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You are here: Home / Politics / Republican Stupidity / The Prescription Drug Plan

The Prescription Drug Plan

by John Cole|  May 6, 20056:25 pm| 15 Comments

This post is in: Republican Stupidity

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I’ve railed against this before, and I hate being on the same side ofan issue as Paul Krugman, but he is right:

There was a brief flurry of outrage when Congress passed the 2003 Medicare bill. The news media reported on the scandalous vote in the House of Representatives: Republican leaders violated parliamentary procedure, twisted arms and perhaps engaged in bribery to persuade skeptical lawmakers to change their votes in a session literally held in the dead of night.

Later, the media reported on another scandal: it turned out that the administration had deceived Congress about the bill’s likely cost.

But the real scandal is what’s in the legislation. It’s an object lesson in how special interests hold America’s health care system hostage.

The new Medicare law subsidizes private health plans, which have repeatedly failed to deliver promised cost savings. It creates an unnecessary layer of middlemen by requiring that the drug benefit be administered by private insurers. The biggest giveaway is to Big Pharma: the law specifically prohibits Medicare from using its purchasing power to negotiate lower drug prices.

Outside the United States, almost every government bargains over drug prices. And it works: the Congressional Budget Office says that foreign drug prices are 35 to 55 percent below U.S. levels. Even within the United States, Veterans Affairs is able to negotiate discounts of 50 percent or more, far larger than those the Medicare actuary expects the elderly to receive under the new plan.

After the drug bill’s passage, Jacob Hacker and Theodore Marmor of Yale University estimated that a sensible bill could have delivered twice as much coverage for the same price.

A shameless giveaway to big business is all this bill was, much like the Bankruptcy Bill.

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15Comments

  1. 1.

    Kimmitt

    May 6, 2005 at 8:52 pm

    I hate being on the same side ofan issue as Paul Krugman,

    Um, now that you’ve come to the conclusion that there really is a scary theocratic wing of the Republican Party, why do you feel a need to randomly bash Krugman? You shouldn’t feel bad being on the same side as a world-renowned economist who was, before he started questioning the conservative orthodoxy, known for his pragmatic centrism.

  2. 2.

    John Cole

    May 6, 2005 at 8:55 pm

    You could explain to me how agreeing completely with Paul Krugman and linking to his opinion piece is a ‘random bashing.’ I am bashing him much the same way Christians are ‘persecuted’ in this country.

  3. 3.

    ppgaz

    May 6, 2005 at 8:59 pm

    In fairness to John, I think he really might have meant that it pains him to be touting a NYT columnist.

    But you know, the Times has a rather eclectic assortment of writers. I mean, for years they gave space to the pathological liar, Safire. And they host the terminally bizarro Brooks, who never met an inapt comparison he didn’t like. Two guys who would gladly throw a drowning man both ends of the same rope.

  4. 4.

    Fledermaus

    May 6, 2005 at 9:09 pm

    Let’s not forget that the Administration also supressed actuary’s reports about the true costs of the plan and promised payouts to a GOP holdout’s son’s political campaign.

    It really makes me wonder whether Bush and company can honestly advocate for any legislation.

  5. 5.

    Digital Amish

    May 6, 2005 at 9:40 pm

    Why the outrage over this? It’s really no surprise. Could you point me to any planks in Bushes domestic agenda that actually benefit working Americans? Anything that moves the fulcrum of power away from the corpratocracy and toward the citizen?

  6. 6.

    Kimmitt

    May 7, 2005 at 1:15 am

    I guess my point was that there’s no reason to feel bad about being on the same side as Professor Krugman, so I don’t really understand why you’re saying that you are.

  7. 7.

    TJ Jackson

    May 7, 2005 at 1:36 am

    Being on the same side of an argument as Krugman is like being on the same side of an argument with Mugabe. If the GOP healthcare plan is bad it ought to be easyfor the Dems to offer a superior, cost efficient plan that bears scrutiny. Hmmm, wonder where it is?

  8. 8.

    JKC

    May 7, 2005 at 9:07 am

    Don’t have to look far, TJ. Look at the VA system: high quality care (per the New England Journal of Medicine), low drug prices, achieved through negotiation with drug companies, computerized medical records.

  9. 9.

    Christie S.

    May 7, 2005 at 11:37 am

    Hey T.J., another tradition in our halls of power is that the majority party sets the priorities and then those get sent to committee, headed by the majority party.

    It’s worked this way for a very long time. One of the “unwritten” rules of both houses.

    I do believe that reversing that particular ‘rule’ is one of the things that Reid et.al. is planning should the majority party actually kill the filibuster. Getting rid of this particular tradition would remove the self-imposed restrictions on the minority party…whichever party is in the minority at the time.

  10. 10.

    Kimmitt

    May 7, 2005 at 2:54 pm

    TJ’s attitude is what I was referring to and what you appeared to be referencing.

  11. 11.

    Christie S.

    May 7, 2005 at 8:05 pm

    Kimmitt, if your last comment was to me, I was obliquely referencing TJ’s comment on basically ‘put up or shut up’.

  12. 12.

    me

    May 8, 2005 at 1:04 am

    So, if TJ didn’t have to look to far, why aren’t the Dems proposing such a thing? Why didn’t they when they had the opportunity under 8 years of Clinton?

    Because it’s a tough issue, kiddies. And, if this plan’s costs have spiraled out of control, dare we imagine the cost of a Democrat backed plan?

  13. 13.

    ed in texas

    May 8, 2005 at 6:12 am

    Before you ask if Medicare should negotiate down prices of medications, bear in mind that current (and ongoing) problems with public health vaccines (read flu) were caused by just this kind of government single-source contracting. Economy-of-scale does not always lead to reduced prices. In an R&D intensive business, it will however lead to non-competition (If one company’s got the contact, why would anybody else bother to make it?) and a severely reduced R&D program for improvement (why bother). Basically, if you move to a single-source purchaser, the fiscal pressure pushes you towards a single-source supply.

  14. 14.

    Kimmitt

    May 8, 2005 at 11:52 am

    Christie — apologies for the lack of clarity; I was referring to our congenial host.

    current (and ongoing) problems with public health vaccines (read flu) were caused by just this kind of government single-source contracting.

    Hm, sounds like the government needs to recognize the risks inherent in vaccine creation and do something vaguely intelligent to spread them around. Maybe in ’09.

  15. 15.

    match stick

    June 1, 2005 at 1:11 pm

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