fervent hope that plan isn't working.

Which will win out?

Let me guess: the "Reality-Based Community" will ignore the actual scientific data and cling to their hopes and dreams, even in the face of the data.

*snicker*

Posted by: Al on March 16, 2006 at 11:30 AM | PERMALINK

Incidentally...the bill authorizes the PRESIDENT to negotiate?

Why not the appropriate civil servant in the Medicare program? This looks like kabuki.

Posted by: brooksfoe on March 16, 2006 at 11:30 AM | PERMALINK

Al:

Then why are Republicans agreeing to REVERSE THEMSELVES and allow the president to negotiate lower drug prices?

If this was *already happening*, they'd have no need to make this move in contradiction to the original legislation -- right? :)

Bob

Posted by: rmck1 on March 16, 2006 at 11:39 AM | PERMALINK

Al,

Thanks for all of your shill work for Big Pharma.
It saves Tom Brosz so much time.

Posted by: thethirdPaul on March 16, 2006 at 11:46 AM | PERMALINK

Al, yes, drug companies have been negotiating on prices, but not with the government. Only with insurance companies. Did you skip that part when you clicked the link??

Posted by: EM on March 16, 2006 at 11:46 AM | PERMALINK

Al on March 16, 2006 at 11:30 AM:

...there is actual scientific data that the plan is working.

If by working, you mean federal money rewarding pharmaceutical donors, a ballooning entitlement program, anemic registration rates, and a president who needs to campaign for something already signed into law, then its working splendidly.

Posted by: Jon Karak on March 16, 2006 at 11:47 AM | PERMALINK

Wow!

I just realized that the dreaded "doughnut hole" is going to hit later in the year. Guess what will be uppermost in peoples minds when they go to vote in the mid-term election.

Posted by: Jim Ramsey on March 16, 2006 at 11:53 AM | PERMALINK

Most of the time polls should be given weight, but I am of an age where many of the people I encounter are senior citizens. My office also handles the payment of the prescription drug bills for several seniors. Most seniors have had some problem or other deciding which plan is best for them. Some still haven't. They are sorting through their many options. Some of them may actually have made wise choices, but none of them have much confidence in the choices they made. I know my office staff isn't completely confident that they have made great choices for some of the seniors we administer. My staff is convinced they made the best choices possible under the circumstances. Some seniors, my mother in law for example, believe the program they had to give up was better than the one they bought. Some of the seniors are going to encounter the donut hole about September and they are going to be pissed.

This is an issue where you listen to your senior friends first and to the polls second. I am normally not a great supporter of antedotal evidence over polling, but in this case the seniors are all talking about the program and not very favorably. You need to take a good hard look at any poll saying seniors aren't a little confused or disappointed.

Posted by: Ron Byers on March 16, 2006 at 11:55 AM | PERMALINK

It's all going to be to little to late.
Senior citizens got the plan they voted for - and since they vote for Republicans - the voted for the pharmaceutical industry over themselves. No suprise there.

They voted for Bush - Bush only has one constituency, corporate American - individual US cizitens don't matter, and have never matter in Bush's American.

So I don't really care that senior citizens can't get their meds - they voted for Bush - and now they reap their just reward. I don't see why we have pick up the tab for senior citizens that made believe they had entitlements. They are entitled to reap exactly what they voted for - Bush and his stupid policies - and therefore the new non-working drug bill. Did they really think Bush was a compassionate conservative? What morons

Bush doesn't care about senior citizens and he isn't running for re-election and isn't worried about his non working policies. Republicans voted for Bush's drug (non-)benefit as did Dems and now - to bad, so sad. They got exactly the government they voted for so what's the big deal?

The war is going really, really bad too - but Bush isn't really Preznit - just the Preznit face so I put the blame squarely on senior citizens and their combine gross sutipidity of voting for conservative and jerks like Bush and Dick Cheney.

Posted by: Cheryl on March 16, 2006 at 11:59 AM | PERMALINK

Ron Byers:

It looks especially bad for Republican incumbents because, while seniors don't vote a party bloc, they ...

1) Are extremely enfranchised as voters. They don't tend to respond to being dissed by getting disillusioned and staying home. They just vote for the other guy.

2) Were sold down the river on Part (D)isaster by their most powerful advocate, AARP. Hissssssssss !

3) Were one of the most solid blocs for Bush -- thus any cracks in support for him are that much more significant proportionally.

4) Even if many seniors wind up with a good deal and/or break even in the end, the horror stories of their friends and neighbors who got the short end will still rankle them enough to make a strong solidarity vote a major threat.

Bob

Posted by: rmck1 on March 16, 2006 at 12:05 PM | PERMALINK

Good, grief, Al, haven't you noticed that drug companies have been negotiating prices with insurance companies for years? When has that ever been disputed? What other dog-bites-man stories do you have to tell us?

Posted by: modus potus on March 16, 2006 at 12:05 PM | PERMALINK

and here in Michigan the repub-controlled state govt.just passed a minimum wage hike when polling showed their hard-assed stance against it was going to cost them in November.

Yeah --- they're the party that stands for something and never changes with the polls --- RIGHT.

flip-flop ... flip-flop ... flip-flop ... flip-flop

Posted by: G.Kerby on March 16, 2006 at 12:08 PM | PERMALINK

So far, from what I've heard (and not just from Bush), costs are lower than expected. Still, I would like to see more hard data. It is a government program, after all.

Al quotes a poll that shows senior citizens are doing all right with it. The Left immediately attacks it because it was commissioned by the insurance industry.

Are we setting up a rule now that we can toss out any poll commissioned by someone with an axe to grind? You might have a good case, but that would also put some of the most widely-quoted polls on this board in some dispute.

The survey itself is linked here, along with an earlier one for comparison.

Posted by: tbrosz on March 16, 2006 at 12:13 PM | PERMALINK

tbrosz:

"It is a government program, after all."

*rolling eyes*

Bob

Posted by: rmck1 on March 16, 2006 at 12:15 PM | PERMALINK

Kevin,

This is an interesting development, but you should prominently note that the measure passed in the Senate is merely advisory and does not have the force of law.

The AI routine is comical. Having a rational basis for your opinion does not mean seizing upon the first HMO lobbyist sponsored poll you find with a favorable head line and reading and exagerating the findings.

"President George W. Bush acknowledged on Tuesday that the new Medicare prescription drug program has been plagued by problems in the early stages."

Related links:
http://www.chicagotribune.com/news/nationworld/chi-0603150177mar15,1,5918886.story?coll=chi-newsnationworld-hed
http://www.signonsandiego.com/news/politics/20060216-9999-1n16medicare.html
http://www.kaisernetwork.org/daily_reports/rep_index.cfm?hint=3&DR_ID=35960
http://www.democrats.reform.house.gov/Documents/20060203170040-50002.pdf
http://www.democrats.reform.house.gov/Documents/20060221101849-23735.pdf
http://www.democrats.reform.house.gov/story.asp?ID=1023
http://www.washingtonpost.com/wp-dyn/content/blog/2006/03/15/BL2006031500946.html
http://www.grandforks.com/mld/grandforks/news/nation/14098813.htm

Posted by: Catch 22 on March 16, 2006 at 12:15 PM | PERMALINK

There's nothing like Bush-loving trolls defending a bloated, federal government entitlement.

You go girls!

Posted by: NSA Mole on March 16, 2006 at 12:17 PM | PERMALINK

Bob:

By which I meant that any time a government program says it's coming in for less cost than expected, it's good news, but I'd really like to see a lot more confirmation of it.

Posted by: tbrosz on March 16, 2006 at 12:18 PM | PERMALINK

There is nothing wrong with letting the government nogotiate for volumen discounts as long as the pharmaceutical companies are free to decline any offer they dislike.

Posted by: Yancey Ward on March 16, 2006 at 12:19 PM | PERMALINK

tbrosz:

I'll give you credit for being ideologically consistent, anyway -- and not just knee-jerking in defense of it because it's Bush's program.

But still, there's an economies of scale issue that make the idea of large programs with a single set of administration rules potentially much cheaper than the anarchy of competition.

Of course, that doesn't apply all that much to Part D, because it was designed to get Uncle Sam's mouth around as many private insurance cocks as he can manage.

The fiduciary equivalent of blowing a football team.

Bob

Posted by: rmck1 on March 16, 2006 at 12:23 PM | PERMALINK

What we need is a bill that MANDATES the Medicare administrators to negotiate the lowest possible price. Anything short of that is crap. The drug companies will see their buds in Congress need to take the heat off for a while, they'll cut prices a bit for, oh, say a year, then jack them back up after the elections.

Posted by: brooksfoe on March 16, 2006 at 12:25 PM | PERMALINK

rmck1,

If the economies of scale offered by government buying of drugs is so useful, why not apply it to the buying of food, clothing, housing, automobiles, computers, etc.?

Posted by: Yancey Ward on March 16, 2006 at 12:27 PM | PERMALINK

brooksfoe,

What constitutes the "lowest possible price"? Do you mean the best deal the government can get through nogotiation, or do you mean something else?

Posted by: Yancey Ward on March 16, 2006 at 12:30 PM | PERMALINK

As Al said, click the link. In this case, the article he linked to in regard to the survey. Yep, the numbers are what they say. Of course he didn't mention it was an AHIP sponsored survey (the folk who were behind the push). The article also notes how the surveyed individuals were selected - all were those who'd gotten onto the plan, half were 'dual choicers' put on automatically. There's no provision for those who haven't changed for whatever reason - to include confusion and uncertainty in selections.

CAVEAT: A survey commissioned by a biased party does not automatically disqualify the survey. It merely means (to me) that it should be taken with some degree of skepticism. In this case it's worth noting that the surveying party - Ayres, McHenry & Associates - used to specifically identify itself as biased for Republicans. (Their "who are we" page says, "Ayres, McHenry & Associates, Inc., is a national public opinion and public affairs research firm located in Alexandria, Virginia, that specializes in providing research and strategic advice for corporations, associations, and Republican candidates for public office.")

Posted by: Kirk Spencer on March 16, 2006 at 12:33 PM | PERMALINK
Incidentally...the bill authorizes the PRESIDENT to negotiate?

Why not the appropriate civil servant in the Medicare program?

Because laws very frequently assign authorities to the President which he then delegates via executive order; this makes it so that not every rearrangement of duties within the executive branch requires new legislation. It also reflects the nugget of truth at the heart of the "unitary executive" theory (indeed, the executive branch envisioned by the Constitution is largely unitary -- the name "unitary executive" is completely accurate -- where the theory goes wrong is in suggesting that "unitary" somehow applies unaccountable and often all-powerful.)

Posted by: cmdicely on March 16, 2006 at 12:33 PM | PERMALINK

The Kaiser Family Foundation has been doing tracking polls with seniors on the drug benefits since 8/04. There is a uniformly negative majority in those polls. AP polls taken since the beginning of the year show 2/3 of the eligibles confused about enrollment and coverage (and why shouldn't they be?- almost every Medicare beneficiary is confronted with a choice of at least 40 plans). CNN/Gallup polls show much the same thing, with more than half of the seniors polled viewing the program negatively.

Al, like every other dishonest idiot, only likes polls that agree with his preconceived notions. Having been given that information by the lunatic fringe websites he frequents and by RNC talking points, he delves no further.

By the by, polls that measure satisfaction with and perception of the program are only tangentially related to whether the program "works". Al doesn't understand this, because frankly Al takes too many of Big Pharma's products to think straight.

Posted by: solar on March 16, 2006 at 12:34 PM | PERMALINK

Tbrosz,

"So far, from what I've heard (and not just from Bush), costs are lower than expected."

It would help if you actually provided a source. No one I know of think costs are anywhere near what Bush promised they would be when the law was voted on - $400 billion over ten years. Who is saying they are lower and based upon whose expectations?

Furthermore, cheaper than expected isnt so good when its still far more than advertised when it was voted on, and the expectations are high precisely because of the lousy way the law was written. Allowing the government to negotiate could ultimately save $80 billion per year.http://www.ourfuture.org/docUploads/Excess%20Cost%20-%20Med%20Drug%20Benefit.pdf

"It is a government program, after all."

Yes, excellent apologist rationale for all of Bush's incompetence. The war in Iraq is a government program after all. The illicit spying program is a government program after all....

Posted by: Catch22 on March 16, 2006 at 12:34 PM | PERMALINK

Republicans standing against wealthy industry, I don't think so!

Posted by: Shawn on March 16, 2006 at 12:41 PM | PERMALINK

Do you mean the best deal the government can get through nogotiation, or do you mean something else?

Yeah, just the best deal the gov't can get through negotiation. Though maybe there also ought to be some way to circumvent monopoly drug producers in some cases - reimportation or buying from foreign producers.

Posted by: brooksfoe on March 16, 2006 at 12:44 PM | PERMALINK

My family is just a big bunch of flip-floppers. Three of my brothers and my nephew have secretly confided in me (Politics being such a sore spot between us) that they no longer know why they are voting Republican. I asked them., "What has this administration done for them?" (I know, I know, Ask not what...) They just shrugged. My mom admits that her fixed income melts away in fewer days. No one in the family has topped the $100K a year income, so they aren't even a blip on this administration's radar.

Posted by: nutty little nut nut on March 16, 2006 at 12:50 PM | PERMALINK

It was my understanding many years ago that there was quite a bit of administrative work in the Medicare program concerning drug pricing, in that one Medicare law provided that drug companies should only charge "the lowest price paid by the general public."

This may have changed, but at the time "the lowest price" was not the lowest price charged by the drug company for the drug, the lowest price charged by the drug company was actually to some HMO chain, while medicare actually paid a much higher price.

Perhaps the factual backgrond has changed since then, but I'm not sure why, in this context, the lowest price should not simply mean the lowest price.

Posted by: hank on March 16, 2006 at 12:50 PM | PERMALINK

I mean, isn't even the Pentagon mandated by statute to buy everything from the lowest bidder? Not that they ever would, for example, decide to buy the Eurofighter just because it costs half as much as the JSF.

Posted by: brooksfoe on March 16, 2006 at 12:52 PM | PERMALINK

Yeah, just the best deal the gov't can get through negotiation.

I'm sure Yancey knew that, brooksfoe; he just wanted to introduce the Dread Specter of Socialism (I guess conspiracy nut is on a break).

Posted by: Gregory on March 16, 2006 at 1:03 PM | PERMALINK

brooksfoe's post brings to mind and interesting thought, surely to be touched upon if this thread blossoms into a full-bore health care food fight.

For all those who are waiting, hands poised above keyboards, to jump in and assert, as Yancy almost did above (almost, mind you) that if the government becomes the single payer for health care, that everything will go to hell in a handbasket -- well consider this.

Consider how terribly, awfully badly all of those military contractors are doing considering they have no choice but to -- horror of horrors, negotiate with the Federal government.

Just think how difficult of a time these companies have with research and developement. Why, I've even heard tell they have some difficulty getting billions of dollars to work on a missle defense program which apparently doesn't work.

Posted by: hank on March 16, 2006 at 1:07 PM | PERMALINK

And on Yancey's other suggestion, that the gov't apply its economies of scale to prices on all kinds of other things it buys: yeah, it should. It should definitely get a better deal from GM on all those cars the Secret Service agents drive. Especially since they cost so much more to maintain than Toyotas.

Posted by: brooksfoe on March 16, 2006 at 1:07 PM | PERMALINK

Don't like to be too cynical, but the Medicare prescription bill is so egregious with its hidden costs, no price negotiations and donut holes, that I have to believe correcting it is all part of a large plan to enhance the image of the GOP congress in time for the 2006 elections. Can Rove really be that prescient. If so, one has to fear his genious as well as admire it.

Posted by: lugbolt on March 16, 2006 at 1:19 PM | PERMALINK

Yancey - slippery slope?!

I expected better from you. Really.

Posted by: Tripp on March 16, 2006 at 1:33 PM | PERMALINK

Brooksfoe,

I asked the question because, as Hank points out, the "lowest price available" is open to interpretation. I also asked another question to which I received a half-answer. Are drug companies free to decline the government's offers? Reimportation is no solution to a declined offer to a monopoly producer since the monopoly producer is the one that actually produces or licences out the drug/s in question- they ultimately control the amount produced, and reimportation from unlicensed producers is considered theft of intellectual property. If a drug company refuses the government offer, would you advocate compulsion to force a deal?

As to your other reply, it really doesn't answer my question. The "economies of scale" is one of the justifications for the government paying for seniors' medications rather than having those with means pay for drugs themselves. The very same argument would apply to all marketed goods- the government could make the purchases for all of us and distribute them. Why are pharmaceuticals different?

Posted by: Yancey Ward on March 16, 2006 at 1:53 PM | PERMALINK

Pharmacists get hurt too. They have to wait for amonths and months to get paid. One state should pass a law that requires HMOs to pay their bills from pharmacists and physicians within a month, or else they will be charged, and must pay, 20% per month on the amount they owe the pharmacists and physicians. That should start the ball rolling.

Posted by: Post-Toll on March 16, 2006 at 2:00 PM | PERMALINK

Well, pharmaceuticals are different because, and this is where the basic disagreement begins, pharmaceuticals, unlike, say, DVD players are not an "optional" purchase for the general public.

Obviously, if Wal-Mart succeded in monopolizing the entire United States market for DVD players, it could, through its monoply power, probably negotiate a lower rate for the DVD players it purchased. Just as obviously, the company making the DVD players would have the option to not sell to Wal-Mart. Of course, you would also expect Wal-Mart, consistent with its own intersts, to use the monopoly to raise prices to increase profit.

As Yancy points out, any item could, in theory, be purchased by the government exclusively. Many items, such as military hardware, already are. I don't think military hardware is a good analogy to drugs or health care because, IMHO, the purchase of military hardward is too influenced by emotion rather than actual need, but thats me.

Yancy and others will never admit that health care is not an optional purchase and should be an entitlement of either citizenship or residency.

Posted by: hank on March 16, 2006 at 2:12 PM | PERMALINK

And, somewhat ironically given the current state of affairs, the logical, not troll argument which you would expect against expansion of medicare is the current U.S. military budget.

The argument would be that there are no cost controls, or at least no cost controls that work, in the Defense budget because every politician wants to be seen as strong on defense, and more spending on defense equals being "strong."

The second part of the argument would be that if health care joined defense as the exclusive purview of the Federal government, politicians would endlessly vote to increase health care spending, as they now do to increase military spending.

Of course, it is not as if you can't find examples of other countries who manage to do the health care thing better, so the issue is joined.

Posted by: hank on March 16, 2006 at 2:18 PM | PERMALINK

hank,

I also listed food and housing as items to be purchased by the government, not just optional purchases like DVD players or some automobiles. However, the distinction you make is irrelevant since the "savings" generated from one class of purchases could be used to buy more and better of the "non-optional" we are addressing in this thread.

As I wrote in my first comment, it is perfectly acceptable to me to have the government nogotiate volume discounts on the items it purchases, but I want to know what is considered "nogotiation", and what is not. Some of our less insightful commenters think this is a rhetorical question, but it clearly is not.

Posted by: Yancey Ward on March 16, 2006 at 2:29 PM | PERMALINK

but I want to know what is considered "nogotiation", and what is not. Some of our less insightful commenters think this is a rhetorical question, but it clearly is not.

In that case, Yancey, what kind of negotiation would be acceptable for you have the government nogotiate volume discounts on the items it purchases?

Posted by: Gregory on March 16, 2006 at 2:44 PM | PERMALINK

Don't like to be too cynical, but the Medicare prescription bill is so egregious with its hidden costs, no price negotiations and donut holes, that I have to believe correcting it is all part of a large plan to enhance the image of the GOP congress in time for the 2006 elections. Can Rove really be that prescient. If so, one has to fear his genious as well as admire it.

I'm cynical enough to believe that the whole Dubai port thing was a setup to help repubs distance themselves from the boy-blunder while at the same time portraying themselves as able to work in a bi-partisan manner. If Haliburton ends up with the new contract, that's just gravy.

Posted by: G.Kerby on March 16, 2006 at 2:58 PM | PERMALINK

Gregory,

A true negotiation is one in which each party is free to make or not make a deal. For example, you want to buy a special type of apple from me that only grows on my land. You make an offer, and I am free to accept or reject your offer, and you are free to offer more per apple, offer to buy more apples, or walk away. I am free to accept your offers or reject them.

Posted by: Yancey Ward on March 16, 2006 at 3:07 PM | PERMALINK

A true negotiation is one in which each party is free to make or not make a deal.

Gee, Yancey, thanks for the definition. Now, what kind of negotiation would be acceptable for you have the government nogotiate volume discounts on the items it purchases?

Posted by: Gregory on March 16, 2006 at 3:19 PM | PERMALINK

Just to follow up, Yancey,

Did you mean to imply that the pharma companies should have the right not to sell to the government if they consider the price too low, and the government has the right not to buy if they consider the price too high?

Since, as you note, the above is the very essence of negotiation, do you mean to imply that you suspect pharma companies might be compelled somehow to sell at a price that is too low?

And if that's the case, do you have any basis for that belief?

Posted by: Gregory on March 16, 2006 at 3:23 PM | PERMALINK

Gregory,

What part do you not understand? I earlier asked if the drug companies are free to decline the government's offers for, lets take your example, they consider the offers too low? By my definition, they would be free to do so, and the reason they choose to do so is irrelevant- maybe they just don't like dealing with the government. My definition of nogotiation, which you seem to accept, allows for this (and, incidentally, describes precisely what I find acceptable for the government to do, but I will elaborate).

For me, an acceptable response to a declined offer would be for the government to negotiate with another drug maker for a similar product, or, in my example, for you to go and buy someone else's apples. What is not acceptable is for you to sneak onto my land and steal my apples.

Posted by: Yancey Ward on March 16, 2006 at 3:48 PM | PERMALINK

"For me, an acceptable response to a declined offer would be for the government to negotiate with another drug maker for a similar product, or, in my example, for you to go and buy someone else's apples. What is not acceptable is for you to sneak onto my land and steal my apples."

Only...in this case the "apple" is the intellectual property right granted by - get this - the party you're calling the thief! Basically you're calling them theives for taking (in the name of the public good) property that they [the "thieves"] gave in the first place.

So wwere you going somewhere with this?

Posted by: chaboard on March 16, 2006 at 4:53 PM | PERMALINK

The prototype government negotiated pricing for pharmaceuticals in the United States is found with VA.

VA Offers Better Prices Than What Will Be Available Through New Medicare Drug Plans, Study Says

Under the GOP way, thousands of individual plans negotiate independently for drug prices. If the Government were permitted to negotiate on behalf of all of its beneficiaries in the same way as the VA it would be much cheaper.

As for the comment about "best price" yes there is a thing called "best price" in the complex world of Medicare and Medicaid, but surprise it often isnt really the best price, with many purchases in fact excluded from the calculation. Its a best price in name only and is an artificial construct with rules and regulations and exclusions.

The fact is that the VA price if often significantly lower than the so called "best price."

Posted by: Catch 22 on March 16, 2006 at 5:03 PM | PERMALINK

chaboard,

The distinction you are attempting to make is irrelevant. The government allows me title to own my house as long as I pay a tribute called the property tax. Does this give my town the proper right to come and set up office in my living room? How about libraries buying books protected by copyright, or the government purchasing any item covered by patent or copyright in some way?

You asked where I am going with this? Have you not read the other comments I have made? I am trying to determine what is meant by "negotiation for volume discounts" by some of the commenters. Your comment would lead me to believe that you would define it as the government making an offer that the drug companies would not be allowed to refuse. Am I wrong?

Posted by: Yancey Ward on March 16, 2006 at 5:08 PM | PERMALINK

For me, an acceptable response to a declined offer would be for the government to negotiate with another drug maker for a similar product

Yancey, private insurance companies already negotiate with pharmaceutical companies on prices; it works much the way you describe, and of course either side can refuse. Also, of course, that refusal can come with other unpleasant consequences -- just to continue your analogy, if you don't sell me the apple at my price, I might not let you fish in my stream, even if you were willing to pay my for the privilege.

I for one presume that it's a given that pharma companies could refuse to sell to the government for any reason. The government would then, as some private insurers do, not cover the given drug. They would also be perfectly in their rights not to also offer coverage for, say, the latest anti-impotence drug, or that company's particular antihistamine. Such tactics could indeed put pressure on the company to agree -- as you pointed out, negotiation is a two way street, and the company presumably wants to sell to such a large market.

In short, Yancey, I advocate the government having and using the same powers of negotiation as any actor in the free market -- powers that are currently, thanks to the so-called free-market supporting GOP, denied by law. Really, if you're imagining that a pharma would be compelled to sell against its will, that would smack of loony libertarian paranoia to me. I do hope that isn't the case.

Posted by: Gregory on March 16, 2006 at 5:29 PM | PERMALINK

Gregory,

Then we seem to agree. You are right, the companies would likely reach an agreement under such circumstances as you described, but they would retain the leverage of not agreeing to do so. However, I was trying to divine how many here would rather just use the force of law to compel a low/lower price for patented pharmaceuticals. You do have to admit that some here would like to do just that.

Posted by: Yancey Ward on March 16, 2006 at 5:47 PM | PERMALINK

However, I was trying to divine how many here would rather just use the force of law to compel a low/lower price for patented pharmaceuticals. You do have to admit that some here would like to do just that.

No, Yancey, I don't have to admit that at all. Can you point to a single comment here that advocates what you claim (positively, please -- no, failing to answer your question doesn't count)? Would you care to name names about whoc the "some here" are? (If I'm going to call out Amy Sullivan for using that intellectually dishonest straw man, I'm certainly going to call you out as well.)

If not, I suggest that it is indeed your loony libertarian paranoia showing.

Posted by: Gregory on March 17, 2006 at 9:11 AM | PERMALINK

Whoa, hold on there, Yancey, I almost didn't catch this bait and switch:

However, I was trying to divine how many here would rather just use the force of law to compel a low/lower price for patented pharmaceuticals.

Using the force of law to compel a low/lower price for patented pharmaceuticals is one thing if the seller must sell, and quite another if the seller has the option not to. I have no objection to having price caps mandated by policy -- again, Yancey, private insurance companies already do.

And anyway, as I understand it, your problem is with is having the transaction itself mandated -- after all, you point out, in the free market one is free not to transact for any reason, irrespective of price.

So your stated concern isn't about a government policy that places a price cap on pharmaceuticals, unless the company must sell -- indeed, it's the compulsion to sell that's the problem, not any hypothetical cap. So claiming that your questions are about "trying to divine how many here would rather just use the force of law to compel a low/lower price for patented pharmaceuticals." is a trifle dishonest, isn't it?

Posted by: Gregory on March 17, 2006 at 9:19 AM | PERMALINK




 

 

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