Prescription Drug Bill 'May be the Most Financially Irresponsible Law in 40 years'

[dirk digler]

http://www.drudgereport.com/flash3.htm

U.S. COMPTROLLER: PRESCRIPTION DRUG BILL 'MAY BE THE MOST FINANCIALLY IRRESPONSIBLE LAW IN 40 YEARS'; Bill Will Add $8 Trillion to Long-Term Medicare Obligations
Thu Mar 1 2007 13:41:11 ET

That Could Already Bankrupt the U.S.

The U.S. government's top accountant says the law that added a prescription drug benefit to Medicare may be the most financially irresponsible legislation passed since the 1960s. U.S. Comptroller General David Walker says Medicare -- barring vast reform to the program and the nation's healthcare system -- is already on course to possibly bankrupt the treasury and adding the prescription bill just makes the situation worse. Walker appears in a Steve Kroft report to be broadcast on 60 MINUTES Sunday, March 4 (7:00-8:00 PM, ET/PT) on the CBS Television Network.

"The prescription drug bill is probably the most fiscally irresponsible piece of legislation since the 1960s," says Walker, "because we promise way more than we can afford to keep." He argues that the federal government would need to have $8 trillion today, invested at treasury rates, to cover the gap between what the program is expected to take in and what it is expected to cost over the next 75 years Ð and that is in addition to more than $20 trillion that will be needed to pay for other parts of Medicare. "We can't afford to keep the promises we've already made, much less to be piling on top of them," he tells Kroft.

The problem is the baby boomers. The 78 million people born between 1946 and 1964 start becoming eligible for Social Security benefits next year. "They'll be eligible for Medicare just three years later and when those boomers start retiring en masse, then that will be a tsunami of spending that could swamp our ship of state if we don't get serious," says Walker.

As life expectancies increase and the cost of health care continues to rise at twice the rate of inflation, radical reform in health care will be necessary, Walker says. He says the federal government is also going to have to find ways to increase revenue and reduce benefits. The alternative is ugly. Walker shows Kroft General Accounting Office long-term projections that assume the status quo continues, with the same levels of taxation, spending, and economic growth. By the year 2040, Walker says, "If nothing changes, the federal government is not going to be able to do much more than pay interest on the mounting debt and some entitlement benefits. It won't have money left for anything else...."

Sen, Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, tells Kroft that this problem is well known among members of Congress: "Yes, they know in large measure, Republicans and Democrats, that we are on a course that doesn't add up." And he acknowledges nobody is addressing the matter. Why? "Because it's always easier not to," Conrad says, "because it's always easier to defer, to kick the can down the road to avoid making choicesÉYou get in trouble in politics when you make choices."

Walker believes the biggest problem may be that everything seems okay now, so people don't have the sense of urgency that's needed to make tough choices. But the longer we wait, he argues, the harder it's going to be to solve the problem. "The fact is that we don't face an immediate crisis and so people say, ÔWhat's the problem?' The answer is, we suffer from a fiscal cancer...and if we do not treat it, it could have catastrophic consequences for our country," he tells Kroft.

[WilliamTheIrish]

You don't say?

[patteeu]

Wasn't this already obvious? With major financial problems already looming because of pay as you go entitlements, what do we do? Add another major dose on top of it all. :rolleyes:

[Cochise]

NOOO WE CANLT BE WIFOUT TEH DRUGS! OLD PEOPLE COLLECTING CANS FOR TEH GDRUGS!

[dirk digler]

I thought many people liked the bill and were touting it as some huge success?

I honestly didn't know much about it until I read this piece and done some quick research.

[trndobrd]

There has to be some kind of less expensive alternative....

[pikesome]

There has to be some kind of less expensive alternative....

That's why my mother quit hoping for me to be President, she's convinced it'll be "re-education" camps for Seasoned Citizens.

[jAZ]

God forbid we let Medicare, the largest buyer of drugs in the nation, negotiate pricing directly with drug companies... instead we should surrender all of that buyer power over to the suppliers. That's good free markets!

[penchief]

There has to be some kind of less expensive alternative....

Is that James Mason and Michael York? Where did that picture come from?

[banyon]

It is the stated goal of the Grover Norquist-styled Republicans to Bankrupt the Federal government. They are well on their way thanks to the abdication of fiscal sanity by both parties.

[Adept Havelock]

There has to be some kind of less expensive alternative....

ROFL.... THERE IS NO SANCTUARY!

That's why my mother quit hoping for me to be President, she's convinced it'll be "re-education" camps for Seasoned Citizens.

Heh..Wild in the Streets, anyone? "We're gonna shut everyone over 12 years old down".

God forbid we let Medicare, the largest buyer of drugs in the nation, negotiate pricing directly with drug companies... instead we should surrender all of that buyer power over to the suppliers. That's good free markets!

While I agree that if we are going to do this we should allow negotiations with the drug companies, I can understand the concerns of those that oppose this, as it could easily be used as a "gun to the head" of Big Pharm... (i.e. You want FDA approval for Unobtaniumol? Give us XXX at cost). That's not a good thing either.

As with most things in life, the answer will be found somewhere between the extremes...I hope.

[trndobrd]

Is that James Mason and Michael York? Where did that picture come from?


Logan's Run. You should be able to find it at your local video store in the Sci-Fi section. Pick up a 6pack of beer and bag of Soylent Green chips and make an evening of it.

[patteeu]

I thought many people liked the bill and were touting it as some huge success?

I honestly didn't know much about it until I read this piece and done some quick research.

Social Security is often described as one of the most successful social programs of all time, but it has a looming financial crisis built into it. Apparently, it depends on what you consider success.

The prescription drug program has earned positive feedback from seniors other senior advocates so in that sense it has been a success. But those people aren't judging it on the basis of it's fiscal characteristics.

[jAZ]

While I agree that if we are going to do this we should allow negotiations with the drug companies, I can understand the concerns of those that oppose this, as it could easily be used as a "gun to the head" of Big Pharm... (i.e. You want FDA approval for Unobtaniumol? Give us XXX at cost). That's not a good thing either.
I hadn't heard that articulated as an objection. It's ceratinly not something the drug companies are talking about publicly. That said, I see how that's a potential issue. I'd say that it's less objectionable than the current administration holding the citizen's hostage making reimported drugs from Canada/Mexico illegal.

[patteeu]

I hadn't heard that articulated as an objection. It's ceratinly not something the drug companies are talking about publicly. That said, I see how that's a potential issue. I'd say that it's less objectionable than the current administration holding the citizen's hostage making reimported drugs from Canada/Mexico illegal.

You need to look into the objections to these superficially appealing proposals. Reimporting from Canada will do nothing other than cause the prices for Canadian drugs to go up as US pharmaceutical companies stop agreeing to discount prices (because they can no longer make it up in the US market) or cause the Canadians to violate the patents of American drugs so they can be produced more cheaply by Canadian companies who don't need to recoup the costs of R&D.

[jAZ]

Reimporting from Canada will do nothing other than cause the prices for Canadian drugs to go up as US pharmaceutical companies stop agreeing to discount prices ...
Let the buyers and sellers decide that, rather than letting the Bush Administration create an artificial market barriers harming buyers.
...or cause the Canadians to violate the patents of American drugs so they can be produced more cheaply by Canadian companies who don't need to recoup the costs of R&D.
Since when does a "conservative" allow the concerns of a private firm and a seperate soverign nation drive our own policies?

Seriously, the logical disconnect that's going to be on display over the next 2 years will be absolutely stunning.

[dirk digler]

Social Security is often described as one of the most successful social programs of all time, but it has a looming financial crisis built into it. Apparently, it depends on what you consider success.

The prescription drug program has earned positive feedback from seniors other senior advocates so in that sense it has been a success. But those people aren't judging it on the basis of it's fiscal characteristics.

I think SS is a very successful program but it definitely needs to be reformed.

The more I read about the prescription drug program the more I realize it it was a huge mistake.

Apparently months after the passed the bill the Bush administration was already saying it was going to cost a whole lot more than they said it would.

The White House released budget figures yesterday indicating that the new Medicare prescription drug benefit will cost more than $1.2 trillion in the coming decade, a much higher price tag than President Bush suggested when he narrowly won passage of the law in late 2003.

[Baby Lee]

Let the buyers and sellers decide that, rather than letting the Bush Administration create an artificial market barriers harming buyers.
Canada is the one who created the artificial market barriers. Bush just made sure that when the drugs crossed the barrier, they didn't return.

[BucEyedPea]

Apparently months after the passed the bill the Bush administration was already saying it was going to cost a whole lot more than they said it would.
Well, if ya' checked the govt's record this is ALWAYS the case with any program. Gov't just is not competent. It is the problem—not the solution.

[jAZ]

Canada is the one who created the artificial market barriers. Bush just made sure that when the drugs crossed the barrier, they didn't return.
That's not true at all. You *might* be able to argue that they created the artificial pricing structure... but that's not a "barrier".

And the same is not true of Mexico.

The drug companies price their products on willingness to pay in Mexico. The economy is worse, the people can't pay as much, so the prices are drastically lower there, and the drug companies still make a shit ton of money, even at the lower prices.

Canada's capacity to pay is higher, so their prices are higher, but their government uses their collective buying power to drive down prices.

Again, market forces.

The only artificial market is the US, where the Pharma industry has lobbied effectively to create barriers that force the US to be pricing island and they jack up the prices based on our higher capacity and williness to pay.

I don't blame them, but it's not their god-given right to have such a market either.

[BucEyedPea]

I don't blame them, but it's not their god-given right to have such a market either.
BigPharma shouldn't be granted any patents if they use any govt funded university money for research either. That right there should bar them from any claims of exclusivity. This could be looked into as a step toward reforming.

[patteeu]

Let the buyers and sellers decide that, rather than letting the Bush Administration create an artificial market barriers harming buyers.

Since when does a "conservative" allow the concerns of a private firm and a seperate soverign nation drive our own policies?

Seriously, the logical disconnect that's going to be on display over the next 2 years will be absolutely stunning.

I'm not saying that the current US policy is the right one, I'm just saying that reimportation isn't the panacea that many think it is.

But on a side note, as far as government regulation of the market is concerned, the government is already into regulating this particular market up to it's elbows. We're talking prescription drugs here.

[BucEyedPea]

I'm not saying that the current US policy is the right one, I'm just saying that reimportation isn't the panacea that many think it is.

That's true. If drugs become scarce in Canada due to it's own govt policies vis-a-vis US drug re-importation, the Canadian govt may just pass a law to stop drug exportation to the US. It is a temporary fix. Though I still support it for the time being. Ron Paul, a free-marketer and a doctor, supports it too.

But on a side note, as far as government regulation of the market is concerned, the government is already into regulating this particular market up to it's elbows. We're talking prescription drugs here.
Absolutely correct. We are only touching the surface on pharmceuticals when we only tap reimportation.

What is disturbing is the amount of free-maket think-tanks that have railed against drug reimportation without enough deeper analysis of the problem—mercantilist policies for well connected businesses to govt. Unfortunately, the Republicans support this type thing despite its rhetoric for free-markets.

[MarcBulger]

Anytime you take something from citizens to give it to other citizens and you use the Govt's power to do so you will have the most "Financially Irresponcible Law". Look as Social Security.

[Adept Havelock]

Bush just made sure that when the drugs crossed the barrier, they didn't return.



Yep, that must be why so many folks (including a few of my relatives) simply can't get drugs from Canadian pharmacies anymore. Bush really "made sure" of that. ROFL

[dirk digler]

New Poll by CBS/NYT

SHOULD GOVERNMENT GUARANTEE HEALTH INSURANCE FOR ALL?

Yes
64%

No
27%


WHICH IS MORE SERIOUS?

Providing health insurance for all
65%

Keeping health care costs down
31%

[pikesome]

New Poll by CBS/NYT

SHOULD GOVERNMENT GUARANTEE HEALTH INSURANCE FOR ALL?

Yes
64%

No
27%


WHICH IS MORE SERIOUS?

Providing health insurance for all
65%

Keeping health care costs down
31%

Wait till they hear about the tax increase. People are always willing to spend other people's money.

[BucEyedPea]

Wait till they hear about the tax increase. People are always willing to spend other people's money.
Yup! And's this is one reason I am opposed to democracy, or letting the people have whatever they want or because a majority wants it ( even over a constitution). They always vote their own govts into bankruptcy with stuff like this. They don't understand the full implications and do not study the issue...they just want it.

[BucEyedPea]

I said this last week. Look what turns up in my evening reading:

Canadian groups protest U.S. bid to legalize bulk drug imports
March 7, 2007 - 18:50
WASHINGTON (CP) - Legalizing bulk imports of Canadian prescription drugs will deplete supplies, raise prices and strain relations, pharmacists and a patients' group told the U.S. Congress on Wednesday.

The Canadian groups submitted a brief to a U.S. Senate subcommittee that held a hearing on two bills that would allow cheaper drugs from north of the border....

was signed by the Canadian Pharmacists Association, Ontario Pharmacists Association and Best Medicines Coalition, a patients' advocacy group.

"Our government should act now to take pre-emptive steps that will protect Canadians today," said Louise Binder, chairwoman of the coalition.

http://www.macleans.ca/world/wire/article.jsp?content=w030769A