Friday, September 2, 2011

Does the Drug Industry Trust the "Super-Committee"?

The New England Journal of Medicine's online-first includes an opinion piece--
--by former Clinton health adviser Christopher C. Jennings, on why a lot of special interests in the health field will do their best to torpedo any proposals coming out of the Congressional "super-committee." The political wisdom seems to be that the threat of $1.2 trillion in automatic budget cuts, that would be triggered by a rejection of the committee's proposals, is so scary that everyone will rush to embrace what the committee proposes, Jennings says--no, if you go by the old adage of better the devil you know, then most healthcare special interests have every reason to choose the fallback across-the-board cuts.

Jennings proceeds to list all the various special interests and explain why they'd be better able to cope with the fallback cuts, from their self-interested point of view--despite the fact that public policy and public health goals would clearly be better served by avoiding such cuts and adopting proposals that the super-committee is likely to propose. (In other words, our dysfunctional political process, far from having discovered the way to get beyond the present partisan impasse, has once again assured gridlock.)

What role does the drug industry play in all this? Jennings has little to say about them as a specific player in this game except to point out that there seem to be two options open. One is the automatic fallback cuts. These are likely to amount to 2% overall in Medicare, but Medicaid would be protected from these cuts. The other option would be a sensible plan to reduce costs of both Medicaid and Medicare without cutting useful services for patients, and almost for sure, any such deal would call for extending to Medicare the privilege now enjoyed by Medicaid of using its bulk purchasing power to force discounts in drug prices. The specter of Medicare being able to bargain from a position of real strength has always sent shivers of the spine of the drug industry. So they'll take the fallback cuts, thank you very much.

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