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Sunday, February 19, 2006

Cash Cow: The Medicare Part D Benefit and Drug Company Profits

Why does the United Sates capitalistic free market allow for the sale of so many prescription drugs? Drug companies tell us it’s for safety purposes.

In almost all other countries, many drugs sold to help people get well are actually “over the counter” or “OTC” purchases. In Mexico, for example, you can buy any non-narcotic drug from the Physicians Desk Reference (PDR) by simply pointing to a picture of it in a book sitting on the drug store’s counter. Also, the clerk who sells you the drug in Mexico probably isn’t a pharmacist, either. People in Mexico don’t seem any less healthy because they purchase their drugs OTC rather than by prescription, do they?

Why does the US require prescriptions for many common drugs while other civilized countries don’t? And the answer is, because prescription drugs cost more than OTC varieties.

Well, the American people are in for a wonderful new enlightenment as the Medicare Part D Benefit rolls out to “help” our senior citizens pay for the high cost of buying life saving drugs. I predict we’ll see more and more of these life saving expensive drugs become “OTC”.

And just how are drugs deemed "prescription" on one day and "OTC" the next day?

“Hello!?!”. Because, drugs sold without prescriptions aren't covered by any benefit – from Medicare Part D or otherwise. Make no mistake, the powerful drug companies can make this kind of public policy magic happen.

Bingo! Senior Citizens are now coerced into buying the Medicare Part D benefit – because, for them to pass on the option causes a penalty when they need to subscribe. These same beneficiaries will pay their premiums directly to the drug companies regardless of whether or not they take any drugs at all.

Talk about a cash cow benefit for the drug companies? Yes, indeed!

Meanwhile, for years, drug companies with their political gunpoint have held off those consumers who want more access to over-the-counter drugs – precisely because OTC eats away at profits and drug companies want the dough. Well, now these consumers will get their wish to come true as the drug companies will have a reason to give the American consumer what we want – more OTC drugs, as the Medicare Part D benefit fills their coffers.

A cash cow? And How!

Does this sound better than a mega-bucks get rich quick scheme? Well, unfortunately, it’s not a scheme; rather, it’s entirely legal.

With the Medicare Part D Benefit, drug companies will become increasingly rich on the profits made from premiums paid on plans that will become less useful as commonly covered prescriptions become OTC retail and non- benefit-covered purchases.

Each Medicare beneficiary who buys the Part D Benefit makes out a check to the plan they choose,– all with co-pays and deductibles and none really “free”.

We’re actually signing checks over the drug companies who will eventually make your expensive drugs less costly when they become OTC.

Of course, not all drugs can be OTC –not with the federal Food and Drug Administration (FDA) oversight. Nevertheless, mark my words, OTC will be “up for sale” by the drug company lobbyists who will convince Congressmen and Senators about the salient features of OTC versus the politically unpopular regulatory influences of our FDA.

I’m not a public policy psychic, but based upon my years as a nurse sitting in on public hearings alongside drug company lobbyists, there’s no doubt in my mind about where the Medicare Part D benefit is going. Moreover, money paid by beneficiaries but badly needed to support the federal Medicare program, will instead go directly to the bottom line of already rich drug companies. Even more incredulous, drugs made by these rich companies are produced, more often than not, in off shore tax sheltered environments.

What can Americans do about this? It’s simple. Given we’re apparently stuck with this expensive cash cow, we can demand for a provision in the Medicare Part D benefit to cover prescription and non-prescription drugs including vitamins.

Regardless of how it’s designed and packaged, the Medicare Part D Benefit is the drug companies’ public policy cash cow. I doubt the public policy impact of this hatshell trick disaster can ever be repealled during my lifetime.


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