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The drug industry has authorized its lobbyists to spend as much as $150 million on television commercials supporting President Obama’s health care overhaul, beginning over the August Congressional recess, people briefed on the plans said Saturday.
The unusually large scale of the industry’s commitment to the cause helps explain some of a contentious back-and-forth playing out in recent days between the odd-couple allies over a deal that the White House struck with the industry in June to secure its support. The terms of the deal were not fully disclosed. Both sides had announced that th
Prescription drug manufacturers, represented by their trade and lobbying group, Pharmaceutical Research and Manufacturers of America (PhRMA), have one of the most powerful and successful lobbies in Congress.
In fact, the Congressional Budget Office projects that if drug manufacturers were required to give Medicare Part D plans the same rebates they give the Medicaid program, the federal government would save $110 billion over ten years—$30 billion more than PhRMA’s offer with that single change.
Language was inserted into the law that explicitly prohibited the government from directly negotiating with drug manufacturers for lower drug prices. That has meant billions of dollars in extra profits and an assurance that the government would not interfere in how they set their prices.
Their gain was our loss. As I explained in a previous post, evidence shows that the prices negotiated by the private Medicare Part D plans are substantially higher than prices that government-run programs like the Department of Veterans Affairs (VA), Medicare Part B, Medicaid and those in other countries are able to obtain for their patients. The private plans' inability to secure better prices has meant higher costs for people with Medicare and for taxpayers.