Health Care Reform Endgame: Old People Matter More Than Poor People


The Sunlight Foundation reports on a "last minute deal" between pharmaceutical companies and health care reformers. The upshot? Old people covered by Medicare matter more than poor people covered by Medicaid.

According to the Associated Press, Senator Max Baucus stated in an interview that the pharmaceutical industry agreed to provide an additional $10 billion to cover the coverage gap in Medicare Part D known as the "donut hole" in exchange for eliminating the expansion of drug discounts at certain health facilities initially included in the Senate health care bill.

The Senate health care bill would have expanded drug discounts under a Medicaid program that serves over 14,000 covered facilities. The Medicaid 340B program provides outpatient discounts on brand name drugs to a variety of health facilities that serve low-income communities. The provision removed in the reconciliation bill would have expanded access to the discount program to cover inpatient drug purchases….

More here. Big PhRma spent about $100 million in "grassroots" activity and advertising in favor of health care reform.

The AP notes the following:

"Pharma came out of this better than anyone else," said Ramsey Baghdadi, a Washington health policy analyst who projects a $30 billion, 10-year net gain for the industry. "I don't see how they could have done much better."

Costly brand-name biotech drugs won 12 years of protection against cheaper generic competitors, a boon for products that comprise 15 percent of pharmaceutical sales. The industry will have to provide 50 percent discounts beginning next year to Medicare beneficiaries in the "doughnut hole" gap in pharmaceutical coverage, but those price cuts plus gradually rising federal subsidies will mean more elderly people will purchase more drugs.

Lobbyists beat back proposals to allow importation of low-cost medicines and to have Medicare negotiate drug prices with companies. They also defeated efforts to require more industry rebates for the 9 million beneficiaries of both Medicare and Medicaid, and to bar brand-name drugmakers' payments to generic companies to delay the marketing of competitor products.

More here.

I'm all in favor of drugs. And health care too. And free markets. What a shame that whatever behemoth just passed will stave off anything approaching free markets in drugs and health care for another decade or so. But at least by then, we'll actually know what was in the law that was just created.

Note for future legislation: Remember, the poor you will have with you always, whereas the old might die but will be replaced immediately by similarly motivated and connected folks.

Hat tip: Ted Smith's Twitter feed.