THE BLOG

In The Public Interest: Pharma Can Do More

03/18/2010 05:12 am ET | Updated May 25, 2011

In recent decades, as rising health costs have squeezed American families, businesses and taxpayers, the pharmaceutical industry has reaped fortunes from those rising costs. But a good part of their success has been at taxpayer expense because of a boondoggle subsidy to PhRMA that dates back to the establishment of Medicare Part D.

In 2003, PhRMA's allies in Congress ensured that low-income seniors who are eligible for both Medicaid and Medicare would no longer receive prescription drugs purchased at a lower Medicaid rates. The result is that taxpayers, who pick up the tab for most of these indigent seniors' drug bills, were overcharged.

Fortunately, Senator Bill Nelson (D-FL) is fighting to end this subsidy in this year's health reform legislation.

But after cutting a deal this spring that would limit their contribution to reform to $8 billion per year, PhRMA and its army of Washington lobbyists have balked at spending even one more dollar to fix the health care crisis that their high drug prices helped create. Even though reform would result in more than 30 million additional Americans with prescription drug coverage.

With the Senate fighting hard to pass a bill that would tackle rising costs AND extend coverage to millions more Americans, the time has come for PhRMA to pay its fair share.

Other groups are doing all they can to get to a compromise that will work. And when you look past the headlines and cable news pundits, you find a remarkable story of sacrifice and leadership.

Progressives have had to postpone their hopes for a single payer system, or even a public option based on Medicare, in return for immediate steps to rein in private insurers and extend coverage.

Budget hawks are overcoming their resistance to additional government spending in the short term because health reform will mean lower deficits over the long term.

The labor movement may ultimately have to swallow some version of a tax on high-cost plans, which is anathema to many unions, to achieve their long-sought goal of health coverage for all American workers

Hospitals, many of which are struggling, have volunteered twice as much in savings as PhRMA - $155 billion over ten years - in the expectation of a new system that will cover more Americans and reward the best care.

The leaders of all these sectors, and many others, have staked out tough, courageous positions to win reform that will ultimately benefit each of them, their constituents, and the country as a whole. All of them may continue to wrangle over the details of reform that matter to them, but they remain supportive of the broader effort, because they - like U.S. PIRG - sees that it is in the public interest to do so.

But if Congress asks for a single cent more from PhRMA, its CEO, Billy Tauzin, appears ready to turn against reform altogether. When Americans are still struggling to afford the prescriptions they need, this callousness is just not right.

On December 3rd, Senator Bill Nelson (D-FL) filed an amendment to the health reform bill that would demand more from PhRMA. Ending the giveaway would save taxpayers $106 billion over ten years.

Since PhRMA has benefited so much from our costly health system; it's about time they gave something back.