Let’s Get The Math Right

Americans are hammered with drug commercials daily. Diseases sometimes never heard of, with explicative narratives of side effects saturating the screen. But you never hear about profits from the drug that is being advertised. Why don’t anybody talk about drug pricing at all? Is it because the U.S. Supreme Court passed a bill stating that drug companies are not required to open their books? Seriously?

On Dec. 9, 2009, Senator John McCain referred to a New Times article (11/15/09), which reported on health care reform and major drug price increases prior to the reform. The title: Drug Makers Raise Prices in Face of Health Care Reform. Here’s the link.

The transcript as McCain is the speaker:

Here again is a New York Times article entitled “Drug Makers Raise Prices In Face Of Health Care Reform.” And here is a graphic demonstration of it.

So this little line right here, I would say to my colleagues, is inflation — is inflation in this country.

If you look at it, for the year 2009, inflation is actually -1.3%.

Now look at wholesale drug prices.

Annual change, 8.7%.

So while inflation has gone down 1.3%, actual cost of drugs have gone up 8.7%.

So, the article from The New York Times says, “Even as drug makers promise to support Washington’s health care overhaul by shaving $8 billion a year off the nation’s drug costs after the legislation takes effect, the industry has been raising its prices at the fastest rate in years.

The last year the industry has raised the wholesale prices of brand-name prescription drugs by about 9%.

This will add another $10 billion to the nation’s drug bill.”  So let’s get the math right here, my friends.

The drug companies have offered to save the American consumer $8 billion a year and, guess what?

They have increased their prices where it will add more than $10 billion to the drug bill of America’s citizens, including our seniors.

So the math is, they agreed to $8 billion reduction.

They actually will — have already this year seen an increase of more than $10 billion.

So they’re on track to make a $2 billion profit off of their deal.

No wonder they made a deal.

It’s — they add more than $10 billion to the nation’s drug bill which is on track to exceed $300 billion this year.

By at least one analysis, ” it is the highest annual rate of inflation for drug prices since 1992.” And this again — this is the Consumer Price Index right here, the Consumer Price Index.

Fallen by 1.3%.

Drug makers say they have valid business reasons for the price increases.

Critics say the industry is trying to establish a higher price base before Congress passes legislation that tries to curb drug spending in coming years.

So that’s what this is all about.

They increase the prices so that it reaches a certain level, and that’s what they will negotiate on.

And they already are in line to experience $2 billion more in profit than the $8 billion that they can say they intend to cut.

What a Ponzi scheme this is.

A Harvard health economist — excuse me — when we have major legislation anticipated, we see a run-up in increases, said Steven W.Shandelmeyer, from the University of Minnesota.

He has analyzed drug pricing, et cetera.

A health care economist, Joseph Newhouse said he found a similar pattern of unusual price increases after Congress added drug benefits to Medicare a few years ago.

Giving tens of millions of older Americans federally subsidized drug insurance.

Just as the program was taking effect in 2006, the drug company raised prices by the widest margin in a half a dozen years.  So we’ve seen this scam before.

We have seen it before.

And so what is the administration going to do?

The administration sends a letter, I believe last night, not to the sponsor of this legislation, Senator Dorgan, but to another member basically saying they would have to examine the health and safety.

Since when is a prescription drug imported from Canada a threat to American’s health since they obviously have the same standards that we do?

More  of the Senate  Session>> here