Prescription drug companies spend more than 19 times as much on marketing as they do on basic research. With prescription drug ads airing continuously in the U.S., the cost of medicines has soared. Drug makers charge customers in the U.S. -- especially the government -- vastly more for the same drugs than they do in places like Canada and Europe.
It's hard to believe, but one reason they get away with their sky-high prices is that it's against federal law for the Medicare program to use its unparalleled market power to reduce the cost of prescription drugs. This makes no sense. Taxpayers and consumers would save a huge amount of money if Medicare were allowed to bargain with drug companies to get the lowest prices.
The savings would be significant. Simply allowing Medicare to negotiate the same drug discounts that Medicaid does would save $137 billion over 10 years, according to the Congressional Budget Office. Eliminating price-gouging on that scale would go a long way toward addressing the fiscal challenges that are under constant discussion in Washington - without harming seniors and middle-class families. Sen. Jay Rockefeller (D-W.Va.) and Rep. Henry Waxman (D-Calif.) plan to re-introduce their Medicare Drug Savings Act to make this happen. This proposal has been supported by President Obama and is in the House Democrats' budget plan.
People toss around a lot of ideas about how to reduce Medicare spending and address our money problems. Most of these ideas involve making seniors reach into their own pockets and pay more -- a lot more -- to get the health care they need. Somehow, in the topsy-turvy world inside the Capital Beltway, Republican leaders like Rep. Paul Ryan (R-Wis.) have decided the country can afford to keep giving huge tax breaks to rich people and big corporations -- as long as our grandparents pick up the tab. That is completely backward.
Instead of punishing the folks who count on Medicare, we should start with some commonsense reforms, like letting Medicare use its buying power to bargain for discounts for prescription drugs. The Department of Veterans Affairs and the state Medicaid programs already do this and pay far less for the same drugs.
It's simply wrong to raise Medicare premiums for middle-class seniors, force seniors to wait two extra years before entering Medicare, or end Medicare as we know it, as the Republicans would do. None of these proposals address the underlying problem -- the high cost of health care and price-gouging from suppliers like Big Pharma. Instead, they just shift costs to seniors on fixed incomes.
While the Republicans in Congress want to take away benefits from folks on Medicare who have been contributing to the program since 1965, we ought to be doing things that strengthen Medicare and ensure that it's there for future generations. Seniors shouldn't be paying more while the big pharmaceutical companies run roughshod over retirees who depend on their products. That's why allowing Medicare to get the best price from drug companies is good policy and the right thing to do.
Other wealthy nations use their bargaining power to get good prices for their people, while we pay more than twice as much for the same medicines. That adds up to billions of dollars wasted at a time when deficit hawks like Chairman Ryan are pushing for cuts in vital safety-net services. How has the national political debate been thrown so far off course?
Our goal shouldn't be to shift Medicare costs to seniors and make health care more expensive. Instead we should get the wealthiest Americans and big corporations to pay their fair share in taxes and allow Medicare to bargain with the pharmaceutical companies for fair drug prices. We can do both right now.
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