How Not to Give the People What they Want

Honestly, the baloney thrown around by Mike Leavitt in his WaPo op-ed this morning is so dense, it would take a Medicare Part D expert to cut through it all.  I'm no expert but I know a lot about Part D and even I had to call up the Medicare Rights Center and ask for some guidance.  The problem is that not only is Leavitt running around obsfucating the issue, former Labor Secretary Robert Reich is also getting some play with his critcism of the Democrats' proposed fix to the most transparent industry sop in recent history.   What's funny and confusing is that their key points are diametrically opposed leaving us to figure out who's more full of bullshit.  In my opinion, that award goes to Mike Leavitt.  Congratulations, sir!

Reich first.  On NPR's Marketplace yesterday, Reich declared that the Dems' Part D reform doesn't have any teeth and so won't result in lower prices:

House Democrats are pushing a bill to require Medicare to negotiate drug prices, but in what appears to be a bow to the political clout of Big Pharma, the bill does not authorize Medicare to drop from its approved list drugs on which manufacturers fail to offer good deals.

That's like Wal-Mart telling its suppliers "We're going to use our bargaining clout to get the lowest prices for our customers, but regardless of what price you offer we'll still carry your product in our stores." What kind of incentive is that?

He's right but what he's leaving out is that the federal government has other ways to pressure drug companies to lower prices.  In the case of drugs that have several nearly identical competitors - for instance, cholesterol drugs - drug companies would cave to the government's buying power and compete for lower prices.  The free market at work.   In the case of drugs that have no direct competition, if the company refuses to negotiate, the government could simply override the patent, which is obviously a different story and considerably less free-markety.  In 2004, something similar to that happened during the Anthrax scare with Cipro.  The very threat of overriding the patent got Bayer to lower their price.   But it's not only the government that can play tough and has been forced to in the face of Big Pharma price gouging.  When doctors in Boston saw the price of an AIDS drug spiral, they initiated a boycott of the company responsible for the gouging. 

No matter what,  the Democrats, in deference to the free market ideal or to Big Pharma (hard to say which), chose not to go down that road at all and wrote the bill as Reich describes, which admittedly lessens its bite.

Enter the hysterical Mike Levitt, who wrote in defense of staying the Part D course in an op-ed in today's pro-war WaPo:

Despite the success of the benefit, some people believe government can do a better job of lowering prices than a competitive marketplace. Legislation under consideration would require the secretary of health and human services to negotiate and set the prices of drugs. In effect, one government official would set more than 4,400 prices for different drugs, making decisions that would be better made by millions of individual consumers.

There is also the danger that government price setting would limit drug choices. Medicare provides access to the broadest array of prescription drugs, including the newest drugs. But price negotiation inevitably results in the withholding of access to some drugs to get manufacturers to lower prices.

First, negotiating for lower prices is not "setting prices" no matter how much the opponents of this bill scream that it is.   As for the danger that this bill would limit drug choices, it simply doesn't exist - per Reich and the bill itself:

(A) IN GENERAL — Nothing in Paragraph (1) shall be construed to authorize the Secretary to establish or require a particular formulary.

(B) CONSTRUCTION —Subparagraph (A) shall not be construed as affecting the Secretary’s authority to ensure appropriate and adequate access to covered part D drugs under prescription drug plans and under MA–PD plans, including compliance of such plans with formulary requirements under section 1860D– 4(b)(3).

And let's not forget that under the current system, Leavitt's great fear that seniors won't have access to medication is already a reality since plans are allowed not to carry any drugs they decide are not cost effective and are even allowed to drop coverage of a med in the middle of a plan's term without offering the senior affected any recourse.  That's why we're getting the horror stories about showing up to fill a prescription only to find that the Drug X that was covered last month is no longer covered and that the patient now needs hundreds of dollars to take their prescription home instead of what they budgeted for. 

The Medicare Negotiation Act is not perfect.  Let's be clear: it would take a complete overhaul - probabaly a trashing - of the current Medicare Part D to get a drug benefit that is what our seniors (and all Americans) deserve.  But for right now, in this ridiculous climate that allows people to characterize price negotiation as "price setting," it is a step in the right direction and we need to let our members of Congress know that we insist that they take it. 

As for the rest of the scare tactics and half-truths used by Leavitt, it's not as if his credibility on this issue is anything to be proud of.   I hope someone in authority takes the time to respond to his op-ed today.   The forces opposed to a Medicare drug benefit that works for more than the insurance industry and Big Pharma shouldn't be able to get away with nonsense like that. 

Comments

[mick arran]

Great summary. I suspected Leavitt was full of shit (he usually is) but I didn't have the time to chase it down.

Reich has a point, tho. The Dems may have been afraid of lopping off drugs seniors need but it also just happens to be a sop to Big Pharma. Funny how that works out.

The other thing no one has mentioned is that the same company may make several drugs that do the same thing. They don't all need to be on the list.

[Gort]

Medicare part D is the most screwed up program I've ever had to deal with. There are just too many moving parts. Medicare Parts A & B are single payer systems and Part D should be as well.