As Power Shifts in Washington…

December 5, 2006

In the summer of 2002, I worked in DC for the Pharmaceutical Researchers and Manufacturers of America (PHRMA), which is an umbrella organization that represents the largest pharmaceutical companies.  It was the height of Republican power and PHRMA lobbyists were at the forefront of influencing the policy debate.   One of the crowning achievements of the Bush’s domestic policy was the Medicare prescription drug benefit.  Passed in 2003 at an initial cost of $534 billion over ten years, it is now projected to cost the government $1.2 trillion.   To put that in perspective, Americans have now spent more than $340 billion for the war in Iraq .  As physicians, we know it as Medicare Part D and it is a government run program that provides seniors with prescription drugs for reduced prices.  A major criticism of the bill was that the government was not allowed to negotiate lower drug prices like other buyers who buy drugs in bulk.  For instance, insurance companies negotiate lower prices with pharmaceutical companies. One government agency that does negotiate like this is the VA.  As a bulk buyer, the government would have the potential to bring down the cost of prescription drugs for the benefit of seniors.  PHRMA argues that having the government act as a single buyer would amount to price controls as the government would essentially dictate the price of prescription drugs, which would then be used by insurance companies to negotiate similar prices.  The Democrats will introduce a bill in the coming months that would allow the government to negotiate lower prices.  We’ll be following the progress of this bill at Clinical Correlations as it goes through Congress.  If you ever wonder how change occurs, following this bill would be a good place to start.  This article in the New York Times outlines the debate…

Khandwalla, R, As Power Shifts in Washington. Clinical Correlations Vol 3 #3  Dec 4, 2006

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