The day after the election, drug company stocks took a dive. Democrats were taking over, and the Candy Land that Republicans had built for their pharmaceutical friends would soon be closing its sticky gates. No more Gum Drop Mountain protecting drug makers from cheaper generics. No more Candy Cane Forest barring the government from negotiating Medicare drug prices.
Candy Land is often a child’s first board game, because the players don’t have to know how to count. Congress and the public were similarly clueless about numbers, which is how the Republican leadership succeeded in serving wildly inaccurate calculations of what their policies would cost patients, employers and, above all, the taxpayers.
Reigning over this sweet world of government-guaranteed drug profits is Billy Tauzin as King Kandy. Tauzin was the Republican rep from Louisiana who sold the taxpayers down the river in the 2003 Medicare drug bill – then immediately took a job with a drug company trade group for an estimated $2 million a year.
Candy Land has been largely a Republican club. In the recent election cycle, drug-company political action committees gave Republicans $5.4 million, or 72 percent of their total campaign contributions. Now, in a desperate effort to keep the honey flowing, Candy Land is offering memberships to Democrats.
Before the election, only three of the 12 lobbyists at PhRMA, Tauzin’s trade group, were Democrats. Now six of them will be. Drug companies, meanwhile, are busily hiring lobbyists with strong Democratic ties.
Whether this will soften up the new Democratic leaders in Congress remains doubtful. Many Democrats had put drug prices at the center of their campaigns. And a diverse coalition of business, labor and patients demands action.
For example, employers groaning under rising health-care costs want increased access to generics. That will mean ending the game-playing over drug patents. Under law, drug companies have 17 years to sell a new product without competition. When that patent protection expires, other companies may market generic versions of the brand-name drug. The industry had been exploiting several loopholes to extend the patent period. Democrats will not be as lenient about patent-stretching as Republicans have been.
The “first 100 hours” agenda of new House Speaker Nancy Pelosi includes legislation to let the federal government negotiate Medicare drug prices. Tauzin had inserted a ban on such activity in the Medicare drug law.
How will the drug lobby fight off reform? “I’m putting my trust in beneficiaries,” Tauzin explained.
That’s King Kandy’s way of saying that the industry will make an end run around the taxpayers. It will unleash an ad campaign to convince elderly Americans that negotiated prices may result in denying them certain brand-name drugs. Health and Human Services Secretary Michael Leavitt offered a sneak preview of the propaganda to come. “Rather than having individuals making choices about which drug they would like to have access to,” he warned, “you have the government making those choices.”
Of course, that’s nonsense. Patients would have total access to any overpriced drug they desire. They would just have to buy it themselves. Medicare would still offer to pay for reasonably priced substitutes.
The federal government is already quite experienced at talking price on health care. The Department of Veterans Affairs has long negotiated bulk purchases of drugs. And Medicare routinely sets fees paid doctors and hospitals.
The Medicare drug benefit was sold to Congress as a program that would cost a mere $400 billion over 10 years. The latest estimate puts the price tag at $1.2 trillion. You see, no one has to count in Candy Land. That’s why the grownups have to shut the place down.
Froma Harrop is a Providence Journal columnist. Contact her by writing to fharrop@projo.com.
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