Are Cheap Prescription Drug Prices on the Horizon or will Big Pharma Benefit from Health Care Reform?

While the health care reform bill that passed in March 2010 was billed as a measure to help Americans gain better access to affordable health care and prescription drugs, the biggest winners may not be U.S. citizens, but rather large pharmaceutical companies themselves. The Affordable Care Act, passed by Congress and signed into law by the President in March 2010, gives Americans better health security by putting in place comprehensive health insurance reforms that hold insurance companies accountable, lower health care costs, guarantee more choice, and enhance the quality of care for all Americans. Even, the powerful pharmaceutical lobby supported passage of the health care reform bill, but only after cutting a few deals with the White House to ensure that their interests would be protected. To illustrate the influence of the pharmaceutical lobby, consider the change in the stance of President Obama, who decried big pharmaceutical companies while he served as senator for Illinois and then again during his presidential campaign, but then did an about-face as president. During Obamas presidential campaign, Obama repeatedly criticized Billy Tauzin, the pharmaceutical industrys top lobbyist and a former congressman from Louisiana, for failing to support the practice of the U.S. government negotiating with pharmaceutical companies for lower drug prices. Then, Obama negotiated with him. Subsequently, Mr. Tauzin was paid $11.6 million in 2010, the year he negotiated the deal that helped pass the Patient Protection and Affordable Care Act, making him the highest paid lobbyist involved in the deal. In closed-door negotiations over the health care reform package, the White House agreed to cap the cost of health care reform to pharmaceutical companies at $80 billion over a 10-year period. Pharmaceutical companies agreed to provide discounts on drugs of up to $80 billion over a decade in return for the Obama Administrations assurances that the government would not negotiate lower prices for Medicare Part D, or the Medicare prescription drug program for seniors.

But Big Pharma would only make deals that would benefit Big Pharma, as pointed out by Donna Smith, legislative representative for the National Nurses United. http://www.nationalnursesunited.org Donna Smith is a long time advocate for health care and patients rights. Her compelling arguments can be read on the engaging website http://guaranteedhealthcare.org. The $80 billion figure is a drop in the bucket in comparison to what they will gain in terms by having a purchase insurance mandate, Smith said in a televised interview (http://therealnews.com/t2/index.php? option=com_content&task=view&id=31&Itemid=74&jumival=4134). The health care reform bill, officially called the Patient Protection and Affordable Care Act (http:// www.gpo.gov/fdsys/pkg/PLAW-111publ148/content-detail.html; Full text: http://www.gpo.gov/fdsys/ pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf), makes it mandatory for every American to purchase insurance coverage by 2014, with some exceptions for low-income earners. Because pharmaceutical companies will not be required to negotiate any bulk pricing on drug sales, which would lower costs, Americans will be purchasing drugs at premium prices under insurance plans. So its a huge windfall for them, Smith said. [W]ith all of us purchasing coverage through private insurance and bringing those dollars in to buy pharmaceuticals, its a huge, huge benefit for them. The Obama Administrations promise to Big Pharma that it will not negotiate for lower drug prices represents the governments willingness to side with large pharmaceutical companies over U.S. consumers interests.

Donna Smith, National Nurses United

If we want to be economical and be fiscally responsible, we negotiate the best deal for the people of this country, not the one that makes Big Pharma the happiest, Smith said. This has beenthe Obama administration's strategy from the beginning, she said. You vilify these folks, the insurance industry and the pharmaceuticals, and then you cut deals in secret with them, and then you announce that these deals are such a marvelous find for the American people. [It] is such a loss for the nation that we aren't further along in this healthcare discussion...accepting the fact that health care is a basic human right, as [Obama] declared during his campaign, and moving forward from that position instead of just moving forward from the position that we want to keep the market in place, including Big Pharma and the insurance industry, Smith said.

On January 31, 2011 the Patient Protection and Affordable Care Act was found unconstitutional by Florida Judge Roger Vinson (http://www.politico.com/static/PPM152_100617_dojhcrsuitbrf.html) in an action brought by 26 states. The On September 21, 2011 the US Department of Justice asked the US Supreme Court to hear the case. The Supreme Court agreed to hear the case in the spring of 2012, with a decision expected by June 2012. For now, the status quo remains -- Big Pharma wields its influence in Washington and U.S. consumers continue to pay premium prices for the prescription drugs they need. Another Point of Negotiation: Personal Drug Importation In addition to giving up the right to negotiate bulk pricing for medications during the debate over health care reform, the Obama Administration promised not to support the importation of prescription drugs for personal use. The agreement was a win for the pharmaceutical industry, as blocking U.S. citizens access to affordable drugs abroad is another method for keeping drug prices artificially high in the United States. The Food and Drug Administration says it does not allow broad importation of pharmaceutical drugs for personal use from abroad because of safety concerns. But the FDA training manual, distributed to field personnel, allows FDA officials to exercise discretion in taking enforcement action against drug importation in the case of lifesaving drugs. By stating that they dont support importation of drugs for personal use because of safety concerns and then allowing the importation of lifesaving, the government is, perhaps, revealing its true position on importation. The government is willing to use scare tactics--implying that prescription drugs purchased from licensed pharmacies in Canada or other countries are less safe than drugs in the United States--to keep pharmaceutical companies in their powerful position of charging exorbitant prices for drugs in the United States. It is ridiculous to think that countries like Canada would allow drugs that were unsafe to be on the market, reports Ms. Smith. [I]t's an insult to the people of Canada and to those systems that have developed very safe processes of their own over time. Big Pharma acknowledged the gains it made in negotiations with the White House by showing financial support for the health care reform bill. After their successful discussions with the White House, Big Pharma spent an estimated $150 million on television ads supporting the bill.

With Big Pharmas support, the measure passed. The final vote in the House of Representatives was 219 to 212 on March 21, 2010. It was signed by President Obama on March 23, 2011. The effects of the health care reform bill on drug prices in the United States are only now being bought into light. Big Pharma Keeps Firm Grip on Drug Pricing in U.S. On October 22, 2011 leaked free-trade agreement negotiation documents revealed that the Obama administration is willing to be more generous to drug companies than free-trade agreements passed under former President George W. Bush. Consumer groups argue that the deal could provide broad patent protection to Big Pharma, rights for Pharma to challenge prices in public health programs and it could weaken existing regulations http://www.citizenstrade.org/ctc/blog/2011/10/22/ leaked-trans-pacific-fta-texts-reveal-u-s-underminingaccess-to-medicine/ Meanwhile, Big Pharma retains its dominant hold on pharmaceutical drug pricing in the United States, engaging in price manipulation tactics to keep company profits soaring. When Big Pharma first secures a patent on a drug, they justify the high cost of the drug by saying they need to recoup the costs of research and development, marketing, and the regulatory approval process. But then they often make a small change to the brand name patent in order to produce and market a slightly different drug at brand name prices. [T]hey tweak that formula ever so slightly at the end of that patent agreement and they get another patent extended for another period of time, Smith said, again reaping huge profits on the backs of the American people. The pharmaceutical companies in the country make bar none the biggest profits of any industry on the planet, Smith said. U.S. citizens already pay for drug research and development through taxes that go to the government institutes of health and government-supported research initiatives, according to Smith. The United States taxpayer is already paying for a lot of that research and development through the institutes of health, through major institutions, universities, and academic institutions, so it's a fallacy to think that if we were to reform health care and hold Big Pharma down on some of its costs, that we wouldn't have research and development, she said.

In fact, other countries are doing quite well with systems in which the public funds the research and the public takes advantage and shares all the information across the board on what happens, Smith said. Big Pharmas tactics of heavily lobbying in Washington and engaging in price manipulation tactics keep the pharmaceutical companies in their powerful market position, despite the health care reform bill claiming to put U.S. citizens needs first. What will it take for this balance of power to shift? To read articles by Donna Smith, please visit National Nurses United http://www.NationalNursesUnited.org and search for Donna Smith:

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