HEALTH REFORM: The Drug Industry’s Sweetheart Deal

I think we established what politicians are; all that’s left is to negotiate the price

Thanks, KT. I want to believe biz / customer interests align (McDonalds does well here), but Big Drug’s name brands and big margins vs. generics pricing prove me wrong again (I want cheaper generics, esp. at $4, the drug cos. don’t). No wonder they fight patent endings, even when some make both brands AND generics. HC “managers” / ins. want to cut costs with generics (my ins. plan pushes them hard). But even if Big Drug tries to “smoke the joint at both ends”, are there other conflicts, such as drugstores vs. HC managers? When CVS bought Caremark and offered one-stop drug service, it sounded great, but last week CVS stock collapsed after Caremark lost contracts – analyst mentioned conflict of stores wanting higher priced drugs for profits vs. HCM wanting lower priced drugs to cut costs? (glad I did NOT own that stock, whew)
http://news.moneycentral.msn.com/ticker/article.aspx?Feed=AP&Date=20091105&ID=10662189&Symbol=CVS
Even if Cohn shows the Big Drugs singing Kumbaya while we suffer, is there more HC infighting than we know? But YOU would know. Thoughts, KT?

There’s so much I don’t know. For instance, I remain interested in finding out what the hospitals got in their deal, but have been unsuccessful in finding out.

…also this (sorry for two posts, had trouble posting two links again last night re: ringtones) – FTC probe of CVS – http://www.pbn.com/detail/45958.html
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…speaking of ringtones, davisb guessed Miles Davis “So What”. Is this it? Would you flat out ask Bill or Hillary? If they don’t know, can you arrange a little experiment? You have tea / muffins with Hillary and ask something that makes her call Bill. Simultaneously, Jay breathlessly runs up to BC in NY or DC to ask questions but wears a recorder / wire to *clearly* capture the full ringtone without others chatting over it. Play it here and we’ll verify. Thanks for your help, KT!

…thanks, and talk about typing simultaneously (but you’re faster). Sorry about that, oops.

“If this bill is implemented,” the report concludes on page 138, “an increase in prices on new drugs can be expected.”

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How can anyone think that this is healthcare reform?
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We are going to tax the rich. Tax those of us with health care insurance plans already. Decrease the benefits of Seniors with Medicare. And, now as we had suspected, Obama’s “deal” with Big Pharma is going to take away our last dime.
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Is this the health care you envisioned Karen? Is this really the health care reforms that you had in mind when you first started to report on these things.
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Costs it seems are going to go through the roof. Just like Obama said about Cap and Trade (Cap and Tax), “yes, your electricity is going to go up significantly.
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Yes there are people out there with crappy insurance. Some with none at all. But, the facts are very clear, if this reform passes, it only makes things more expensive for everyone. This bill solves no problems, it only makes things worse.
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People in this country must stand up and voice their concerns. People need to say “NO” to this health care reform package, and demand that they go back and relook at it all. Demand that Republicans be allowed into the reform discussions and that Democrats in Congress who only want to see a “win” for themselves because they passed this ugly, senseless crap of a bill.
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I am just so disgusted I could spit nails.

KT:

Any interest in finding out why the most (alleged) transparent administration in history who was to have C-Span broadcast the health care discussions has cut more secret deals and negotiated behind closed doors?

There has been more public information on CIA interrogations techniques than the Democratic HC discussions.

I noticed the lack of outrage when the House passed closing the doughnut hole completely at more cost to the PHARMA.

I am waiting to see which lobby is more important to congress, AARP which really likes the House Bill or PHARMA.

Karen the only things I have seen about the hospitals benefit is that they will not have the losses on emergency care and like the insurance companies will have more customers. I think the Public Option negotiating price will help them too.

KT:
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what the hospitals got in their deal
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The hospitals’ pricing are worse (now, after Part D settled down, a lot worse) than PhRMA’s prices. Medicare’s going broke from hospital costs even more than drug costs.
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There has to be something…

Excellent post, KT, thank you.

OT, but it just occurred to me this morning that if we know Hasan had email contact with a radical cleric, we must know it by one of two vectors – either it was swept up in illegal wiretapping or we were monitoring al-Awlaki’s email. If the former is true, it’s ironic that the first time this supposedly necessary illegal program actually monitored a US citizen who was a potential threat it was a flop. If the later, somebody just gave up an important intelligence asset – for what? To tar Muslim servicemen? To make a point?

KT, good luck “probing” the hospitals for secret deals, big cover story potential here. re: your earlier comments about getting info. during visits, if you and your team have to go undercover at hospitals, please don’t be disguised as patients! Instead go as accounting assts. This may be a win-win scenario for you. If you get the info. you have the scoop. If not, you have a Michael Moore-style “Tenet and Me” expose showing how messed up things are by NOT getting the goods.

Caro: Here’s part of the hospital deal, which apparently came as a surprise even to CBO:
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http://www.kaiserhealthnews.org/Daily-Reports/2009/October/01/Hospital-Exempt.aspx

Thank you Karen, do you know if the House bill bypasses the hospital deal too?
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I can only hope that the awful Senate FInance bill gets gutted in conference.

KT:
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Do you suppose there is a chance that people are being hoodwinked over costs in general? That the American people are being confused on purpose regarding cost of health care insurance, or the lack of insurance? Versus, cost of medical procedures, drugs, doctor’s fees, and DMEs?
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While the bill focuses on mainly insurance reforms, the other “costs” as I have defined above, are way out of control, and simply allowed to sky rocket.
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If our Government wants to control health care. How can we allow our Government to neglect what I believe to be the most important “cost” to go unchecked. To allow these costs to grow even more.
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Doesn’t this totally defeat any reform at all? I hope there are Republican leaders who are reading these blogs, at least their staff. I hope that a new strategy for Republicans will be to go after the real costs of health care. This would clearly define the differences between a Democrat plan and a Republican plan.
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If our government truly wants to be fiscally responsible, they will not only look at Medicare fraud and abuse, but at the same time do in-depth analysis of the overall costs of health care, period. Analysis as to why these costs are so high, and continue to rise at over 8% per year.
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I think we already know that Big Pharma, like Big Oil are raking in huge profits. But, what does Obama do? He gives them a sweetheart deal so that they can grow their profits even bigger. Where is the outrage? Where are the liberals on this?

Obama will have to think long and hard about this one, before he drops the public option and issues the insurance industry a blank check.

Rusty: Please see my most recent post. And yes, I do agree that the legislation before Congress, while it is ambitious and commendable on the coverage front, misses the opportunity for cost control. But I do wonder whether the Republicans are the right people to take this up, given the fact that they have demagogued the cost control measures that are in there with stupidity like “death panels.” And dealing with waste, fraud and abuse doesn’t really take you very far, given the enormity of the forces that are driving costs upward. What we need (call me Pollyanna here) is a willingness to deal honestly with what cost containment really involves.

KT – Thanks for this link. I’m curious about the House bill also.

As a minor point, I think we should all stop referring to “the bill,” as there are still 3 bills, yes? I mean, we all know the Finance Committee bill is wretched, although it’s certainly worth delving into the full extent of its wretchedness.

How about “the emerging billish thing”? Worth noting, though, that the overlap among the bills is huge. We really are hearing an argument over provisions. I hear that in every conversation I have with anyone at the White House–even the switchboard operator.

Thanks so much for this reporting, KT, and for responding to commentary.

KT,

I have a question about the timing of benefits in 2013. How much more would it cost to enact the exchanges and the public option from day one? And is this even possible? Couldn’t they use the model of the Federal Employees benefit exchange and Medicare for the public option? i was wondering, because if it is a cost issue I am sure a transactions tax on Wall Street or even the President’s idea of lowering the charitable deductions for rich folks would bring in enough money to provide relief for people immediately.

Has there been any discussion on this? Also, in a related way, I read that Congress is going to be thinking up a jobs bill but folks are cool towards using the transportation bill for stimulus. Do you have any information on this front? This seems to me to be the next big fight in concert with financial reform.

Thanks!

My understanding is that it is less a cost issue than it is a logistics one. it is going to take a while to get these exchanges up and running, and to get people signed up.

Thanks for putting the sunshine on this but forgive me for being a bit skeptical about what industry “is going to get” out of “deals” that seem to fall apart as soon as they exposed to the light of day (thanks again). Once more, the Democrats will lose and lose big if they fail to deliver a good reform measure, as it will be judged by the electorate, “informed” by the mainstream press. Something tells me that any deals had better be able to pass the smell test.

I noticed the lack of outrage when the House passed closing the doughnut hole completely at more cost to the PHARMA.
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I found that rather puzzling. The silence of all the journalists who claim to be covering this non-debate was very instructive too.
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I understand that the hole was a big issue for seniors but how can that level of expenditure by Medicare be justified without some kind of direct phamaceutical cost cutting.
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It’s bad enough that Congress is too spineless to let Medicare negiotiate for drugs but I find it inexplicable that they won’t even consider any other form of cost control for phamaceuticals.
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Why don’t they ban direct to consumer marketing of prescription drugs? That’s a perfect example of patients being driven to ask for more expensive options with little or no proven advantages. And the co-pay rebate programs subvert attempts by pharmacy management programs to inject just a bit of consumer price sensitivy into the mix.
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Prohibiting those activities would save Medicare billions — much more than demonstration programs that never get adopted.

I have a question about Phrma’s stance on the house healthcare bill. They are clearly opposing it for several reasons, including price negotiations on drugs, the potential for job loss and rebates on prescribed drugs. I am trying to understand the impact this legislation will have on the pharmaceutical industry-can someone offer some more reasons why Phrma opposes the house bill and what effect this house bill will have on the drug industry?