Big Pharma makes out big time from Part D Posted by Liz at 11/06/06 08:11 AM

The NY Times reports that while some companies have raised the prices on their medications double the inflation rate, 3-7 million seniors are expected to hit the "donut hole," a gap in drug coverage where they will have to spend about $3,000 out of their own pockets to climb out of. According to The Times:

But Wall Street analysts say they have little doubt that the benefit program, called Part D, has helped several big drug makers report record profits and exceed earnings forecasts made earlier in the year.

Companies have raised prices on many top-selling medicines by 6 percent or more this year, double the overall inflation rate. In some cases, drug makers have received price increases of as much as 20 percent for medicines that the government was already buying for people covered under the Medicaid program for the indigent. Medicare also pays more than the Veterans Administration, which runs its own benefit program.

“Part D was a good thing for almost everybody,” said Les Funtleyder, an industry analyst at Miller Tabak, a research firm in New York.

Drug makers have tried to play down their gains from the program because they do not want to be seen as profiteering in an election year, Mr. Funtleyder said. “You don’t want to draw too much attention to how good it’s been.”

Republicans say that the benefit program is working, and costs less than was expected. The Democrats have said that if they take control of Congress, they will introduce legislation that will allow Medicare to negotiate with drug companies for lower drug prices.

Right now, Medicare is specifically prohibited from doing this. Currently, the Veteran's Administration does it for veterans.

The Minority Staff of the Committee on Government reform recently estimated that Americans could save $61 billion over the next decade if Medicare negotiated lower prices from the industry.

Regardless of what happens with the election tomorrow, issues with Medicare Part D are not going to go away any time soon.

comments (11)

1 Posted by Janet at 11/08/06 06:49 AM

I've worked my whole life, am widowed, 66 yrs old, retired and have just hit the "donut hole". Hooray!! The big Pharms keep getting richer and the "average joe" keeps getting poorer. I have some savings, however, I don't feel as though I should have to use a good portion of these savings for drugs that are totally "overpriced". I've been listening to the election results and hope the democrats do as they say - lower the cost of drugs for all of us. The pharmatical companies have had the ball for too long and have been allowed to charge outrageous prices for drugs (this year alone drugs raised by 6%. It's time for a turnaround, so the average American gets a break! Plus the fact that I believe in the "health concept" of vitamins/ minerals etc to manage our health versus doctors immediately wanting to put you on the most expensive drugs on the market. Many doctors overprescribe medicine and don't want to hear that you're taking any vit/min/health variety other then their medication. Another thing that has worried me is the threat of our government pulling all "health" products off the shelves stating they have no value. Europe already has this law, and a person must get a prescription from a medical doctor in order to take any vitamin/mineral,etc. Where's our freedom?

2 Posted by Michael Robbins at 11/08/06 09:04 PM

The simple truth about the whole Medicare Part D lie is that it was never intended to benefit anyone other than the stockholders of and executives (their compensation packages) of the pharmaceuticals.

The bill was written by PhRMA lobbyists and that's just a fact.

Like every other move by the Bush administration and the power-mad Republicans made was to benefit them and the most wealthy Americans and corporate interests.

Pharmaceuticals have one of the highest profit margins of any business in the US. The lies they have tried to sell with their out and out lying commercials about where the money they make going to develop new meds is a bald-faced lie. Much of the money to develop new meds comes from the taxpayers through the National Institutes of Health. For that matter, almost all businesses have to invest in R & D in connection with growing their businesses. Why should pharmaceuticals be exempt?

The empathy-seeking pharmaceutical commercials are filled with the sincere faces of employees (or actors) and doctors (or actors) telling how we're all in this together. Well, we ARE NOT all in this together. Furthermore, those of us who cannot afford our meds derive little or no benefit from the promised miracle drugs of the future.

The longer I live the more I believe that health issues just may not belong in the hands of the for-profits. The old and tired belief that competition is good in these areas is composed of the same stuff as those mounds in cow pastures that one should avoid stepping in. Yes, there is competition but the consumer rarely, if ever, derives any benefit from that competition. I assure you from the bottom of my heart that the CEO's and COO's etc of these firms ultimately do not care about anything other than their compensation and keeping stockholders happy. If these executives wish to disagree they must remember that actions ALWAYS speak louder than words.

Americans have long been 'raped' at the cash register for the meds they need while the exact same meds are sold all over the world for a fraction of what we must pay. Team this with the protectionist Bush administration that has fought re-importation of meds to the US at much lower prices and it is clear that we can expect little or no help in this struggle from the paharmaceutical industry nor from the US government unless things really change with the new House and Senate.

Demand real change. All Americans deserve to have access to the medications they need to live.

3 Posted by Patti at 11/09/06 10:54 AM

Hey, folks -- all of you who take these expensive pharmaceuticals -- yes, all of you who would be DEAD and 6 FT. UNDERGROUND right now if you DID NOT have these wonder drugs for high BP, cholesterol, diabetes, etc., etc., etc., etc.: All of your complaining and bitching about having to pay for these drugs is a joke! You're alive to complain, get it?????? And no, no, no, the pharma companies will *NOT* be having big holiday parties this year, gang .... instead, they'll be FINALLY able to actually give some of their tireless researchers a raise. I went 7 - count 'em, 7 - years WITHOUT SO MUCH AS A 1 CENT RAISE!!!!!!!!!!!!!!!!!!!!!! Why, as a #1, stellar performer in my division, was I not given a raise? Because of "belt tightening" measures needed to keep drug costs down!!!!!!!!!

4 Posted by Charles at 11/09/06 11:57 AM

People here demanding cheaper drugs are not as informed as their conclusory statements make them sound.

If you like having modern medicine you should thank drug companies who fund basically all research, university and otherwise. They also give away a substantial amount of free drugs to those who cannot afford insurance but make too much money to get medicare/medicaid. It's not perfect but if the drug companies were not profit driven we would have 1970's medication because there would be no incentive or financial way for very smart people to spend decades creating new drugs. Socialised medicine will give us cheap and vastly inferior medical treatment as we watch the profession fail to make any new discoveries, or create new drugs. This is what Europe has. Do you want that? I have lived there and their medical system does not hold a candle to ours, even though ours is far from perfect.

I'm not a conservative person but some of this should be known and posted on websites geared specically toward the downfall of drug companies in order to be better informed and to fix the problems we as a nation are faced.

5 Posted by Jerome Hoffman at 11/09/06 02:35 PM

In response to comments 3 & 4 -- first of all, there are very few wonder drugs; as a professor of medicine for some 30 years now, i can attest to the fact that by far the most important drugs we use have been around for decades, are all off patent, and cost pennies. Most expensive new drugs, on the other hand, are either copy-cat medicines, are used to treat "diseases" that have been created by marketers to increase sales, and/or add nothing to far cheaper alternatives. In an age where the pharmaceutical industry spends far more on advertising than on research, that doesn't keep most of them from being blockbusters.

Second, even if we did benefit from some of the expensive new drugs (and there are a tiny number which are truly useful), there is absolutely no reason for the cost to be what it is. Not only are drugs far cheaper in the rest of the industrialized world, but drug companies routinely make the highest profits of all industries. Prices could be enormously less, and profits would still be as good as those of most other industries.

So the reason some people who work for drug companies might not get a raise has absolutely nothing to do with "keeping drug costs down" (!!) -- it has to do with keeping profits obscenely high. Industry "belt-tightening" periodically involves downsizing staff -- even though the number of drug reps (marketers) continues to grow. "Belt-tightening" also never seems to involve company execs, who always seem to get raises, above and beyond the many millions they already make.

The Medicare "drug benefit" fiasco is of course a windfall to the pharmaceutical industry (which does more lobbying and makes more political "contributions" than just about anyone else), and at the expense of the rest of us. But this is not because the industry is "evil" -- they're simply doing what we as a society ask them to do ... which is to make every cent of profit possible. They're also smart enough to know that in order to accomplish that they have to claim that they're interested only in saving lives, and that "we're all in this together."

We, on the other hand, can't change anything unless and until we realize how enormously the public health suffers, and at what phenomenal economic cost, and force our politicians not only to make such obvious changes as negotiating drug prices (a basic "free-market" principle that nevertheless seems to have escaped our "the market solves everything" leaders), not to mention even more fundamental, and important, ones like making the FDA a servant to the public, instead of to industry, and changing the research agenda so that it's truly about finding useful drugs, instead of simply profitable ones.

6 Posted by Dot Nelson at 11/13/06 06:17 AM

I am a retired health care professional in the state of Virginia and enrolled in the Medicare D program through the Medco Health System with prescription drug coverage. I was receiving 90 day supply of two of my medicataions for $54 and now that cost to me has skyrocketed to over $355 the last time I checked the price.
THANK YOU FOR NOTHING PRESIDENT BUSH.

7 Posted by Hollis Stanford at 11/13/06 08:27 PM

Jim,
I sat up all night and watched the whole mess when congress was debating the Medicare/Drug Bill and it was brought out about the price of drugs being prohibited ...the Medicare was indeed Prohibited from even discussing the issue with the Drug Companies...That was a Big issue on the floor...but was passed anyway!
Hollis

From: Jim Whittington
Sent: Monday, November 13, 2006 4:21 PM
Subject: Fw: WHITE HOUSE SPOKESMAN INSISTS PRESCRIPTION DRUGS ARE CHEAP ENOUGH
In addition, I heard Barlett say the below.
Further, The Federal Law that set up the "Part D" for Seniors, GET THIS "PROHIBITED" Medicare from attempting to negotiate lower drug prices. Check that out.
Jim Whittington
Laurel,MS.
----- Original Message -----
From: Hollis Stanford

Sent: Monday, November 13, 2006 3:44 PM
Subject: WHITE HOUSE SPOKESMAN INSISTS PRESCRIPTION DRUGS ARE CHEAP ENOUGH

It seems apparent to this ol' fellow that the election of 7 November 06 Did NOT deliver us from Stupidity in Congress!...BE SURE and KEEP this in mind for the 2008 Elections....Write down the Names and vote accordingly.

Hollis Stanford

HEALTH CARE -- WHITE HOUSE SPOKESMAN INSISTS PRESCRIPTION DRUGS ARE CHEAP ENOUGH: The federal government does not need to negotiate lower prescription drug prices for seniors on Medicare, claimed White House counselor Dan Bartlett said yesterday, insisting that drug prices have "come down" and that "the proof is in the pudding." Wherever the proof might be, it certainly isn't in the facts. Drug makers have increased the prices on many of the top selling drugs this year by as much as six percent, double the inflation rate. Because Medicare doesn't require any discount over the list price, "drug makers are being paid as much as 20 percent more for the same drugs that they had already been providing to recipients under Medicaid." Furthermore, spiraling drug costs are expanding the coverage gap in Medicare Part D, leaving millions of Americans without coverage. The New York Times reports that, with the current Medicare prescription benefit, big drug companies are enjoying "a financial windfall larger than even the most optimistic Wall Street analysts had predicted." Taxpayers could save as much as $190 billion over the next ten years if Medicaid negotiated prices directly with drug makers, rather than through private insurers which "pay higher prices than government agencies, like the Veterans Administration, that buy medicines directly from drug makers."

8 Posted by Marcellus E. Connor at 11/15/06 08:12 PM

It is very important that the Congress do something about Medicare Part D as it currently stands. It has the feeling and appearance that it was not put in place for the benefit of the people at large, but for a specific group who probably has no need for it, and who stands to make a lot of money as a result of it. Everything in the bill as passed needs to be revisited, and those items that are found to be a hindrance to the population who needs it the most, rewritten, changed or taken out. It is the long range impact of this legislation that will have the greatest effect upon those who need the benefits it could offer the most.

9 Posted by Bob Matheson at 11/16/06 01:28 PM

See sample pricing for Cosopt below. Learn about Merck's discount program too!

Be assured the CEO's and board of directors have had raises even if the "hard working" employees have not. Just look at the financial reports filed with the SEC. Typically 17% profit, the oil industry does well at 5%. Many good, responsible companies operate at 1% or 2% profit. Huge sums are going into marketing. Marketing staff is being padded into R & D's budgets at many companies.
NO direct public advertising for prescription drugs worked well and was responsible!

Sample pricing 11/15/06 for Cosopt, a Merck product for Glaucoma 10 ml.

List USA --------$126.25
Pharmacy Price --$105.34
Online US Pharm ~$105
With Merck Uninsured Discount $90.54
From Canada -----$65.00!

Be assured neither Canadian Pharmacies nor Merck are selling at a loss! Merck makes a profit on Cosopt in Canada at $65.00 price from the pharmacy!
My experience with a Canadian Pharmacy

10 Posted by BaileyJeanBaker at 11/21/06 04:22 PM

You are all talking about the big pharma companies. I worked for one and they had 48,000 in a budget for a departmental christmas party. Not a whole company, but this was one department. Of course Managed Care was involved. They do know how to hit that pocket and make sure where the money comes from and where they will spend it. Feeding themselves. "All the little piggies in their piggy world". It is disgraceful what big pharma is doing. The money spent entertaining themselves is a crime. Weekly drunken trips for a good time (call it a meeting). If you worked in one you would know that a soap opera is mild to what goes on behind those closed doors.

11 Posted by D DWYER at 01/09/07 03:26 PM

Here's something all Seniors & others need to know when choosing a plan under Medicare Part D.
When this plan was first conceived we were told we would have a "choice" of plans to subscribe to.
In December 2005, I received notification that a Plan had been "chosen" for me. I had, seemingly, no options. I contacted my Congressman who put me in touch with what is called in my State. Medline. They assisted me, in helping me choose, myself, from different plans. I am also eligible for the extra help, and am dual eligible, which means I should not have to pay a Premium or Deductible. I chose a Plan, and sent a letter to the Plan that was chosen for me, declining them.
I never received a Policy from the Plan I chose, even though I called Medicare repeatedly advising them this. All kinds of problems occured when I went to have my prescriptions filled in 2006, from the pharmacy billing the wrong company to other things. In early October, I received a letter from Medicare advising me I was overcharged all year for my prescriptions, In March of 2006, I had received a card, however, never did I receive a policy, The card, itself, was interesting. It listed the company I had chosen, Prescription Pathways in one corner, on top it said Pharmacare, and the other corner had an insignia CVS. I didn't think too much of it, until I received the letter from Medicare. Now, to make matters worse, CVS was the pharmacy that filled my prescriptions all year. I also found that Pharmacare had an office in town. So I went there and inquired whether they would fill my prescriptions. I was talking with a girl at the front desk, when out from behind came a guy who said "We are owned by CVS!" I waited almosr 2 months to be reimbursed from them, and they knew all along they were over-charging me! The moral of the Story: Any Person choosing a Plan under Medicare Part D, should be aware of this, and look closely to see what companies are interwined.
Don't make the same mistake I did. If I had not received that letter from Medicare, I would never have known, and they would have gotten away with this scheme to overcharge me for something that I did not choose in the first place. There were and still are too numerous mistakes and blunders made with this plan and we are the ones who suffer, as a result.