Use Medicare’s Muscle to Lower Drug Prices – The New York Times

The New York Times and others are calling for action on high drug prices and rightly so. However, drug prices and total prescription drug spending is a complicated issue that involves not only Medicare, but an entire system including development, approval, marketing and yes, both physician and patient demands and expectations.

It is a big mistake to focus on Medicare (or just drug companies) under the belief allowing Medicare to negotiate drug prices will solve the problem and not recognize the likely consequences for the rest of the population.

To fix the problem requires a look at the entire system and then telling Americans the truth about what it will take and the consequences of lower prices.

So far politicians have taken the low, populist route failing to even mention the role of patients in the system.

Medicaid has ways to get big rebates from drug manufacturers; Medicare should be given similar powers.

Source: Use Medicare’s Muscle to Lower Drug Prices – The New York Times

More on the issue HERE

The major reason for the disparity in pricing is that the United States lacks any sort of central or universal healthcare system or agency that regulates across the board cost. In contrast, negotiations of drug prices between governments and pharmaceutical companies are routine in Canada, most European nations, and most countries in the Middle East and Far East. They have centralized authorities to negotiate more favorable prices with manufacturers, and some also have drug formularies and advisory boards that put restrictions on the use of new and expensive medications.

“In the US, we are covered under a fragmented system, where there really aren’t enough numbers to negotiate effectively,” said Leigh Purvis, director of health research at the Public Policy Institute at AARP (formerly known as the American Association for Retired Persons), a large membership organization for people 50 years and older. “We have different health insurers and they don’t represent enough people to actively and successfully negotiate prices in the same way that other countries do.”

“Countries like the UK and Germany are also willing to take a much harder line on the drugs and compare them with what is already on the market,” she said. “In the US, once it’s approved, that’s pretty much it…”

“The US is different from other countries because they negotiate drug prices and we don’t,” said Dr Lichtenfeld. “But the rest of the world also makes tradeoffs.

Making tradeoffs means that even though drug prices are lower in other countries, some drugs will simply not be paid for by national healthcare systems. Thus, they will be unavailable to patients except those who choose to pay out-of-pocket.   SOURCE:

And then we have advertising:

Today, [this was 2009] drug companies spend $4 billion a year on ads to consumers. In 1997, the FDA rules governing pharmaceutical advertising changed, and now companies can name both the drug and what it’s for, while only naming the most significant potential side effects. Then, the number of ads really exploded. The Nielsen Co. estimates that there’s an average of 80 drug ads every hour of every day on American television. And those ads clearly produce results:

“Something like a third of consumers who’ve seen a drug ad have talked to their doctor about it,” says Julie Donohue, a professor of public health at the University of Pittsburgh who is considered a leading expert on this subject.

“About two-thirds of those have asked for a prescription. And the majority of people who ask for a prescription have that request honored.”

Whether the increase in the number of prescription drugs taken is good or bad for patient health is an open question. There’s evidence on both sides. What’s not up for debate is this: By taking their case to patients instead of doctors, drug companies increased the amount of money we spend on medicine in America.


To add more complications:

Hillary Clin­ton is proposing new rules that would pres­sure prescription drug com­pa­nies to spend a set por­tion of their revenue on re­search and devel­op­ment, one of sev­eral ideas aimed at controlling the ris­ing cost of phar­maceu­ti­cals.

Her plan, to be laid out in Iowa on Tues­day, also would at­tempt to dis­suade drug com­pa­nies from spend­ing large sums on con­sumer advertis­ing by bar­ring that from count­ing as a tax-de­ductible business ex­pense. WSJ 9-22-15


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