Posted on 01/26/2016 9:18:54 AM PST by SeekAndFind
Ask your doctor about....blah, blah, blah................
Sound familiar? How many millions, if not billions, are spent every year on television, internet, magazine, and newspaper advertising by Big Pharma? Is all of this necessary? is it beneficial?
We are paying overstuffed prices because Big Pharma has to make Big Bucks and we have no say in the matter? Just cough up what is demanded and shut your trap about it! That’s what our legislators are telling us. Makes you wonder what other big items are not negotiated by the government. After all, it’s just the tax payers money.
When I was in business I as any other business person negotiated almost everything. Why are our medicines off limits? Doesn’t make sense to me.
Time to run our government more like a business instead of just like candyland for the elected hierarchy.
Come the summer I can see the slogan being: Trump - he will build a wall, cause ISIS to fall and provide health care to all.
So the supposition is that drug companies sell drugs to consumers (or governments) around the world at a loss, and US taxpayers provide the missing profit component.
Why?
A very simple question - why would any drug company go out and distribute in other countries at a loss? Generosity? If that was really the case, wouldn't it be far more efficient for them to create a charity to handle these donations and take advantage of US tax code deductions for those contributions? I mean, if you're going to be losing money anyway, why not actually benefit from it slightly.
Does that make the slightest bit of sense?
No? That's because it is profitable to sell in other countries for a dramatically lower price. Oh, but US consumers are paying a higher price as they benefit from quicker access to drugs that are developed from the research that is paid with the higher profits, right?
No, due to the extraordinary FDA drug approval process, you're far more likely to have access to newer drugs in emerging economies.
And that is where we find the germ of the answer: Drugs are more expensive in the US as companies spend more to get them approved, more to advertise them, more to settle lawsuits. You've got to pay for the army of pharmaceutical drug pushers providing free samples and information to doctors across the US. You've got to pay for all those television, magazine and other ads (and sponsorships.) You've got to pay for the industry created discount clubs. You've got to pay for the absolute unlimited ability of a court to take every last penny from a company without legislative oversight.
Is there room to reduce these prices dramatically? Sure, just look at the drug prices in Canada. The stockholder revolts that happen from a CEO going before the annual meeting and detailing the amount of money lost in their charity work in Canada by selling drugs at a loss...don't happen, as they don't sell at a loss.
There is much a president can do to fix this problem, quite a bit of it involves providing leadership to push for legislation in tort reform, limiting the power of the courts to confiscate money wholesale, and in return, secure company agreements to limit advertising expenses.
As to whether the government can leverage the power of Medicaid/Medicare subscribers into forcing lower drug prices: Medicare and Medicaid officials are appointed bureaucrats dependent on their sponsor, elected, official for their job. That official receives, on average, one lobbying visit a week from a pharmaceutical firm, and that's if there isn't a bill before Congress.
Asking Congress to use Medicare to leverage drug companies into lower prices is like asking the hens to seduce the foxes.
Oh, and it's also not Constitutional or very capitalistic.
Just have a panel of experts (specialist doctors, chemists) set proper prices, subject to court appeal, and levy a 100% income tax on the excess pricing.
Alternately, COST+BONUS+CONSUMER VALUE PRICING could be used.
The chemists on the panel would determine a manufacturing cost estimate, to be paid by Medicare.
The doctors on the panel would determine government-paid bonus amounts from 20% (only drug/bad side effects ; one of several good quality drugs of its type), 50% (only drug/minimal adverse side effects), also to be paid by Medicare.
Consumers would then top-up the Medicare amount by paying a manufacturer-set monthly percentage of their annual income of up to 1% (doubled for cancer drugs and antibiotics, which are normally only taken for short periods of time). If the consumer doesn’t think the drug is worth the percentage of income asked, then the consumer would not make the purchase.
If the manufacturer doesn’t care for this system, Medicare wouldn’t cover the manufacturer’s drug and American consumer of the out-of-system drug would have to pay the manufacturer’s asking price in the consumer’s country of purchase - pure market pricing.
Better yet, how about we hang anyone caught committing Medicare/Medicaid fraud?
Yea, I like that idea much better.
First of all the obvious: it's tremendously regulated, there are many effective monopolies (the number of doctors, the small number of pharmaceutical companies, etc.), and there is ALREADY tremendous rationing going on in terms of what insurance companies will pay for.
Second, demand for healthcare is and always will be inelastic: if I break a leg, it's not as though I'm going to postpone treatment so I can buy a TV. I have friend at MD Anderson getting cancer treatment-- he's already liquidated a lot of his assets at the worst time to make sure he can pay any additional costs for his treatment, including the costs of living in Houston.
Third, our patchwork quilt of insurance laws across 50 states plus Obamacare AND our lunatic malpractice liability laws are simply insane and create gross administrative and financial inefficiencies in every sector of the healthcare market.
My wife and I lived once in Germany in the mid-nineties-- comprehensive health insurance at the time (including dental, with deductibles like here, etc.) was $60 a month for both of us. Having been self-employed in the US at the time, more or less the same coverage was $600 per month.
What's the difference? Germany has a national insurance system (not single payer): every few years the government sits down with the healthecare industry, insurers, unions, and negotiates reimbursement rates and plan coverage. There's a great gnashing of teeth every time this is done, but everyone pays in: employers, employees and the gov picks up the tab for the unemployed, those in the public retirement system, etc. And there are, in effect, no malpractice lawsuits: a doctor cannot be sued for malpractice unless there is a finding of malpractice by a medical review board.
It is very fair, very efficient and very cost-effective: the exact opposite of what we have. Imposing such a plan here would violate a lot of "conservative" principles, but it would be highly effective. In fact, I would recommend hiring the Germans to administer it, since they already know what they're doing.
You are right. trump is a populist. I’ve been saying for years that the GOP should have become more of a populist/nationalist party in the 90s which means: lower taxes on the middle class. Less easy access to welfare. Low legal immigration. fair trade, not free trade. The GOP wold have had a ride like the dems did from the 1930s until Reagan.
Exactly. We need someone to go to DC and scourge the money changers out of the temple.
Medicare/Medicaid government fixed payment schedules have destroyed the free market medical system driving up prices across the board. They should have to pay what private insurance and individuals have to pay. Competition! But I don’t know if American big business knows what this is anymore considering the centralized government/business planned economy which is failing.
One thing that upsets me is my insurance EOB (explanation of benefits) that you get in the mail when you go through insurance company.
They read: Charges $2000 Negotiated Discount $1900 We paid $100.
Most of the time it’s not that huge a difference but I did have one with almost that much! And I think “How about I go to the doctor and say, ya know, you’re charging too much for that procedure, I’m only going to $200 - not the $800 you billed”. How would that work for the rest of us? The whole insurance system is screwy.
“But you’re really going to like it. It will be fantastic”
Good. These drug and health care companies helped push obamacare. Government subsidies are going to pay premiums. Disaster.
Exactly! The solution to the problems created by big government is to make government even bigger and more influential. Markets, where hundreds of millions of people make billions of decisions based on what’s in their best interest, don’t work. Only bureaucrats in a centralized government can make healthcare, or anything else for that matter, work.
In the case of multiple consumer value priced drugs, the manufacturer of each drug could offer a discount of say .25% of the other drug percentages, with say its own minimum percentage of say .6%.
A consumer taking three 1% consumer value drugs with .25%, .2% and .1 manufacturer multi-drug discounts would pay .6% (the minimum for the one with a minimum) , .6% and .8% (2%) of his annual income each month for the three consumer value-priced drugs, or 24% of his annual gross income.
I find it incredible that people are actually calling for less competition from foreign drug companies. Putting trade restrictions of foreign products. This is absurd.
Right on!
It is my understanding that the VA system is more government set than haggled over.
http://www.heritage.org/research/reports/2007/04/the-va-drug-pricing-model-what-senators-should-know
“And there is no better institution than government to determine what the reasonable price is or what constitutes a fair profit.”
Since long before I was born, electricity rates have been set under law.
The Medicare Part D plans already negotiate prices the best they can.
To expect $300 billion in savings is unrealistic.
What might be done is to require Medicare Part D plans negotiate jointly with a minimum market power of at least 20% (going to at least 30% after 2019) of the Part D market or suffer a financial penalty.
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