Shuffling the poor to Medicare�s Plan D will net Big Pharma billions
By Jerry Mazza
Online Journal Associate Editor
Jul 21, 2006, 00:52
New profits for Big
Pharma, estimated at $2 billion or more this year, will come from the transfer
of millions of low income and poor folks to Medicare�s new Part D (for dumb)
that went in effect in January 2006, as reported in The
New York Times.
Thanks to George
Bush and Company, under Part D the prices insurers will pay for medications
given to poor and disabled people transferred from Medicaid will be a hell of a
lot higher than Medicaid would have paid, a program created originally for the
poor. Nice work, fellas. You�ve guaranteed your 2006 campaign contributions.
In fact, some 6.5
million low-income old or disabled poor folks were shoveled into the Part D
Medicare program for drug coverage to provide this strong dose of corporate
welfare. Since all others needs of these recipients are still covered by
Medicaid, the transferees are called dual eligibles, as if they were being
given more, not short-changed in the long run.
The scam is that
drugs tend to be cheaper under the Medicaid program because the states and
buyers receive the lowest available prices by law. And you may remember, Bush
wouldn�t allow Medicare to bargain with Big Pharma to get the lowest possible
prices. Why on earth would he want Medicare pay the higher prices if not to
line neocon pockets?
Ergo, since Park D
(for even dumber) went into effect, Big Pharma has shamelessly hiked prices of
their brand-name drugs an average of 3.6 percent. Although the actual amount
spent relies on what each of the 81 Part D insurers work out, count on costs
for those 6.5 million dual eligible people�s drugs to go up, and the difference
being sucked up by federal taxpayers. Isn�t it good to know DC is always
thinking of us, and how they can pick our pockets as well as the bones of the
piece of corporate welfare was brought to you by a provision of the 2003
Medicare law that exempts Part D drugs, as mentioned, from �best price�
rebates. The drug makers have been mandated to give the state Medicaid agencies
those rebates since 1991. When smart people ran the government, those rebates
were meant to insure that state agencies got the every day low price.
federal and state government paid more than $14 billion each year for the drugs
of those 6.5 million transferred recipients. Without the best-price rebates, the
bill would have been 25 percent higher, about $17.5 billion.
Now nobody�s sure
what the complete drug tab will be for those people shifted into Part D, though
everybody knows it will be higher. Medicare, they say, won�t have real numbers
until it chews up hundreds of monthly reports that the plans in the Part D web
profits off the backs of dual-eligibles are already being seen by Big Pharma,
amounting to double-digit increases in specific drugs used heavily by Medicaid
patients. Like Lamictal, an antipsychosis drug from GlaxoSmithKline, up 33
percent in sales to $305 million in just the first quarter. Seroquel, an
antipsychotic drug from AstraZeneca, zoomed up 29 percent to $590 million.
Sales of Plavix, a blood thinner from Bristol-Myers Squibb, were up 26 percent
to $850 million.
Seroquel are major drugs in the Medicaid programs, prescribed for bipolar
disorder and other mental health problems, not exactly minor issues.
Sadder, some two
million of the people passed into Part D are both disabled and younger than 65.
More than half of them have mental health problems. I wonder if there�s a
correlation for a study right there. In fact, Medicaid patients made up for 80
to 90 percent of the total market for these �high-end� antipsychotic drugs.
best-price rebates cut some 15 percent off Big Pharma's list prices.
California, New York and Maine managed even larger rebates. Now, with Part D,
price wheeling and dealing will be done by Medicare drug plans of all sizes. In
the true style of Bush administration circumspection, prices will be given to
Medicare, but under a lobbyist-touted provision they will be kept secret to all
others. That gives you a feeling of confidence, doesn�t it?
On top of that, the
federal agency that oversees Medicare and Medicaid is requiring that states return a total of $5.8 billion to
Washington from federal funds given to the Medicaid program. That�s the number
that the agency estimates states will be saving since they�re no longer
providing drugs to dual-eligibles.
But the states
regard these refunds as �clawbacks,� and do not agree with the federal formula
to arrive at the repayment numbers. Given the administration�s history with
fuzzy math, from Iraq budgets to the budget deficits, not to mention tax cuts
to the rich or the bogus claims of Social Security bankruptcy, I would put my
money on the states� claims of �clawbacks.�
surprise, surprise, the Supreme Court brusquely nixed hearing a case filed by
the the attorneys general of Texas and four other states that sought to bury
the repayment formulas as unconstitutional. The states' position is that the
federal formula is using higher drug costs that many Medicaid programs have
actually been spending. In other words, the feds are fudging the numbers
And so, here are
Medicare and Medicaid government agencies nickel-and-diming the states over
monies for drugs for the poor, the aged, and disabled, while the market for
Part D dual-eligibles is looking swimmingly lucrative for Big Pharma. And so
take a minute and scream with me. Maybe DC will hear us: the well-being of the
most vulnerable is not the place to cut. Cuts should come from the gluttonous
military industrial complex and tax cuts for the rich (to mention a few) that
are sucking America�s blood dry. That�s my humble prescription for a healthier
Jerry Mazza is a freelance writer living in New
York City. Reach him at firstname.lastname@example.org.
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