Re: A Prescription for Plutocracy


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A Prescription for Plutocracy
Is Washington hopelessly gridlocked? Not when the rich and powerful
need help. The latest evidence: the just-released official analysis of
the first full year of the new Medicare prescription drug benefit.
January 14, 2008

By Sam Pizzigati

Imagine yourself the CEO in an industry that has been registering
record profits year after year - mainly by overcharging consumers for
products they feel they literally can't live without. But suddenly you
find yourself with a problem: Your products have simply become too
costly for consumers to afford.

So what do you do? You convince lawmakers to plow billions of taxpayer
dollars into a program that will help consumers pay for your
overpriced products. Problem solved. You can now, as a certified CEO
genius, look forward to years of windfall rewards.

This scenario sound far-fetched? You haven't been paying attention.
This scenario has actually just unfolded - in the pharmaceutical
industry.

Big Pharma, as the industry has become less than affectionately known,
entered the 21st century the most profitable industry in the world. In
2002, notes Harvard Medical School analyst Marcia Angell, the top 10
drug companies in the United States netted more earnings than all the
rest of the companies in the Fortune 500 taken together.

Big profits like these translated into hefty paydays for top Big
Pharma executives. In 2001, the five most lavishly compensated drug
company execs averaged over $30 million each. Three Big Pharma execs
entered that year with at least $131 million worth of stock options
they hadn't yet cashed in.

The fuel for these big earnings: revenues from outpatient
prescriptions that were rising at a remarkable 15 percent annual rate.
By 2002, 12 cents out of every dollar Americans were expending for
health care were going for prescription drugs.

But no industry can sustain, over the long haul, such annual revenue
increases. For Big Pharma, the first big sign of trouble would come in
2003. In that year, after over two decades as Corporate America's most
profitable sector, the pharmaceutical industry lost its number one
profitability ranking, dropping to third place.

The industry would waste no time crying in its chemicals. In that same
2003, Big Pharma would team with the Bush White House to push through
Congress legislation that added a prescription drug benefit to the
Medicare program.

Seniors, the White House crowed, would finally have help paying for
their prescriptions.

This new Medicare legislation guaranteed all seniors eligibility for
some form of drug benefit by January 2006. But the legislation didn't
guarantee any decrease in prescription drug prices.

Indeed, the new law specifically prohibited any federal government
action to negotiate for lower prices directly with the drug companies.

"The key goal," notes Ron Pollack of the health care watchdog group
Families USA, "was to make sure there'd be no interference in the drug
companies' abilities to charge high prices and to continue to increase
those prices."

To safeguard this price-inflating provision, Big Pharma would spend
the next three years overrunning Capitol Hill with lobbyists and cash.
Through 2005 and the first six months of 2006 alone, the Center for
Public Integrity reported last April, drug companies and their trade
groups spent $155 million on lobbying Congress.

Those dollars, the Center notes, unleashed an army of 1,100 paid
lobbyists on the House and the Senate - over two lobbyists, in effect,
for every Capitol Hill lawmaker.

On top of that, Big Pharma invested millions more in campaign
contributions, over $70 million in all from 1998 through June 2006 -
and spent even more millions ushering members of Congress into
America's economic elite.

In 2005, for instance, the industry's top trade association - the
Pharmaceutical Research and Manufacturers of America - named former
Congressman Billy Tauzin its new CEO. His pay package: a reported $2
million, over 15 times his take-home as a lawmaker.

These Big Pharma investments all paid off. Attempts to amend the 2003
drug "benefit" legislation went nowhere. The legislation went into
full effect exactly as the drug industry wanted.

The results would be predictable. In 2006, overall outlays for
prescription drugs "accelerated for the first time in six years,"
soaring 8.5 percent.

An analysis of that increase, published last week by the U.S. Centers
for Medicare and Medicaid Services, hands all the credit to the new
federal Medicare benefit.

In 2006, $41 billion taxpayer dollars went toward underwriting the
drug benefit. Over the course of the year, the share of the nation's
total prescription drug costs paid by Medicare leaped from 2 percent
to 18 percent.

In other words, an unalloyed victory for the drug companies. They can
now continue to overcharge with impunity. America's taxpayers have
come to their rescue.

The drug companies, not surprisingly, aren't exactly sharing their
new-found good fortune. In 2007, Fortune reported this past December,
Big Pharma deep-sixed over 30,000 jobs. The companies are busily
outsourcing, big-time, to China and India.

Drug company executives, on the other hand, continue to prosper. Wyeth
CEO Bob Essner, for one, pulled in over $32 million in 2006.

Other industry execs have fared even better. Pfizer CEO Hank McKinnell
exited his executive suite with a $200 million golden parachute in
2006. Another Pfizer executive, executive VP Karen Katen, walked off
with a $78 million "consolation prize" after she lost out in a bid to
become McKinnell's successor.

Last Monday, a day before the official release of the first Medicare
benefit analysis, a bipartisan band of nationally prominent former
lawmakers - mostly former U.S. senators along the lines of Sam Nunn
and David Boren - gathered at a conference in Oklahoma to lament
gridlock in Washington, D.C.

The nation's two parties, this illustrious group avowed, have lost the
capacity to solve problems.

Hogwash. Lawmakers in Washington, as the Medicare prescription drug
benefit story demonstrates so clearly, solve problems all the time.
Rich people's problems.

In a plutocracy, that's simply what lawmakers do.

http://www.cipa-apex.org/toomuch/articlenew2008/Jan14a.html

An excellent argument for not allowing Congress and the special
interests that control it from completely taking over the insuring and
bill paying aspects of health insurance.

OR

USNHI would negotiate prices for prescription drugs, medical supplies
and equipment. So, just like before when your reasons for opposing it
were that doctors might refuse to see you or that you might lose the
care you need, your arguments don't hold up.

Yes they do.

Why is it that those who distrust the federal government the most want to
give them more power than anyone else does?

You miss that no bill, no idea, no concept, becomes law without Congress
voting for it. Congress is composed of people who are susceptible to
interest group pressure. The health care industry is extremely
powerful, as is the insurance industry. Even if this actual bill were
ever debated (which it won't be because of what I just wrote), it would
be tweaked, altered, changed, modified, amended, ad nauseum until the
very groups you fear and despise the most would have more control over
the system than they do now, all in the name of "single payer". All of
the Congress doesn't support this and never will in a million years; and
they'd be the ones passing all the amendments that would radically change
it.

You can't wave the magic wand and instantly make all congressmen and
senators, all lobbyists, all citizens for that matter, support this bill
of yours. Even debating it would open the pandora's box and allow the
powerful to wave their *truly* magic wands and ensure that this sweeping
reform would in the end benefit themselves.

Change in Washington is possible only incrementally and when there is a
consensus on how to approach an issue. Smaller goals, less sweeping
bills, offer less opportunity for special interests to work their magic.
I prefer a president with his head on earth instead of in the clouds,
someone who could build consensus and push for incremental change.

Besides, as long as the Democrats have less than 60 senators (and I'll
emphasize even if they DID have 60 or 70 senators) this bill you support
will have zero chance of becoming reality.

I admire you Kath, but my politics are a little less ethereal than yours.
I prefer to see something actually change as opposed to dogmatically
sticking to some fringe position that has no chance of ever bringing
about any change at all.

Or, as is the case with this bill (if it were ever to be debated)
bringing about change that would simply provide an excellent opportunity
for the powerful to increase their power.

Not to mention I don't like the whole idea to begin with.................

OR

Okay, that's your opinion and you're entitled to it. But as long as there
are forty three million people with no insurance, as long as there are
kids who have insurance but die because their insurance companies deny
their care, as long as we are leading every other country in the number of
preventable deaths, I won't stop hoping and working for change here. I
find it utterly and absolutely unconcsionable that we are supposed to be
America, but we let our own citizens die for lack of healthcare while it's
a right in every other country.

I agree with your outrage. Lord knows I posted enough of my outrage over
the state of the health care system over the years.

I just think it would be nice to actually make some progress.

Its the same with every issue; the American people, much less powerful
special interest groups, aren't about to instantly turn on a dime. Gay
marriage will someday be a reality; but first you had to have gays included
in hate crimes laws, equal employment opportunities, domestic partnerships,
then civil unions, then someday, after some extensive and lengthy leadership
and a period for the citizens of this country to adapt to the idea, it will
become a reality.

We need people like yourself on the fringe to keep proclaiming their
beliefs. It helps move things along. But I'm not on the fringe. I
support solid incremental change which is possible only when a consensus of
both the populace and the Congress and even the special interest groups are
ready to move.

That's why I support a candidate who I think has the best chance of making
that happen.

OR




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