Other countries consumers are able to get lower prices because they forced pharma companies to the bargaining table.
Lets do the same.
The market forces will allow a new equilibrium.
I am not woried about the pharma firm not being able to invest any more in R&D. Consumers and government sponsor plan understand were is their interest.

Even Bob Corker (Rep-TN) was signing onto the Democratic proposal for reform of the Prescription Drug Benefit mess. If a rightwinger who ran as a racist is for this - the Wall Street Journal should just starting wave the white flag.

The only problem is that is (a) the drug companies are telling the truth and (b) Drum's program works, the result will not be lower prices in the U.S., but higher prices in the rest of the world, which will increase both the trade and budget deficits, without making any actual voters happy. So that is kind of a problem for the Democrats.

Oddly, though, none of the pieces really explains what the problem is. They just repeat complaints from the pharmaceutical industry that Medicare is so big that "negotiation" is tantamount to price controls, and that's a bad thing.

Fortunately, since you can't understand the problems with the liberal approach to Medicare, I'm here to explain to you.

First, as the Washington Post points out "The cost was projected to rise to $45 billion next year, but Medicare has received new bids indicating that its average per-person subsidy could drop by 15 percent in 2007, to $79.90 a month." So in reality there's no problem at all.

Second, as the Washington Post also points out, "If government price controls were effective, the theory goes, they could significantly lower drug-company profits and discourage medical innovation." This would be very bad for everyone, especially seniors. Medicare price controls would cause many people to die due to the lack of medical innovation.

Third, the liberal Medicare drug control plan would be a violation of privacy. "Limiting choice would be unacceptable to many Medicare beneficiaries, said Sen. Charles E. Grassley (R-Iowa), outgoing chairman of the Senate Finance Committee. "I don't think seniors want the government in their medicine cabinets," he said."

Finally, any "fix" you have will probably not generate enough revenue to fix the so-called "doughnut hole" you libs complain about all the time.

Unfortunately, liberals want another feel-good big government price control plan to solve a problem that doesn't exist.

What would Harry and Louise do?

Kevin Drum wrote, "There's no reason American taxpayers should be subsidizing healthcare for the rest of the world, after all."

Well, in some cases, there is. AIDS is a disease for which there is no cure, but anti-retrovirals can keep the disease in check, in many cases for years, at a cost of under $100 per patient per year. If we spend just one or two billion dollars helping to provide anti-retroviral drugs to some hard-hit countries in southern Africa, where in some cases over 20 percent of the population is HIV-positive, we can prevent a generation of children from growing up as orphans; we can prevent a generation of girls from prostituting themselves to raise funds to pay their school fees; for the cost of about a week of the war in Iraq (for under $6.00 per year per American) we can create a stable future for 100 million in Southern Africa. It's the right thing to do, but it is also an investment in global stability.

U.S. foreign aid for basic health is pathetically small. Excepting AIDS, the U.S. contributes less than $1 billion per year for international health. Yet lives can be saved with vaccinations costing less than $1.00.

And don't forget, we're on the verge of eraticating polio. Once we eradicate polio worldwide, it will not be necessary to immunize every U.S. baby against this crippling disease. That alone will save about as much as the U.S. currently spends on international basic health care.

Of course, I do agree with Kevin that medicare should have an MFP clause (with possible exceptions) from U.S. pharmaceutical manufacturers.

Albot brings up the strawman of price controls and y81 blatently lies for the drug cos.
Private sector prioritizes profit driven research for high cost drugs for the wealthy elderly while doing nothing for the majority of the world. We'd all be better off going back to the days of independant university research funded by government grants like we had in the 40's to 70's. That era had the greatest advancement in health care the country's ever seen.

Once again - conservatives don't really believe in free markets, they believe in rigged markets. They also think privatization is always the right thing to do, even though the privitization of the war effort in Iraq has cost American taxpayers billions of dollars and hundreds of innocent lives as this movie so clearly illustrates.

Public interest groups have pointed out for years that Medicare is more efficient than private insurance and that privatization will result in higher overall costs, rationing and less stability in health care delivery. Of course, the right-wing “free market” ideologues control the mainstream media and the truth never gets through to the average American. More reasons to through the right-wing bums out in the street where they belong!

It's far too logical. It will never work.

Odd, the same story appearing in three national newspapers on the same weekend with three different by-lines.

The real story here is not how the Democrats deal with prescription drug pricing, but how the authors all had the same bright idea at the same time. I wonder if Jane Zhang, Ricardo Alonso-Zaldivar, Lori Montgomery and Christopher Lee might be receiving a little something extra in this weeks mail from some of their friends at big Pharma?

Seriously, was there some kind of unreported press release or press conference?

Kevin Drum opines: There's no reason American taxpayers should be subsidizing healthcare for the rest of the world, after all.

Heh.

Bravo, Kevin !

I'm glad a high-profile person like yourself has finally framed the issue this way in a public way.

Because the U.S. has had its "free-market" ethic, the American consumer has been subsidising every other advanced economy in the world for prescription prices. Further, since the vast bulk of primary research funds has come from Federal grants to educational institutions (which promptly acquire patent rights to medical discoveries), there has been a cascade of perverse incentives that help make the American medical system among the strangest and least efficient in the world.

Joe writes: Private sector prioritizes profit driven research for high cost drugs for the wealthy elderly while doing nothing for the majority of the world.

I hadn't realized it was the responsibility of Big Pharma to do something for 'the majority of the world'. It's their responsibility to make drugs that people will buy and thus satisfy their investors.

If you want to to do something for 'the majority of the world', you can support more foreign aid (yup, that's worked well these past five decades), or private philantrophy, or UN aid (so that European apparatchiks can drive Land Cruisers around in third world cities). Or you could support getting third world countries to help themselves by respecting human rights and the rule of law (and by removing a few odious thugs).

As the WaPo article points out, 1) more people are participating than anticipated 2) costs are lower than expected and 3) more plans are on the market than forseen. As Mr. Reischauer in the WaPo article asks: "At some point you have to ask: what are we looking for here?"

I definitely would like to echo joe's comment. In fact the retort I usually use whenever some fringe lunatic tells me that reducing drug costs would hurt Big Pharma R&D is "who cares?" Big Pharma's R&D is virtually useless when it comes to innovative therapies for important diseases. The vast majority of cutting edge innovation in therapeutics comes from university labs (sponsored by and large by the NIH) and from small biotechs.

As a scientist I've had plenty of friends work in Big Pharma and even they admit that they took those jobs because they wanted an easy 9-to-5 job that paid well, even though the research they do is total bullshit. So excuse me while I don't give a damn about 'hurting their R&D budget'.

There's no reason American taxpayers should be subsidizing healthcare for the rest of the world, after all.

I'm glad you realize that, as it tacitly admits that the rich are not obligated to subsidize the less well-off. By the same logic, I hope the Democratic congress institutes a flat tax. It's the exact same principle, after all.

Osama writes: Further, since the vast bulk of primary research funds has come from Federal grants to educational institutions

Yes and no. Full disclosure: I currently hold NIH research grants, and have been continuously funded these past 20 years. I know a little about these.

You need two kinds of discovery to get new medical advances (e.g., drugs, equipment) to patients -- the first is basic science research, the second is applied research. The NIH (the Federal agency that funds biomedical research) is really, really good at basic research, and really mediocre at applied research. Big Pharma, on the other hand, is really, really good at applied research, and only passably good at basic research.

Read that carefully, and you see a reasonable matching of strengths: NIH-funded investigators (e.g., me and a few thousand others) do the basic work, and Pharma does the applied work to turn basic knowledge into something useful.

You need both to get a new drug to market. We can do all sorts of really cool basic research, but unless someone does the applied research you won't have much that is useful. Pharma is better at that precisely because of the profit motive. Likewise, NIH can take a longer view with its funding initiatives than can a business that has to answer to investors.

You need both. It's right and proper to credit NIH for the funding it provides, and I certainly thank them. But you also need Big Pharma. If you applaud one but denigrate the other, you're missing how medical science advances.

Judging by the initial reception by beneficiaries, Congress and the market alike, the Medicare drug benefit is off to a rocky start. That should come as a surprise to no one for a program that was designed to fail...

For the full story, see:
"Medicare's Prescription for Failure."

Reader: the 'bullshit' science that Pharma does is the necessary science to make drugs work. Someone has to select a good candidate drug from hundreds (thousands) of potential molecules. Someone has to do all the testing, from lab to animal to human. Someone has to figure out the manufactoring process (doesn't do any good to have a cool drug if you can't make it in quantity). Someone has to figure out the safety issues.

That's Pharma. It may be mundane, routine, '9 to 5' in a lot of ways, but it has to get done, and it sure won't get done by the Federal government.

Pharma doesn't do a lot of cool basic science (though they do some; just look in the biomedical journals). They're not geared up for that. But to turn a basic mechanism into a useful drug -- that they do and do pretty well. Disagree if you like, but then it's on you to say how it could be done better.

It's amusing to watch purported free market conservatives try to defend this massive giveaway to big pharma. It's not the world we're subsidizing, it's these companies that, with massive political giving and media buys, control both legislation and publicity. I can't believe drug companies are whining that they can't negotiate a fair price with their biggest customer.

Pharma doesn't do a lot of cool basic science (though they do some; just look in the biomedical journals). They're not geared up for that. But to turn a basic mechanism into a useful drug -- that they do and do pretty well. Disagree if you like, but then it's on you to say how it could be done better.

Perhaps as licensees of the NIH which funded the basic reasearch upon which the pharmaceuticals that reach market are based.

All the hand-wringing about how paying reasonable prices for drugs will starve research neglects the fact that Pharma marketing budgets exceed their R&D budgets three to one. Or, that Pharma has the highest return on investment of any industry in America (except, sometimes, media).

There are in infinite number of ways to structure this system. How about aiming for a set of incentives that coincide more closely with the public good?

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Osama writes: Pharma has the highest return on investment of any industry in America (except, sometimes, media).

Yup, Pharma gets a nice return. Then again, they have longer lead times on their products, and the initial investment is higher. A drug that makes it to market costs $400-800 million and takes 7 to 10 years. Given that a patent lasts 17 years (and you patent a compound very early), you need to get that investment back, plus the time value of that investment.

If you don't, you won't have investors. Wall Street won't buy your paper.

Why would an investor pony up a few hundred million to Big Pharma when they could get 4 to 5% today in T-notes? Answer: Big Pharma offers more. You accept the risk with that, and you get a better return.

That's why Pharma works to get these high profits. Good progressives won't understand this of course, since profit is ucky, but Pharma needs to get investors in the door.

Why should R&D be reduced? If Big Pharma diverts the billions it currently pays for consumer advertising (primarily, TV; and by consumer, I'm not referring to physicians), it should be able to maintain its R&D budget.

As a general matter, I don't support Big Pharma advertising. Sure, it could and is educational, but in the same way lobbyists are merely "educating" lawmakers (I was a researcher for a lobbying firm; there is education aspect to proiding the information, but that is a means to an end)and purveyors of "you name the product" are educating consumers. Let's be honest, consumer advertising allows companies to play fast and loose with the facts(a matter of emphasis?),tailor statistics and use generous dollops of "poetic license." However, though the average consumer is ill-informed, spending his/her money on a trendy pair of jeans is not the end of the world. But companies marketing to an ill-informed consumer on matters of medical treatment,pharmacology and biostatitics? Moreover, unlike the marketing of consumer products that play on people's aspirations or self-image, medical products affect one's health. Pharmacuetical companies even flim flam doctors by selectively with-holding facts in studies, ingratiating themselves with doctors through babelicious sales agents, expense paid, quasi-conferences to tropical (or at least warm) locales in the winter and free samples (which is one of the more perverse aspects of our peverse incentive laden healthcare system, because it offers doctors an oportunity to help there less well-off or plainly indigent patients). Also, unlike full-time medical researchers, doctors have a job: treating patients. I wonder how much time they have to read and analyze drug studies.

Additionaly, what of all the tax-payer funded medical research that ends up in the hands of pharmecuetical companies? Why aren't the savings from passed along to tax-payers? Manufacturing and marketing expenses ate them up? Not likely.

And why is the WP calling price negotiation "price controls." That's objective analysis? The "Post" has bought into Big Pharma's talking points.

Sen. Grassley's point that he doesn't think that seniors want "the government in their medicine cabinets," is ridiculous. Isn't Medicare a GOVERNMENT program. See what I mean by ill-informed? His statement reminds me of one made by former Louisiana senator John Breaux (D)made to illustrate such ignorance. During a point when the federal government as again discussing Medicare reform, he said and old lady approached him in a Lousiana airport (I've forgotten which) and demanded that the stop the federal government take its hands off of Medicare. Apparently, the private(?) Medicare program was subjected to interference by the feds.

Anyway, I think refusal to negotiate prescription drug prices is an abdication of the federal government's fiduciary obligation to the taxpayers.

The federal government is a large purchaser and thus wields substantial market power. However, if the argument against negotiating drup prices is valid, then it should be considered wrong for the feds to negotiate prices for any products it seeks from the marketplace. And how many companies have gone broke selling to the government? Sure, maybe a few have (I haven't any evidence, but I'll concede, up to a point), but is there a shortage of companies that want government business? If not, what does that tell us?

BTW, the Veterans Administration and DoD large are purchasers of prescription drugs--and are allowed to negotiate prices--and I haven't seen pharma compaines going belly up as a result.

Er... higher drug prices in other countries would reduce the US trade deficit, not increase it.

The real problem is that drug prices can only be raised so much in foreign countries before those countries decide "to hell with it, we'll make the stuff on our own, screw your patent." That's the very reason foreign drug prices are lower than domestic ones - the pharma companies don't worry that the US might suddenly torch the patent system, but there's much less of a guarantee that, say, Brazil wouldn't do the same. That's still profit turning into nothing, especially if that country's pharmaceutical companies then start exporting your best products themselves!

So they come to a compromise - foreign governments agree to respect the US patents, and the US pharma companies agree to sell their drugs at a much-reduced price in the foreign market. Of course, the US government could always just bully everyone into paying what we pay, but wouldn't that be nasty and hegemonistic?

Not to say that the idea Kevin raises is inherently bad. Sure, there's a limit to how far the drug companies can raise their prices in foreign markets, but that doesn't mean that they can't raise them at ALL, and it's definitely to the US's advantage that the pharma companies push that as far as they can get away with. It wouldn't really hurt if the US government made a few pointed comments on the issue, either...

There was an article this week about how wheat had lost nutritive value that helped people assimilate needed minerals. Look around and find some competent nutritionists to help make sure diet is not causing much disease ( or conditions ) which stimulate sales of drugs which don't deal with the problem but affect symptoms.
With all the regulations about marketing herbs ( that's plants or "pharma" ) choking off supply of unrefined product so that everything has to be processed ( no guarantees of undesirable effects from that ) I don't see drug companies having to do any competing in a free market.
Nor am I convinced there isn't more money in drugs which are habit forming or solely palliative rather than a cure.
Capitalism does some things really well. Performing acts of public altruism on a regular basis is not something for which I have seen any report at all.

Steve White has graciously pointed out exactly what's wrong with the system. You have the guys doing the applied research (i.e., the easier part), who are basically mooching off of the government's funding of the hard part of research (the basic science part) and making huge profits off of that mooching. Furthermore (as has been pointed out) R&D spending is not even close to amount on advertising - as long as spending on ads is triple spending on R&D (and let's not forget that a lot of R&D spending is also what most people would call ads) I simply put no stock in Big Pharma's complaints about having to cut into R&D funding if drug costs go down.

Let's put it this way: if the drug companies themselves admit that they'd first start cutting R&D spending before cutting advertisement spending, then doesn't that mean that they themselves realise that their R&D is worthless compared to their advertising?

Oh and it's also simply untrue that university labs are 'mediocre' at things like drug delivery mechanisms and other such applied research - Steve White you might want to Google a guy who teaches in my department named "Robert Langer". You can apologise for Big Pharma all you want, but all I've got to say is "Viagra" and I think I win the battle over which group's research is more valuable for actually curing important diseases.

"There's no reason American taxpayers should be subsidizing healthcare for the rest of the world, after all."

That's hitting the nail on the head! Good!

Avatar's post explains why MFP may not work the way its proponent would hope. I do not have the specifics, but about 20 years ago, Canada revised its drug patent law in a manner that many Canadian consumer activists deemed highly favorable to the drug companies (Canada had/has? a large generic drug industry). It would not surprise me that the quid pro quo in that deal was the lower drug prices that Canadian medicare achieves. Perhaps more knowledgeable readers than I can provide more details on the matter.

Kevin-

Not sure why you're able to so easily dismiss the idea of price controls. Price controls have been pretty heartily maligned since the 70s, not without reason. But they do have a place in governance. Minimum wage is a price control (price floor for labor). Patents are a form of price control - monopoly imposed; protected by the government.

For example, it might be that in a free market the profit maximizing function of a drug maker is to produce enough for 1% of the population at a given (high) price, whereas the government can negotiate that 3% of the population receive the drug at a lesser price. In effect, a price control - and yet depending on the numbers, the company may be just as profitable under the price control regime.

Don't write off price controls so easily.

Dear "Reader": Do you have any basis for your seemingly absurd statement that the applied research is "the easy part"? Have you ever been involved in any research project, in any capacity? Is there any reason we should trust your assertion that this research, for which investors are willing to pay billions of dollars, is nonetheless "easy"?

'I'm glad you realize that, as it tacitly admits that the rich are not obligated to subsidize the less well-off. By the same logic, I hope the Democratic congress institutes a flat tax. It's the exact same principle, after all.
--American Hawk

Conversely, the poor should not be obligated to subsidize the wealthy, although they do every day with regressive taxes like Social Security, massive corporate tax loopholes and giveaways and passive income like dividends and capital gains taxed at lower rates than income earned by the sweat of one's brow. The entire conservative mindset is to privatize profits and socialize costs.

Two questions about your beloved "flat tax":

(1) Do you also advocate making Social Security a flat tax? and,
(2) Are you really willing to pay more in taxes, so that a rich guy can pay less? That will be the consequence of instituting a flat tax - Do the math. The vast majority of Americans would end up paying more under a flat tax, for it to be revenue neutral.

Excellent post Kevin! I'll remember those points.

I'm pretty sure Wal-Mart does more than "most favored pricing". Everything I've read has them actively negotiating hard for lower prices from their suppliers. There's both good and bad results from this, but it's not a case of Wal-Mart just asking Widgets, Inc., not to charge Wal-Mart any more than they charge Macy's.

"Steve White" has become a sort of resident troll, patiently explaining to the rest of us how hard Big Pharma works researching new drugs.

I call him a troll, because there are so few new drugs that are actually any improvement.

Big Pharma works tirelessly to develop old drug with a new molecule that makes it possible to take out a new patent and extend their profits. They lobby aggressively to make it hard to use "old" generics. That's what a lot of the "War on Drugs" is about.

The fact is, a lot of Americans would get better medical care if they lived in Mexico. Most of us know what our problems are and which drug works the best. The doctor doesn't have a new miracle cure for us, and, if you're on Medicare, the doctor doesn't even have the old miracle cure for you- you're on your own when it comes to actually getting the drug that works.

If the new Congress can't put a chokechain on Big Pharma, we'll be stuck with co-pays that are too high and fiscal bleeding where the government actually helps with prices that are too high.

[An] approach Democrats could try would be requiring drug makers to give Medicare beneficiaries their lowest price, as companies must for Medicaid, the state-federal health-insurance program for the poor and disabled.

Ha ha ha ha ha!

Drug cos. rip off state Medicaid programs big-time with their "Average Wholesale Price" scam, whereby the "lowest price" they charge Medicaid isn't actually their lowest price, but rather a substantial markup over it --- several hundred percent, in some cases.

Several states have sued/are suing over this scam, with uncertain success thus far.

3 nearly identical simultaneous stories
No detailing of costs
No summary of costs
Lots of figures as percentages

I'd give that story 9.3 out of 10 on the Uniform Bogosity Metric.

If we were talking about the Pentagon purchasing engine parts then we would expect the government to negotiate for the best price. Why do Repubs insist on treating pharmaceuticals differently ?

Is it a free market if one side is unable to try and get the best price ?

Having Medicare D beneficiaries scatter across hundreds of separate insurance providers complicates negotiations. Simplification would mean cutting out the insurance altogether, require the current payments go to Medicare and extend Medicare.

"By the same logic, I hope the Democratic congress institutes a flat tax. It's the exact same principle, after all."
--American Hawk

If a flat tax was instituted, I suspect that conservatives would still be unhappy. Remember the conservative mantra that the rich pay more (or the most) in taxes? The claim is true, but misleading In absolute terms, the rich do pay more in taxes--they make more money, after all. But what is it proportionate to their income? Corporations make the same claim. But just how much do the rich and corporations pay after their accountants and lawyers structure and employ "perfectly legal" tax avoidance (a euphemism of "evasion" no?)schemes to reduce taxable income? Schemes that the average wage slave or even middle class person are not affluent enough to utilize, never mind the fact that they are unable to afford such high-priced surfaces.

The flat tax exposes its conservative proponents as either innumerate or dishonest. Let's use elementary school arithmetic: A flat tax of 10 percent sans any deductions (a "perfect flat tax) would capture $5,000 from a $50,000 earner and $500,000 from a high income earner. Can't the $500K earner complain that the government is taking more money from her? In absolute terms the $500K earner is paying more, but not as a porportion of her income. Why? Becasue the rate (10 percent) is the same.

So in a flat tax world, the rich would still be paying more in taxes (in absolute terms). What will conservatives complain of then? That taxes on lower income earners should be raised so that tax revenue from them matches that of the those in the highest income groups?

Bush used a similar faulty consruction during the 2000 campaign. Surpluses were a result of higher taxes that he would "return" to Americans. But revenue into tax coffers increased because of economic growth. (This despite incrased ta dodging, particularly by corprations.) Not because of federal tax rises. However, our innumerate society, bought that, er, lie, despite having learned fractions and percentages in lower school. That so many people didn't understand that though 5 percent of $10 is 50 cents and 5 percent of $100 is $5, it doesn't mean the proportion of the whole is the different despite the fact that the one sum is greater than the other, is pretty pathetic.

The GOP is the party that gave us the Laffer Curve, which, according to legend, was formulated on the back of a napkin. So what does that tell us?

Which reminds me, in my previous post I didn't memtion that many who oppose the federal government using its market power to negotiate lower drug prices, support privatizing social security. But wouldn't that mean that the government was effectively "nationalizing" the stock market. As the oerseer of the larger program, don't privatization advocates think investors (more now than ever) will demand the government protect their returns and provide all manner of consumer protections not currently instituted or a least strenghten current investor law? What then? More whining from Wall Street and other corporate executives?

I don't think the "Lake Wobegone" effect (all the children are above average)that presently pervades corporate boardrooms and contributes to vulgar amounts of executive compensation, would be aceptable to even a 28-year-old whose 401K has lost substantial value, while hearing reports of corporate shennanigans. Let's not even mention the clever fee structures designed by financial companies. Certainly return and fee information, diclosed in dense, legalistic, opaque language--which usually amounts to telling consumers how the company is f**king you--won't go down well with most owners of private accounts. And who are they going to run to?

"What would Harry and Louise do?"

Harry & Louise passed away three years ago in a murder/suicide pact fueled by desperation at losing their health insurance after a massive layoff at Harry's highly profitable pharma workplace.

"then they'll have to raise prices in other countries. But that's OK. "

- A consequence of raising prices in other countries will be a re-examination in those countries of patent protection for new drugs. This was increased by WTO fiat as a result of lobbying by drug manufacturers and others. Many countries might opt to reduce the length of patents for new drugs should prices go up; that is the real fear of big pharma.

One more point. How do I know corporations aren't paying their fair share? Look at the income reported to investors, versus what is reported to the IRS. A big difference.

The law congress passed to allow corporations to bring home income (obstensibley to invest in job creation in the U.S., but by no means required)without paying taxes (or was the tax rate substantially lowered?) is another example.

The average citizen who opens a bank account in the UK, Japan, Singapore, or wherever, is obligated to report and pay taxes on the interest gained from the deposits. He can't set himself up as a related corporate entity and shield his deposit income from U.S. taxes.

One thing nobody is mentioning is how many seniors and disabled people were "forced" into this horrible drug program because they were told if they did not join, they would be assessed l2% per year more! Meaning, join now or you never will.

Well, that coerced me, but now I find that my premiums triple next year. Uh... thus far the drug plan has cost me money, not helped me out. So if it's oging to cost me 3x what it cost me now, I'm dropping out.

I can't believe I'll be the only one.

Until they can come up with a reasonable drug plan, the very LEAST the Dems can do is remove the odious penalty.

The very BEST would be if they scrap the whole damn plan and start anew. It is so bad, with it's crazy donut hole, being privatized,bad for consumers... it deserves to be trashed.

Al: Third, the liberal Medicare drug control plan would be a violation of privacy. "Limiting choice would be unacceptable to many Medicare beneficiaries, said Sen. Charles E. Grassley (R-Iowa), outgoing chairman of the Senate Finance Committee. "I don't think seniors want the government in their medicine cabinets," he said."

Why, these are called "formularies". Just about everyone I know and certainly everybody on Medicare part D has a limited selection of drugs. Frankly, as a physician, that doesn't bother me in the least. There is a tremendous amount of therapeutic overlap in drugs and despite the distinctions that the various pharmaceutical companies attempt to make, there isn't a lot of difference in a lot of drugs within a class.

Opit: With all the regulations about marketing herbs ( that's plants or "pharma" ) choking off supply of unrefined product so that everything has to be processed ( no guarantees of undesirable effects from that ) I don't see drug companies having to do any competing in a free market.

Actually, there is little or no regulation about marketing herbs.

Serial catowner writes: I call him [me] a troll, because there are so few new drugs that are actually any improvement.

Thanks for the chuckle. In my own 25 years in medicine I've seen a couple dozen new drugs just in my own specialty that are a significant advance over what we had before. Every other specialty can tell you the same thing. But I'm just an academic physician, what would I know about what's an improvement?

The fact is, a lot of Americans would get better medical care if they lived in Mexico.

Well then, move to Mexico and see how it goes for you. I may have this wrong, but as I recall most of the migration is in the other direction. Perhaps their willingness to work as landscapers and chicken-processors makes up for the better health care they're leaving behind?

J Bean, while there is indeed overlap in the formulary, I wouldn't dismiss it so readily.

Different drugs within the same class have different dosing regimens and different safety profiles. Certain patients will tolerate one drug within a class but not another. These differences are useful.

As an example, look at the history of H2-blockers, from Tagamet to the more modern agents within the class. As time went on you went to once a day dosing (from four times a day), fewer drug interactions, better safety profile, etc.

But you can still prescribe Tagamet if you've a reason to.

And there is a demonstrable effect of having more drugs within a class on pricing.

I don't have a problem with formularies most days. But I do use the sometimes small differences in drugs within a class to optimize patient care.

BEAUTIFUL suggestion, Kevin. The price discrimination against Americans is ridiculous. If Congress going Democratic will lead to this common-sense proposal going through, it will have been worth it, just for that.

It will also be great to not have to listen to people from Canuckistan drone on and on about how their lower drugs prices "proves" their health care system works better.

"The only problem is that is (a) the drug companies are telling the truth and (b) Drum's program works, the result will not be lower prices in the U.S., but higher prices in the rest of the world, which will increase both the trade and budget deficits, without making any actual voters happy. So that is kind of a problem for the Democrats." Posted by: y81

No, it won't. First, since the US drugs market is so huge, the MFP clause would likely lead to a combination of lower prices in the US and higher ones abroad (allowing for stable revenues and profits for the pharmaceutical companies). Second, if prices of US-made drugs go up in foreign markets, that means greater export revenues, and lower trade deficits, c.p.

I've made this point before - Just because consumers outside the US pay less than consumers inside, it doesn't mean that drug companies are making less money - It just means the concept of 'insurance' is working better outside the US. case in point: Alzheimer's Medicine Donepezil: In the UK - manufacturer cost to the Health Service: Approx $1500/year - Cost to patient approx $200. In the USA: Cost to patient: approx $900.

- "just repeat complaints from the pharmaceutical industry that Medicare is so big that "negotiation" is tantamount to price controls"

That's actually a fair point. In most negotiations, both parties have the option of walking away from the table. These "negotiations" would be so lopsided (since the whole weight of the Feds would be on one side) that it would go a long way towards price control. And since prices would have to be controlled, oops sorry I meant "negotiated", drug by drug, the process would be extremely costly in itself. An MFP clause solves both problems.

The only thing in your post I don't get is when you say "an MFP clause with appropriate exceptions" - I don't see why there would need to be any exceptions.

"the bulk of the companies and the bulk of the R&D in the pharmaceutical industry are done in America"

Well except for the 50% of the worlds 10 largest pharma companies that aren't american.

Or the 60% of the 50 largest pharma companies that aren't american.

How awesome, though, and what a huge testament to American ingenuity and entrepreneurship, that HALF of all the top 10 pharma companies and almost half of the top 50 are from just one country, representing about 5% of the world population. Truly amazing.

It's a good thing that noone out there is seriously thinking about policy changes that might fuck that up.

"How awesome, though, and what a huge testament to American ingenuity and entrepreneurship, that HALF of all the top 10 pharma companies and almost half of the top 50 are from just one country, representing about 5% of the world population. Truly amazing."

Not really.
The other 5 top companies are from the UK, france and switzerland whose combined population is around 40% that of the USA.

Of the top 50 companies all are from a small group of 10 countries representing around 10% of the worlds population. The US's share is around 45% of that population so the US's share of companies is only marginally above its share of population.

The real overachievers are the swiss with 2 of the top 10 and 4 of the top 50 with a population of less than 8 million people.

"These "negotiations" would be so lopsided (since the whole weight of the Feds would be on one side) that it would go a long way towards price control."

Cecce,
The whole weight of the Feds is on both sides. If the federal government had not issued a patent for the drug, the drug company would not have a monopoly on its production and sale. I suppose the laissez-faire approach is for Uncle Sam to take its hands off the process. No negotiating for drug prices and no issuance of drug patents. Let the generic drug companies slug it out.

Of course the Feds could double or triple its drug R&D budget (as Dean Baker as suggested) since no patent drugs means no Big Pharma research... but I suppose that sounds socialistic, doesn't the free market take care of everything?

I actually work in the pharma industry, and while it certainly does its fair share of evil stuff, the reasons that Steve White gives are quite accurate.

Academics do important work, no doubt. They do a lot of hard slogging in identifying potential targets, or new pathways, etc. But to go from that to a drug is like going from a pile of materials to an airplane.

An academic paper says molecule X has an effect on cell line Y means (almost) nothing. It says nothing about toxicity, oral absorption, metabolism, potency, efficacy, etc. All that stuff is done by pharma. All that stuff is extremely expensive and non-trivial. It's like saying giving birth is easy. You just push it out, right? No big deal.

Also, the R part of R&D consumes far less money than the D part, believe me. I'm in R. No one cares about us.

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"I call him a troll, because there are so few new drugs that are actually any improvement.

Big Pharma works tirelessly to develop old drug with a new molecule that makes it possible to take out a new patent and extend their profits. They lobby aggressively to make it hard to use "old" generics."

A) Having a different side effect profile really is an improvement. Talk to people who can take Cipro but are allergic to Sulfa drugs.

B) What does that last sentence mean? How they make it hard to use generics.

C) The only major drug that sounds like it fits your idea is Claritin/Clarinex. But you can easily get Claritin.

Ally with the Sunnis
by Josef Joffe
Post date 11.27.06 | Issue date 11.27.06
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he war in Iraq is lost--at least the original one, which was to make the place and then all of Arabia safe through democracy.
The "democratic peace"--the idea that only despots make war while democracies are basically pacific--is as old as the republic itself. But not even Woodrow Wilson, the most fervent believer in the idea, went to war against Wilhelmine Germany in 1917 for the sake of democracy. That was the ideological icing on a power-political cake. The Kaiser's U-boats were sinking U.S. ships, and his armies were threatening to devour all of Europe--the pivot of the global balance at the time. Power came first, pedagogy second--never mind the florid rhetoric of transcendence.
Yet Saddam Hussein's Iraq posed no such threat, and this mismeasure of the power realities--the most grievous mistake of statecraft--is the source of all our troubles. In truth, America's hardcore interests were menaced not by Iraq, but by its far more fearsome neighbor to the east, Iran. It is Iran that has sponsored terrorism from Berlin to Beirut, from Hamas to Hezbollah; Iran that has a viable nuclear program; and Iran that boasts the most powerful army east of Israel.

And now, the worst irony: By rushing into Iraq, the United States acted as unwitting handmaiden of Iran. First, by toppling Saddam and dissolving his army, the United States demolished the single-most important barrier to Iranian ambitions. Second, by dismantling the "republic of fear," the United States liberated the Shia majority from Sunni oppression, opening the way for a natural alliance between Qom (Iran) and Najaf (Iraq), the two ecclesiastical centers of Shiism. Third, by threatening Syria, the United States forced both of Iraq's flanking powers--Damascus and Tehran--into a marriage of convenience, which played out nicely in last summer's war in Lebanon. Finally, the United States embroiled itself in an endless insurgency that Iran can manipulate at will.
So the lesson for the future is this: Forget idealpolitik and think realpolitik. If you have to go to war, think security and stability first and democratic transcendence second. The imperative is to contain Iranian ambitions and to prevent a breakup of Iraq that will invite--nay, incite--Syria, Turkey, and Iran to carve up the place. To regain minimal stability, the United States must engineer at least a standoff between the Shia, Sunnis, and Kurds. If you can't beat them, join the weakest to hold off the strongest. This requires a painful change of paradigm: a U.S. deal with the Sunnis, who are the smallest player in this murderous game.
What? With those Baathist thugs? Think again. The Sunnis are fighting for their survival and a chunk of power that will assure them a voice in post-insurgency Iraq. Offer them protection and clout, and so begin to separate the indigenous militias from the foreign jihadists who care not one whit about Iraq but want to humiliate and expel the United States. Think even about reconstituting the Saddamite army--on the simple theory that the "national" force the United States is betting on is a contradiction in terms. Why would Sunnis, Shia, and Kurds--deadly enemies all--add up to a single army just because they wear the same uniforms?
Since the Sunni states in the neighborhood share America's interest in the containment of Iran and its Shia brethren, the United States could count on some useful allies in the background. (No, the Saudis and Jordanians, who have made a living on timidity, won't wade into the fray, but they can help discreetly.)
While masterminding an internal balance, the United States also must take care of external business. The point is not to salvage the Iraqi nation-state--a fiction if ever there was one--but to save Iraq's national space from neighboring predators. The tool here is deterrence, and the method is regrouping. Position U.S. forces athwart the most likely invasion routes from Syria and Iran and so signal to both that they would have to attack the United States if they attack Iraq.
The benefits are obvious. "Tripwire" or deterrent forces require fewer troops than the current order of battle. And, if fight they must, they can do so far from urban settings and play out their natural advantages: mobility, precision, and airpower. Fight them on your terms, not in densely populated Falluja.
What's wrong with this prescription? Alas, the United States, unlike imperial Great Britain, is not cut out for such a game. It demands too much dexterity and cynicism. It requires ditching lofty principles and acting in strictly strategic terms. Support whomever is weakest so as to maintain a balance of power on the inside, but not too much lest your favorite du jour goes on a killing spree against the other two.
Scratch the rhetoric of regime change in Iran and Syria, but draw a line in the sand and threaten them with every B-2 and B-52 in the U.S. arsenal if they cross it. And then, with minimal exposure of your own (reduced) forces, dig in for the long haul. The message to friends and foes must be: We will be here forever because we can't afford to tuck tail--not in the world's most critical strategic arena.
We should expect more from Joffe (1 of 30)
posted by Robert Powell on 2006-11-27 04:37:48 [warn tnr] [respond]
This amounts to a dressed-up version of the Don Imus joke Chait stole for another article in this series-"Bring Back Saddam". The last paragraph here is spot-on, but the rest is full of embarassing mistakes.
-"The war is lost..." Really? The professor should recall, "The success of this occupation can only be judged fifty years from now. If the Germans at that time have a stable, prosperous democracy, then we shall have succeeded."-Eisenhower in Frankfurt, October 1945.
-"Saddam's Iraq posed no such threat" (as Wilhelmine Germany). Actually, the threat was arguably worse. We could manage pretty well without Europe in 1917, at least what was left of it. The Persian Gulf is another story today. Perhaps the professor can recall the "Tanker War", the rape of Kuwait, the shredded UN and US credibility, etc.? Where were the terrorist attacks from Europe in 1917? This is poor analogizing.
-..."by rushing into Iraq" (for sixteen years?) "...the US acted as unwitting handmaiden to Iran." This is oversimplification on the order of "they all look alike". Iraqis are not Iranians, and Saddam is the one who bolstered Iran's regional role by incompetently attacking them and everyone else in the region in such a way as to produce the current mess. In my view, the mullahs in Teheran have a lot more to fear from the influence of a Shiite-dominated democracy in Iraq than the other way round. According to Timothy Garton Ash, many young people in Iran, where they represent 70% of the population, jokingly refer to George Bush and "the thirteenth Imam" for his role in creating the first democratically elected Shiite-dominated government in world history.
Based entirely on the excellent last paragraph, Joffe gets a C-minus. Can do better.
Do not despair. (2 of 30)
posted by oxheadone on 2006-11-27 11:40:23 [warn tnr] [respond]
The US will shortly restore the Baath party leaders to power in Iraq; probably one of the generals we were trying to get to depose Saddam will take over. Just as we let many Nazis return to power in Germany in order to offset the Soviet Union, we need to support the Sunnis to offset the increasing influence of Iran. The Shiites are too divided to run anything and the Iranians are supporting the civil war. This is what the Baker commission is preparing. Billions of dollars and many thousands of broken lives and we are back where we started.
I agree Bob (3 of 30)
posted by blackton on 2006-11-27 12:14:05 [warn tnr] [respond]
I found this issue on the whole disappointing. If the Baker commission in any way resembles TNR's brain trust, we are doomed. The last paragraph was pretty much the only thing worthwhile in the whole piece.
B+ (4 of 30)
posted by jasinvt on 2006-11-27 12:23:05 [warn tnr] [respond]
Joffe's thoughts merit a better grade. An alliance with the Sunni tribes is indeed the type of realpolitik that may help stabilize the situation, and sober up the Iranians and Syrians. However, we need to accept the fact that this is temporary solution, the creation of a balance of terror, that may only good for period long enough for us to get out of Iraq.
As Kurth points out in his opinion, the Sunni sect is more supportive of the jihadists, and can be in both the religious and secular versions of its manifestations as extreme, intolerant and very violent. After all, it is the Saudis, supposedly our allies, who fund the ideology of Islamic fundamentalism.
All of this leads to a basic conclusion: we need to be strategically independent of the region, with an energy policy to match, notwithstanding the influence of Zionism in Congress and the media.
Who knows... (5 of 30)
posted by mpatrickhendri on 2006-11-27 13:22:01 [warn tnr] [respond]
this debate has only served to deepen my cynicism. If the United States continues along the same path, we are almost certain to fail. The introduction of more troops can not be sustained in the long term and it's not likely that military power can achieve "victory" even if we were able to muster another 20,000 soldiers and marines. But can we just withdraw and allow the country to tear itself apart and allow the conflict to spread into neighboring countries? I have not seen anything resembling a good solution in two weeks of debate here at TNR. Perhaps all the good options were on the front end, now we can move on to what Democracies do worst, admitting that we don't always have the answers.
pro-Joffe; divide et impera (6 of 30)
posted by teplukhin on 2006-11-27 14:09:10 [warn tnr] [respond]
As realpolitikers go, Joffe's about as mild and balanced as they come. He's not opposed to democracy promotion or idealism; his point is that, when you undertake a war, realpolitik has to prevail. Whether it's Afghanistan 2001 or Europe 1941 or Iraq 2006, the number one priority is to defeat the enemy and capture his territory-- goals that always require either nasty alliances (with Stalin, the Northern Alliance neanderthals, the sunnis etc) or divide-and-conquer strategies.
The crucial facts in Iraq right now are that we cannot win by ourselves, and that the Iraqi government that cannot defend itself with any effectiveness. Objectively speaking, we are in a weak position and must cut some deals, and fast. So the question is simply which side(s) to take, against which enemies.
Obviously, we need to turn the tables on Iran and Syria and their allies within Iraq, which means of course we need to involve Jordan and the conservative sunni Gulf States as much as we possibly can in central Iraq. Troops from Jordan and the other sunni states would be nice, but in any case we need to edge back from the urban tarbabies and redeploy our troops closer to Iran and Syria. Let the sunni and shi'a fight it out in Baghdad, and let us use our air power and mobility to police the borders with Syria and Iran. We should probably urge splitting off Kurdistan and retaining a US airbase there as well.
Berlin analogy: divide Baghdad, occupy it with foreign arab troops (7 of 30)
posted by teplukhin on 2006-11-27 14:13:56 [warn tnr] [respond]
Mr Joffe,
What do you think of declaring Baghdad an occupied arab city, putting it under an Arab League mandate and dividing it into armed occupation zones, as Berlin was after the war by the Four Powers?
Amerikaneren raus, replaced by Jordanian, Kuwaiti, maybe Egyptian troops as well policing each of the occupied zones. Governed by Arab League mandate. All US troops redeployed to the west and east, far from the capital city, creating a cordon sanitaire of sorts between the center and the provinces close to Syria and Iran.
Any thoughts? danke,
T
Bob (8 of 30)
posted by blackton on 2006-11-27 14:17:10 [warn tnr] [respond]
it seems like it is only you, me, and Channy who give a damn about the Kurds, or who seem to realize how essential we remain in the region, and in Iraq proper in some fashion.
The final disposition of Iraq must be left to the Iraqis themselves, it is not a jigsaw puzzle for us to rearrange as we see fit, however we must not break faith with those elements of Iraqi society who share our vision of peace, prosperity, and democracy.
tep, welcome back (9 of 30)
posted by blackton on 2006-11-27 14:25:45 [warn tnr] [respond]
you have been gone a little while. I actually prefer a redeployment to the north, build and invest that region, our air power could destroy any camps we see and if things get out of control we can intervene. Personally, I would love to see the Kurds get the lions share of our largess. If a school is built there, it will likely stay built.
It is good that you do not envision abandoning Baghdad. Even a fantasy United government is better than none at all. I just hope the Arabs pony up when the time comes, if they don't then we have to remain there, to at least secure the green zone and the airport.
(10 of 30)
posted by teplukhin on 2006-11-27 14:32:10 [warn tnr] [respond]
The Kurds have indeed benefited, hugely, from our efforts. For this we can be proud, and grateful.
The Iraq that is taking shape will likely resemble the Iraq that prevailed in the late 1990s: three zones, one each in the north and south under US protection and a central, hellish zone that is beyond US control. The northern zone that we policed with the NFZ is now essentially a Kurdish independent republic-- an enormous success and a potential bastion of pro-Americanism in the region (perhaps also a forward US air base).
OTOH the southern, shi'a zone needs to be severed from Iranian influence and Baghdad and its environs are a hopelessly chaotic swamp. COntainment is the goal for these regions-- contain Baghdad's chaos, contain Iranian and Syrian efforts to infiltrate and stir up trouble. Both these goals are best accomplished with US air power, incl apaches, dispatched from garrisons along Iraq's eastern and western borders and Kurdistan.
Result: a ringfence around the jihadis in the center and a free, prosperous and pro-US Kurdish republic in the north. Not a bad outcome, that.
(11 of 30)
posted by teplukhin on 2006-11-27 14:35:35 [warn tnr] [respond]
It is good that you do not envision abandoning Baghdad
I do indeed wish to get our troops out of Baghdad, as fast as politically and tactically possible. The Baghdad Iraqis cannot govern themselves. Make it an Arab-governed (but not Iraqi-governed) city. Contain that city's jihadi radioactivity with air power, withdrawn to parts of Iraq that we can indeed police and that can indeed govern themselves-- the south and north.
democratic peace theory (12 of 30)
posted by alamariu on 2006-11-27 15:02:17 [warn tnr] [respond]
DPT does not suggest that democracies do not go to war, as Joffe implies; rather, that they do not go to war against each other. That was a silly mistake for an academic to make.
Tep, I agree (13 of 30)
posted by blackton on 2006-11-27 15:13:28 [warn tnr] [respond]
the thing that is making me a little crazy is that few people can envision any kind of outcome other than absolute catastrope. No long term perspective at all. What is so now will always be so, etc. In fact, what you wrote above is more cogent and reasonable than what I read from most of the columnists. At least my subscription also pays for the privelege of reading many more informed opinions in talkback than in the magazine, so it is not entirely wasted money.
teplukhin, (14 of 30)
posted by mpatrickhendri on 2006-11-27 15:14:58 [warn tnr] [respond]
Only a month ago, you were calling me crazy for suggesting a federalized and ultimately partioned Iraq. Did my argument sway you? I'm guessing no, but just wondering...
specifics? (15 of 30)
posted by clifton on 2006-11-27 15:16:26 [warn tnr] [respond]
I'm not sure if I follow what Joffe means by "ally with the Sunnis". Another article suggests (jokingly?) that we put Saddam back in power. I presume that Joffe, on the other hand is serious. Does he mean that we should threaten the Sunnis with abandoning them to slaughter at the hands of the Shia? This should have been done long ago.
It also seems he wants to offer the Sunnis something positive as well. Their own armed forces? Autonomy? A greater say in the goverance of the country as a whole?
How many of these can we actually offer? How many would be accepted in any form that we would offer them?
It's hard to know whether Joffe has anything meaningful to offer the discussion when he gives no details.
As a matter of fact (16 of 30)
posted by mpatrickhendri on 2006-11-27 15:20:17 [warn tnr] [respond]
Only the