Obamacare: Obama just straight up lied to you, in your face (5 Viewers)

[matttyl]

I would make the argument that he lost his compliant coverage. He was told his son was eligible for Medicaid, not allowing him to enroll in his plan. Now that he doesn't have that coverage he is newly eligible. I could also make the case that Brew is eligible for premium tax credits since his son coming back on his plan, due to no fault of his, means he would get a greater subsidy. Finally, I could also make the case that this falls under the exceptional circumstances provision.

In any event I'm not sure why Blue Cross would tell him he has to wait 3 months. That doesn't fit any part of the law that I'm aware of.

Fully agree with all of this, and of course if it were my child I'd try anything I could - which I'm sure Brew has. It's just been a huge mess for many people, Brew included.

 

[timschochet]

matttyl it's an eye opening story certainly/ but why is the cost so high? $84,000? Wouldnt mass production of the product bring that cost way down?

 

[SaintsInDome2006]

Local news last night reported double digit increases in LA health insurance premiums for coming year.

 

[matttyl]

matttyl it's an eye opening story certainly/ but why is the cost so high? $84,000? Wouldnt mass production of the product bring that cost way down?

You'll have to ask Gilead that question, Tim.

They have no competition, why should they reduce their prices? They have (I believe) the only FDA approved drug for the treatment and possibly cure of hep. C. In general, state Medicaid programs and private insurance are required to cover FDA approved treatments regardless of price unless similar options are available, which they aren't currently. Gilead has the "monopoly" on the situation. If insurance companies are capped in what they can make (the 80/20 rule in the individual market or 85/15 rule in the group market), why not the Rx companies?

They have at least attempted to justify the cost, saying that research and development is extremely expensive - much of which goes to drugs that are never made or then never approved by the FDA. They have likely spent hundreds of millions in R&D costs (if not billions) to manufacture one drug that works and that the FDA approved. They'd like to recoup their losses and actually turn a profit. They also claim that the drug will prevent liver transplants in hep C patients, which can easily cost 7x as much as the drug.

You decide.....

EDIT TO ADD - Tim, just within the past few days the FDA approved another drug from Gilead - Zydelig. It's used for 3 different types of blood cancers - forms of chronic lymphocytic leukemia, non-Hodgkin lymphoma and small lymphocytic lymphoma. Apparently it's used in combination with another drug (Rituxan), and has shown decent enough results to get the nod from the FDA. It's cost - $7,200 a month for just Zydelig, I don't know how much more Rituxan will add. I also don't know how long you're suppose to be on it - if it's a treatment or a "cure", do you need to be on it for 12 weeks like the hep C drug, or for 12 months, or ongoing. Since it's cost is listed "per month", I think we can assume you'd be on it for quite a while. A full year of it alone, not counting the other drug, would be $86,400 - just a bit higher than the hep C drug would be. If insurance is to cover that, wouldn't it have to go up?

For reference, my uncle has Leukemia and has dealt with it for years now, and the recent news of this drug getting approved is wonderful for my family. I'm thrilled that he now has a possible other treatment for his ailment (haven't talked to him yet to see if it's actually an option for him specifically), but I'm also a realist and know that this is a huge cost to this new option.

 

[matttyl]

Local news last night reported double digit increases in LA health insurance premiums for coming year.

From the reports I've seen, more states are requesting "double digit increases" than aren't. That's the average increase for all carriers as well, not just one or two carriers in a state.

 

[StrikeS2k]

For those of you who have been #####ing that even before the ACA premiums went up because those "greedy insurance companies" just wanted to make more money, I present to you the case of the hepatitis C drug "Sovaldi". Apparently this is quite literally a "breakthrough drug" for the treatment for the condition which affects about 3.2 million Americans. All great news, right?

The hitch - it costs $84,000 for a 12 week course of treatment. If you have hep. C, you're damn sure going to either purchase either a health policy which covers it or (if your income allows it) enroll into Medicaid and have them pay for it. You do the math on that one - 84,000 times the 3.2m Americans faced with it - yup, $268 billion. That's over a quarter trillion for one specific drug.

There is an article on the front page of the Washington Post about the drug, and Medicaid in Oregon. They are expecting to have to spend $360m to provide the drug to their Medicaid beneficiaries (so just those on Medicaid, not those with private insurance). Just last year, though, the entire program only spent $377m total on all drugs. So to limit costs, they are attempting to limit who has access to the drug.

For reference, the drug company recorded $2.3B in sales of the drug over just the first 3 months of this year, making it the biggest launch for a drug in history. Just two days ago, Gilead (the manufacturer) reported second quarter sales totaling $3.5B. If it's the insurance companies purchasing this drug for their insureds, and they are attempting to turn at least a bit of profit, they need to compensate by upping their rates. After all, no person can be out of pocket more than $6,350 a year for all of their medical expenses on a new ACA plan.....so where is the other ~80k per recipient for this drug coming from?

Sorry for my Friday morning rant......but I just wish people would look at the bigger picture of "increasing medical costs" sometimes, and not just blame the insurance companies.

I'm sorry but anyone blaming the insurance companies is an idiot. Their profit margins are well documented and come in far below those of other industries.

Tim - While the cost may be extremely high, reasons it might be are:

1) Limited number of customers.

2) They have to recoup the R&D for this drug, plus other failed drugs. Any successful drug is subsidizing the research for numerous others that never make it to market.

 

[fourd]

Local news last night reported double digit increases in LA health insurance premiums for coming year.

From the reports I've seen, more states are requesting "double digit increases" than aren't. That's the average increase for all carriers as well, not just one or two carriers in a state.

Would anyone like to venture a guess as to what the increases would be without the government covering excess claims through the various programs currently in place?

 

[BassNBrew]

Local news last night reported double digit increases in LA health insurance premiums for coming year.

From the reports I've seen, more states are requesting "double digit increases" than aren't. That's the average increase for all carriers as well, not just one or two carriers in a state.

Would anyone like to venture a guess as to what the increases would be without the government covering excess claims through the various programs currently in place?

Did you know that visits with a nutritionist are now covered at 100%, no co-pay?

 

[matttyl]

Local news last night reported double digit increases in LA health insurance premiums for coming year.

From the reports I've seen, more states are requesting "double digit increases" than aren't. That's the average increase for all carriers as well, not just one or two carriers in a state.

Would anyone like to venture a guess as to what the increases would be without the government covering excess claims through the various programs currently in place?

hahaha. I'm wondering if the currently requested increases are net of those or not. Do carriers know how much they are going to get from that pie already?

 

[SaintsInDome2006]

Local news last night reported double digit increases in LA health insurance premiums for coming year.

From the reports I've seen, more states are requesting "double digit increases" than aren't. That's the average increase for all carriers as well, not just one or two carriers in a state.

In the report the insurance commissioner and the interviewed expert stated that the increases were partly due to the risk pool being out of whack, what with more old and unhealthy people etc. than originally calculated. It's been plenty covered here but here it is coming to fruition.

 

[Sand]

They have at least attempted to justify the cost, saying that research and development is extremely expensive - much of which goes to drugs that are never made or then never approved by the FDA. They have likely spent hundreds of millions in R&D costs (if not billions) to manufacture one drug that works and that the FDA approved. They'd like to recoup their losses and actually turn a profit. They also claim that the drug will prevent liver transplants in hep C patients, which can easily cost 7x as much as the drug.

You decide.....

This is largely how they justify their costs. Calculate the amount spent on treatments for Hep C when it starts to get really bad and price the drug accordingly. Taking into account R&D costs, as well, to make sure that the profit covers that.

If we want to reduce the cost of these drugs we need to change the way drugs are approved. This means more risk in a final drug formulation. Which means that we need tort reform to cover for when reduced testing doesn't turn up side effects. As a result it will never happen as that particular entrenched interest pretty much owns the Democrat party.

 

[Sarnoff]

matttyl it's an eye opening story certainly/ but why is the cost so high? $84,000? Wouldnt mass production of the product bring that cost way down?

You really don't know anything, do you?

Why would mass production help? At all?

Don't you even think before you post???

The cost of the drug is not in physically producing it from raw materials.

The pills probably cost 50 cents to make. It's just that the first one cost 8 billion dollars to make.

Divide the cost of R&D by the potential number of users, and there's the cost.

Mass production

 

[Stinger Ray]

matttyl it's an eye opening story certainly/ but why is the cost so high? $84,000? Wouldnt mass production of the product bring that cost way down?

You really don't know anything, do you?

Why would mass production help? At all?

Don't you even think before you post???

The cost of the drug is not in physically producing it from raw materials.

The pills probably cost 50 cents to make. It's just that the first one cost 8 billion dollars to make.

Divide the cost of R&D by the potential number of users, and there's the cost.

Mass production

 

[matttyl]

matttyl it's an eye opening story certainly/ but why is the cost so high? $84,000? Wouldnt mass production of the product bring that cost way down?

You really don't know anything, do you?

Why would mass production help? At all?

Don't you even think before you post???

The cost of the drug is not in physically producing it from raw materials.

The pills probably cost 50 cents to make. It's just that the first one cost 8 billion dollars to make.

Divide the cost of R&D by the potential number of users, and there's the cost.

Mass production

The first one cost much more than that, Sarnoff. In 2011 Gilead purchased Pharmasset for $10.4B. That was just to buy all the R&D that had been done by that company up to that point - most of which was in hep. C. There was also all the cost of the hep C drugs they were working on themselves, and then all the combined R&D from the joined companies for the next 3 years before actually getting the drug to market and it's approval.

It's worth noting that they have had 3 other hep C drugs terminated from production as they never got through all the phases of FDA approval, and they currently have 6 other hep C drugs in the "pipeline" of the testing phase. Each one of those drugs had a huge cost of it's own, and it's possible that not a single one of them will return a single dollar to the company. Each of those losses also needs to be made up for in the gains of this new drug that did get approved.

Gilead hit the NASDAQ in 1992, so it's now 22 years old. They have a grand total of 16 drugs on the market - 2 of which have had their patent expire, 6 more of which will have their patents expire in the next 4 years. I wonder how many drugs they attempted to produce and spent huge R&D money on, to end up with a grand total of 16 hitting the market?

 

[Sarnoff]

matttyl it's an eye opening story certainly/ but why is the cost so high? $84,000? Wouldnt mass production of the product bring that cost way down?

You really don't know anything, do you?

Why would mass production help? At all?

Don't you even think before you post???

The cost of the drug is not in physically producing it from raw materials.

The pills probably cost 50 cents to make. It's just that the first one cost 8 billion dollars to make.

Divide the cost of R&D by the potential number of users, and there's the cost.

Mass production

The first one cost much more than that, Sarnoff. In 2011 Gilead purchased Pharmasset for $10.4B. That was just to buy all the R&D that had been done by that company up to that point - most of which was in hep. C. There was also all the cost of the hep C drugs they were working on themselves, and then all the combined R&D from the joined companies for the next 3 years before actually getting the drug to market and it's approval.

It's worth noting that they have had 3 other hep C drugs terminated from production as they never got through all the phases of FDA approval, and they currently have 6 other hep C drugs in the "pipeline" of the testing phase. Each one of those drugs had a huge cost of it's own, and it's possible that not a single one of them will return a single dollar to the company. Each of those losses also needs to be made up for in the gains of this new drug that did get approved.

Gilead hit the NASDAQ in 1992, so it's now 22 years old. They have a grand total of 16 drugs on the market - 2 of which have had their patent expire, 6 more of which will have their patents expire in the next 4 years. I wonder how many drugs they attempted to produce and spent huge R&D money on, to end up with a grand total of 16 hitting the market?

Oh, I'm sure the cost is much more. All the R&D, not just for this one drug but everything that came before or anything else in the pipeline it supplants has to be accounted for. Plus something for the shareholders, because a little profit is not evil.

I just pulled the number out of thin air, remembering an old episode* of The West Wing, to make a point. "Mass production" is a downright stupid response to the cost. It shows a fundamental lack of understanding of the entire concept. I can't believe anyone would even suggest such at thing. It's completely asinine.

Unless, maybe, Timmy is suggesting that the government forcibly infect people with Hep C to broaden the user base, therefore bringing the cost per user down. That's TimLogic I can believe in.

*"In This White House", season 2, episode 4:

Spoiler

CUT TO: INT. HALLWAY - DAY

Toby pushes through a door, carrying a drink with a wrapped-up danish on top of it.

Josh follows behind him, eating a banana.

JOSH

You're listening to me, but you're not understanding me.

TOBY

No, I'm disagreeing with you. That doesn't mean I'm not listening to you, or

understanding what you're saying. I'm doing all three at the same time.

JOSH

You gotta get out of their face, Toby, they can get up any time they want. We

don't have anything they need. [tosses his banana skin in a trash can as they walk past]

TOBY

They need patent treaties to be enforced.

JOSH

And they are gonna be enforced. The pharmaceutical companies got half the

House of Representatives elected. Congress is gonna get serious about this.

TOBY

The pills cost 'em four cents a unit to make.

JOSH

You know that's not true. The second pill cost 'em four cents; the first

pill cost 'em four hundred million dollars.

 

[matttyl]

So what does it mean when an ACA architect and proponent believes the subsidies would only be available through a state exchange?

http://www.forbes.com/sites/theapothecary/2014/07/25/obamacare-architect-agreed-with-gop-exchange-subsidies-can-only-flow-through-state-exchanges/?partner=yahootix

I suppose one could argue that he was saying that as part of his sales pitch, looking to get consulting gigs in each state. Then again...

Wow, that's extremely damming evidence for the Administration.

 

[humpback]

matttyl it's an eye opening story certainly/ but why is the cost so high? $84,000? Wouldnt mass production of the product bring that cost way down?

You really don't know anything, do you?

Why would mass production help? At all?

Don't you even think before you post???

The cost of the drug is not in physically producing it from raw materials.

The pills probably cost 50 cents to make. It's just that the first one cost 8 billion dollars to make.

Divide the cost of R&D by the potential number of users, and there's the cost.

Mass production

We should let the illegals produce it at sub-minimum wage.

 

[SaintsInDome2006]

So what does it mean when an ACA architect and proponent believes the subsidies would only be available through a state exchange?

http://www.forbes.com/sites/theapothecary/2014/07/25/obamacare-architect-agreed-with-gop-exchange-subsidies-can-only-flow-through-state-exchanges/?partner=yahootix

I suppose one could argue that he was saying that as part of his sales pitch, looking to get consulting gigs in each state. Then again...

Wow, that's extremely damming evidence for the Administration.

In his remarks, Gruber urged state governments to set up their own health insurance exchanges. A member of the audience asked: “It’s my understanding that if states don’t provide [exchanges], then the federal government will provide them for the states.”

Gruber responded: “What’s important to remember politically about [Obamacare] is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.” (Emphasis added.)

"They want to squeeze the states to do it." That makes absolute and total sense to me.

BFS and I posted round and around on this. That argument makes total sense. It was done this way in the Senate Finance committee so that 1. Yellow Dog Senators could say they prevented a federal single exchange and 2. so that states would be incentivized to participate.

This seems really clear to me.

 

[matttyl]

No one knows how this thing is supposed to work, I guess: Obama unilaterally repeals Obamacare from the US territories

Looking for a place where Obamacare doesn't exist? Try moving to the U.S. Territories, where the Obama administration just provided a pretty big waiver from the law's major coverage provisions.

The Affordable Care Act's design dealt a pretty big problem to the territories. It required insurers there to comply with the law's major market reforms — guaranteed coverage, mandated benefits, limits on profits, etc. — without requiring residents to get coverage or providing subsidies to help them afford coverage. The territories — Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam and the Northern Mariana Islands — have been warning for years that would destroy their insurance markets. The individual mandate and the subsidies are the major ways the ACA tries to bring healthy people into the individual insurance market to balance out sick patients who can no longer be denied coverage.

That was until Wednesday, when the Obama administration told the territories that the coverage requirements actually don't apply to them. The exemption was posted on a Health and Human Services Web site on Thursday.

It's an apparent reversal from last July, when a HHS official told the territories there was nothing HHS could do to help them out.

"However meritorious your request might be, HHS is not authorized to choose which provisions...might apply to the territories," wrote Gary Cohen last year. He was then the head of the HHS office overseeing the ACA's insurance market reforms and left the department earlier this year.

What sparked the latest change? The definition of "state" in the Public Health Service Act indicates that the ACA market rules don't apply to the territories, HHS wrote. The department said group health plans in the territories must still comply with other requirements in the law, like the ban on lifetime and annual limits, a ban on rescission and a coverage of preventive benefits (which includes contraception coverage).

A spokesman for the Centers for Medicare and Medicaid Services, which is overseeing ACA implementation, said the agency recognized that the territories’ insurers saw a greater share of sicker patients as a result of the way the law had been implemented there.


“The Department is committed to working with states and the U.S. territories in order to implement the health care law in a way that maximizes coverage options for consumers," the spokesman said. "As such, we are providing additional flexibility to the territories in order to implement the law in a way that recognizes their unique situations.”

OMG - are you kidding me?

[SIZE=14.5pt]We have been informed by representatives of the territories that this interpretation is undermining the stability of the territories' health insurance markets. [/SIZE]

That's from the HHS.

http://www.cms.gov/CCIIO/Resources/Letters/Downloads/letter-to-Francis.pdf

You want to see an insurance market implode within a year....watch what happens here.....

 

[timschochet]

First off I asked a question; I was not making an argument. There seem to be a couple of people here eager to laugh at my lack of knowledge. That doesn't bother me. I'm always willing to learn something new.

But I don't think my question was stupid. No matter how many billions it costs a company to produce that first pill, the price is not going to stay at $84,000. Obviously it has to come way down from there, or there is no profit to be made. Honestly I was hoping someone with knowledge of the drug industry could answer how this process works. On the other hand if you simply want to mock me for my ignorance, go right ahead; I'm sure that's entertaining too.

 

[timschochet]

Well that was interesting. I just had a follow up appointment with my doctor (I have high blood pressure, but the new medicine seems to be working.) at the end of our visit I asked him about the question I asked here. He told me that the initial price was based on R&D of course, but that it would come way down: in part because of government involvement, and in part because of "MASS PRODUCTION"- his words! What an idiot my doctor must be, right Sarnoff?

 

[StrikeS2k]

First off I asked a question; I was not making an argument. There seem to be a couple of people here eager to laugh at my lack of knowledge. That doesn't bother me. I'm always willing to learn something new.

But I don't think my question was stupid. No matter how many billions it costs a company to produce that first pill, the price is not going to stay at $84,000. Obviously it has to come way down from there, or there is no profit to be made. Honestly I was hoping someone with knowledge of the drug industry could answer how this process works. On the other hand if you simply want to mock me for my ignorance, go right ahead; I'm sure that's entertaining too.

This is a valid question/discussion. I don't know how the procession of price cuts work with drugs. I suspect it has to do with whether there's competition for the drug (Cialis vs. Viagra comes to mind based on the commercials I see). But that's not the question you asked. You asked why does it cost 84k. That's asking about present pricing and not possible future pricing. That's probably why you're being joked with.

 

[matttyl]

First off I asked a question; I was not making an argument. There seem to be a couple of people here eager to laugh at my lack of knowledge. That doesn't bother me. I'm always willing to learn something new.

But I don't think my question was stupid. No matter how many billions it costs a company to produce that first pill, the price is not going to stay at $84,000. Obviously it has to come way down from there, or there is no profit to be made. Honestly I was hoping someone with knowledge of the drug industry could answer how this process works. On the other hand if you simply want to mock me for my ignorance, go right ahead; I'm sure that's entertaining too.

Tim, did you even read what I posted? They made $2.3b in sales of this drug alone in the first 3 months it was on the market. They reported 2nd quarter sales of $3.5b.

You don't need to know much about the drug industry, you just need to know about basic economics.

Suppose all drinking water in the world is gone overnight. Suppose you are the only bottler of drinking water the next morning. Sure, you can do the "right thing" and give it away, or you could realize you literally have the monopoly on a life saving product and make all the money you can. This company is choosing the later route.

And what do you mean "there is no profit to be made" if they don't lower the cost? This was the largest launch of a drug in the history of mankind. $2.3B sold in 3 months. The insurance company (or Medicaid) is "generally" required to purchase the FDA approved drug, regardless of cost, if there is no alternative on the market - which in the case of this drug there isn't.

 

[humpback]

Well that was interesting. I just had a follow up appointment with my doctor (I have high blood pressure, but the new medicine seems to be working.) at the end of our visit I asked him about the question I asked here. He told me that the initial price was based on R&D of course, but that it would come way down: in part because of government involvement, and in part because of "MASS PRODUCTION"- his words! What an idiot my doctor must be, right Sarnoff?

 

[timschochet]

First off I asked a question; I was not making an argument. There seem to be a couple of people here eager to laugh at my lack of knowledge. That doesn't bother me. I'm always willing to learn something new.

But I don't think my question was stupid. No matter how many billions it costs a company to produce that first pill, the price is not going to stay at $84,000. Obviously it has to come way down from there, or there is no profit to be made. Honestly I was hoping someone with knowledge of the drug industry could answer how this process works. On the other hand if you simply want to mock me for my ignorance, go right ahead; I'm sure that's entertaining too.

Tim, did you even read what I posted? They made $2.3b in sales of this drug alone in the first 3 months it was on the market. They reported 2nd quarter sales of $3.5b.You don't need to know much about the drug industry, you just need to know about basic economics.

Suppose all drinking water in the world is gone overnight. Suppose you are the only bottler of drinking water the next morning. Sure, you can do the "right thing" and give it away, or you could realize you literally have the monopoly on a life saving product and make all the money you can. This company is choosing the later route.

And what do you mean "there is no profit to be made" if they don't lower the cost? This was the largest launch of a drug in the history of mankind. $2.3B sold in 3 months. The insurance company (or Medicaid) is "generally" required to purchase the FDA approved drug, regardless of cost, if there is no alternative on the market - which in the case of this drug there isn't.

No I get that. I shouldn't have written no profit. But it seems like long term auchincloss larger profit will be made once the pill becomes affordable. And it sounds like it will.

 

[timschochet]

First off I asked a question; I was not making an argument. There seem to be a couple of people here eager to laugh at my lack of knowledge. That doesn't bother me. I'm always willing to learn something new.

But I don't think my question was stupid. No matter how many billions it costs a company to produce that first pill, the price is not going to stay at $84,000. Obviously it has to come way down from there, or there is no profit to be made. Honestly I was hoping someone with knowledge of the drug industry could answer how this process works. On the other hand if you simply want to mock me for my ignorance, go right ahead; I'm sure that's entertaining too.

This is a valid question/discussion. I don't know how the procession of price cuts work with drugs. I suspect it has to do with whether there's competition for the drug (Cialis vs. Viagra comes to mind based on the commercials I see). But that's not the question you asked. You asked why does it cost 84k. That's asking about present pricing and not possible future pricing. That's probably why you're being joked with.

The whole point of my question was that I didn't think the price would stay so high. But I don't know the process of how it comes down. Some of you have some ideas about that and my doctor did as well. All of this is very informative to me.

 

[Sarnoff]

Well that was interesting. I just had a follow up appointment with my doctor (I have high blood pressure, but the new medicine seems to be working.) at the end of our visit I asked him about the question I asked here. He told me that the initial price was based on R&D of course, but that it would come way down: in part because of government involvement, and in part because of "MASS PRODUCTION"- his words! What an idiot my doctor must be, right Sarnoff?

I assume anyone within 50 yards of you loses 20 IQ points because of it.

 

[jonessed]

Well that was interesting. I just had a follow up appointment with my doctor (I have high blood pressure, but the new medicine seems to be working.) at the end of our visit I asked him about the question I asked here. He told me that the initial price was based on R&D of course, but that it would come way down: in part because of government involvement, and in part because of "MASS PRODUCTION"- his words! What an idiot my doctor must be, right Sarnoff?

Mass usage maybe, but not mass production. The cost isn't in the production. Isn't that obvious?

Why are you being so obtuse about this?

 

[timschochet]

Well that was interesting. I just had a follow up appointment with my doctor (I have high blood pressure, but the new medicine seems to be working.) at the end of our visit I asked him about the question I asked here. He told me that the initial price was based on R&D of course, but that it would come way down: in part because of government involvement, and in part because of "MASS PRODUCTION"- his words! What an idiot my doctor must be, right Sarnoff?

Mass usage maybe, but not mass production. The cost isn't in the production. Isn't that obvious?Why are you being so obtuse about this?

Well that was the phrase he used. But I'm not trying to be obtuse about it. I just reacted to being called an idiot for even raising the question.

 

[matttyl]

First off I asked a question; I was not making an argument. There seem to be a couple of people here eager to laugh at my lack of knowledge. That doesn't bother me. I'm always willing to learn something new.

But I don't think my question was stupid. No matter how many billions it costs a company to produce that first pill, the price is not going to stay at $84,000. Obviously it has to come way down from there, or there is no profit to be made. Honestly I was hoping someone with knowledge of the drug industry could answer how this process works. On the other hand if you simply want to mock me for my ignorance, go right ahead; I'm sure that's entertaining too.

Tim, did you even read what I posted? They made $2.3b in sales of this drug alone in the first 3 months it was on the market. They reported 2nd quarter sales of $3.5b.You don't need to know much about the drug industry, you just need to know about basic economics.

Suppose all drinking water in the world is gone overnight. Suppose you are the only bottler of drinking water the next morning. Sure, you can do the "right thing" and give it away, or you could realize you literally have the monopoly on a life saving product and make all the money you can. This company is choosing the later route.

And what do you mean "there is no profit to be made" if they don't lower the cost? This was the largest launch of a drug in the history of mankind. $2.3B sold in 3 months. The insurance company (or Medicaid) is "generally" required to purchase the FDA approved drug, regardless of cost, if there is no alternative on the market - which in the case of this drug there isn't.

No I get that. I shouldn't have written no profit. But it seems like long term auchincloss larger profit will be made once the pill becomes affordable. And it sounds like it will.

Affordable to who, the end consumer? It already is, cause the middle man (the insurance company or Medicaid) is the one buying it. As long as the end consumer has the coverage which covers this drug - which in general it's mandated to, it's affordable for the end consumer no matter what the cost is. This just means that the insurance company is going to have to jack up their rates to compensate - which will then cause the public to vilify them....not the pharmaceutical company for wanting go (justifiably) make it's money.

Tim - the ACA mandates that the highest maximum out of pocket for an individual plan per year is $6,350, right? So an individual's worse case scenario in terms of $ is 12 months of premium and another $6,350 of claims. Assuming the monthly premium is $400, then all that totals $11,150 per calendar year. What does it matter to the end consumer if the cost of the drug is $8,400, $84,000 or $840,000 - he's still going to be out the same amount of money at the end of the year. So, they could cut the price of the drug by 90% - it really makes no difference to the end consumer.

 

[timschochet]

Anyhow, matttyl let's get back to your original point: big pharma company spends billions on a new drug. Makes billions on the new drug. Eventually the price comes way down. Why? Because, according to my doctor, a combo of mass usage (to be precise) and government involvement. Or perhaps there are other reasons. But in any case the price WILL come down.

How does Obamacare play into this for good or ill? I'm not quite getting that.

 

[SaintsInDome2006]

Anyhow, matttyl let's get back to your original point: big pharma company spends billions on a new drug. Makes billions on the new drug. Eventually the price comes way down. Why? Because, according to my doctor, a combo of mass usage (to be precise) and government involvement. Or perhaps there are other reasons. But in any case the price WILL come down.

How does Obamacare play into this for good or ill? I'm not quite getting that.

Wait - aren't you forgetting the whole deal that Obama cut with Big Pharma to get the ACA "passed"???

Obama Was Pushed by Drug Industry, E-Mails SuggestWASHINGTON — After weeks of talks, drug industry lobbyists were growing nervous. To cut a deal with the White House on overhauling health care, they needed to be sure that President Obama would stop a proposal intended to bring down medicine prices.

On June 3, 2009, one of the lobbyists e-mailed Nancy-Ann DeParle, the president’s health care adviser. Ms. DeParle reassured the lobbyist. Although Mr. Obama was overseas, she wrote, she and other top officials had “made decision, based on how constructive you guys have been, to oppose importation” on a different proposal.

Just like that, Mr. Obama’s staff signaled a willingness to put aside support for the reimportation of prescription medicines at lower prices and by doing so solidified a compact with an industry the president had vilified on the campaign trail. Central to Mr. Obama’s drive to remake the nation’s health care system was an unlikely collaboration with the pharmaceutical industry that forced unappealing trade-offs.

The e-mail exchange three years ago was among a cache of messages obtained from the industry and released in recent weeks by House Republicans — including a new batch put out Friday detailing the industry’s advertising campaign supporting Mr. Obama’s health care overhaul. The broad contours of his dealings with the industry were known in 2009, but the newly public e-mails open a window into the compromises underlying a health care law now awaiting the judgment of the Supreme Court.

Mr. Obama’s deal-making in 2009 represented a pivotal moment in his young presidency, a juncture where the heady idealism of the campaign trail collided with the messy reality of Washington policy making. A president who had promised to negotiate on C-Span cut a closed-door deal with a powerful lobby, signifying to disillusioned liberal supporters a loss of innocence, or perhaps even the triumph of cynicism.

But the bargain was one that the president deemed necessary to forestall industry opposition that had thwarted efforts to cover the uninsured for generations. Without the deal, in which the industry agreed to provide $80 billion to expand coverage in exchange for protection from policies that would cost more, Mr. Obama calculated he might get nowhere.

“Throughout his campaign, President Obama was clear that he would bring every stakeholder to the table in order to pass health reform, even longtime opponents like the pharmaceutical industry,” Dan Pfeiffer, the White House communications director, said Friday. “He understood correctly that the unwillingness to work with people on both sides of the issue was one of the reasons why it took a century to pass health reform.”

Republicans see the deal as hypocritical. “He said it was going to be the most open and honest and transparent administration ever and lobbyists won’t be drafting the bills,” said Representative Michael C. Burgess of Texas, a Republican on the House Energy and Commerce Committee examining the deal. “Then when it came time, the door closed, the lobbyists came in and the bills were written.”

Some liberals bothered by the deal in 2009 now find the Republican criticism hard to take given the party’s longstanding ties to the industry.

“Republicans trumpeting these e-mails is like a fox complaining someone else raided the chicken coop,” said Robert Reich, who was labor secretary under President Bill Clinton. “Sad to say, it’s called politics in an era when big corporations have an effective veto over major legislation affecting them and when the G.O.P. is usually the beneficiary.”

In a statement, the Pharmaceutical Research and Manufacturers of America, the drug industry lobby known as PhRMA, called its interactions with the White House part of its mission to “ensure patient access” to high-quality medicine: “Before, during and since the health care debate, PhRMA engaged with Congress and the administration to advance these priorities,” the lobby statement said.

If the negotiations resembled deal-making by past presidents, what distinguished them was that Mr. Obama had strongly rejected business as usual. During his campaign, he singled out the power of the pharmaceutical industry and its chief lobbyist, former Representative Billy Tauzin, a Democrat-turned-Republican from Louisiana.

“The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies,” Mr. Obama said in a campaign advertisement, referring to 2003 legislation. “And you know what? The chairman of the committee who pushed the law through went to work for the pharmaceutical industry making $2 million a year.”

Mr. Obama continued: “That’s an example of the same old game playing in Washington. You know, I don’t want to learn how to play the game better. I want to put an end to the game playing.”

The e-mails document tumultuous negotiations, at certain times transactional, at others prickly. Each side suspected the other of operating in bad faith. Led by Rahm Emanuel, Mr. Obama’s chief of staff at the time, and Jim Messina, his deputy, the White House appeared deeply involved, and not averse to pressure tactics.

In May, the White House was upset industry had not signed on to a joint statement. One industry official urged colleagues to sign: “Rahm is already furious. The ire will be turned on us.” By June, tension flared again. “Barack Obama is going to announce in his Saturday radio address support for rebating all of D unless we come to a deal,” wrote Bryant Hall, a PhRMA lobbyist, referring to a Medicare Part D change that would cost the industry.

A public confrontation was averted and an agreement announced, negotiated down to $80 billion from $100 billion. “We got a good deal,” Mr. Hall wrote.

The White House thought it did, too, and defended it against Democrats in Congress. “WH is working on some very explicit language on importation to kill it in health care reform,” Mr. Hall wrote in September.

Mr. Emanuel, now mayor of Chicago; Mr. Messina, now the president’s campaign manager; Ms. DeParle, now deputy White House chief of staff; and Mr. Bryant, now heading his own firm, all declined to comment.

The e-mails released Friday also underscored detailed discussions about an advertising campaign supporting Mr. Obama’s health overhaul. “They plan to hit up the ‘bad guys’ for most of the $,” a union official wrote after an April meeting. “They want us to just put in enough to be able to put our names in it — he is thinking @100K.” In July, Mr. Hall wrote, “Rahm asked for Harry and Louise ads thru third party,” referring to the characters the industry had used to defeat Mr. Clinton’s health care proposal 15 years earlier.

Industry and Democratic officials said advertising was an outgrowth of the deal, not its goal. The industry traditionally advertises for legislation it supports.

In the end, balky House Democrats imposed additional conditions on the industry that pushed the cost above $100 billion, but the more sweeping policies it feared remained out of the legislation. Mr. Obama signed it in March 2010. He had the victory he wanted.

http://www.nytimes.com/2012/06/09/us/politics/e-mails-reveal-extent-of-obamas-deal-with-industry-on-health-care.html?pagewanted=all&_r=0

Btw one of the big winners in that advertising deal was an advertising firm owned by David Axelrod's brother. Pretty much a Chicago style pay to play operation there.

 

[timschochet]

Thanks Saints. Can you or anyone explain, in simple terms, how that agreement affects new drugs like this one, and drugs in the future?

 

[SaintsInDome2006]

Thanks Saints. Can you or anyone explain, in simple terms, how that agreement affects new drugs like this one, and drugs in the future?

Aside from the fact that Big Pharma got let off the hook for a big assessment levied under Bush...

Obama agreed to block language in the ACA that would have ensured lower drug prices via re-importation and regulation.

David Axelrod got a $100 million advertising contract and Pharma agreed to spend $80 billion on additional coverage, which was a big, big future savings for them.

 

[matttyl]

Anyhow, matttyl let's get back to your original point: big pharma company spends billions on a new drug. Makes billions on the new drug. Eventually the price comes way down. Why? Because, according to my doctor, a combo of mass usage (to be precise) and government involvement. Or perhaps there are other reasons. But in any case the price WILL come down.

How does Obamacare play into this for good or ill? I'm not quite getting that.

Tim, while I have no doubt that the price of the drug will eventually come down, it is currently an astronomical price and even if it were reduced by half would still be astronomical.

Take HIV medications for instance. They first hit the market in 1996 (Dallas Buyer's Club, anyone?). They were crazy expensive at the time. Here's what some of the drugs, as well as new HIV drugs now cost, per month. I don't know much about these drugs, but I do know that many people require a "cocktail" of many of these drugs at the same time, some of which on that list are still over a thousand a month each. This is nearly 20 years later and the costs are still astronomical.

I brought up the case of this new hep C drug specifically because it's in the news because of it's cost. If insurance is required to pay for these new insanely expensive drugs that didn't exist last year, then it stands to reason that they will have to increase their prices as well. The article in the Post today said that Oregon Medicaid is expecting to spend roughly as much on this one drug this year as they did on all pharmaceuticals last year. When you say that anyone can now obtain coverage regardless if they have hep C or not, when previously insurance carriers could exclude them (setting aside HIPAA and other rules/laws) costs are sure to skyrocket. As more expensive drugs hit the market and people continue to be guaranteed coverage each year regardless of their health, this trend will continue.

I also brought this up as an example of exactly why insurance premiums have been going up, and will continue to go up (no matter if the ACA were here or not). Health insurance covers more and more things as more and more procedures (organ transplants for instance) and drugs (like this one and the leukemia drug I also mentioned) are approved by the FDA. You can't simply blame the "greedy insurance companies" for this, they are simply reacting to the market.

Part of this is a moral dilemma, maybe - I'm not quite sure. As I'm sure you know, hep C is most often transmitted via needle drug use. So you could have someone who's been extremely irresponsible and never had health coverage and has been using intravenous drugs for the past decade and contracted hep C - who now can get guaranteed issue (and possibly subsidized) health insurance that provides them access to this $84k drug - which the insurance company is required to pay for. That not only raises my taxes so that he can obtain the coverage (either via subsidized individual medical insurance or Medicaid) it raises my medical insurance premiums when the carrier has to offset their loss. Why should I be hit, twice, for his poor life decisions - and moreover why should he now get a total get out of jail free card?

 

[Sarnoff]

What we need are death panels

 

[matttyl]

What we need are death panels

I'm not saying that, either. It's not an easy question to answer. But if somehow either me or a loved one had hep C, and the prognosis isn't a good one, I'm going to do anything in my power to get my hands on $84,000 to get the drug. If that just means buying an insurance policy for a few hundred a month that covers the drug, so be it. Let everyone else pay for it instead.

 

[jamny]

Thanks Saints. Can you or anyone explain, in simple terms, how that agreement affects new drugs like this one, and drugs in the future?

Aside from the fact that Big Pharma got let off the hook for a big assessment levied under Bush...

??

 

[timschochet]

As always, matttyl you raise fine issues. But I have to point out that your moral dilemma is at least as old as Medicare, which is a 50 year program at this point. Under Medicare, you can have people who retire after years of living healthy, eating right, and exercising, and other people retire after years of living like crap. And the healthy ones have to pay for the unhealthy ones. Under your premise, that's immoral, and it's hard to argue the point, except to say that it's the price we choose to pay to have Medicare.

It seems to me it's the same thing here. Whether its Obamacare (the specifics of which I disapproved of) or whether it's some other form of government involvement, we as a society have chosen that we're going to collectively help those of us who can't afford medical care to obtain it- and that means inequity. That means that there will be those who screw up and we're going to have to pay for them. That means some sort of transfer of wealth. But it's the price we have chosen to pay. Personally, at least in theory, I'm willing to pay that price in order to make sure that there's no one out there in this country that can't get health care.

 

[timschochet]

Thanks Saints. Can you or anyone explain, in simple terms, how that agreement affects new drugs like this one, and drugs in the future?

Aside from the fact that Big Pharma got let off the hook for a big assessment levied under Bush...

Obama agreed to block language in the ACA that would have ensured lower drug prices via re-importation and regulation.

David Axelrod got a $100 million advertising contract and Pharma agreed to spend $80 billion on additional coverage, which was a big, big future savings for them.

I understand this, but I'm still not sure how it impacts new drugs.

 

[timschochet]

matttyl as to your more specific, non-moral concerns: I suspect that everything you described is temporary, and that the drug price will drop to affordable terms. 50% of $84,000 is NOT affordable. It will drop, and the large rate hikes you fear will not happen long term.

That's my expectation, though don't ask me how much or even how this works because I have no idea. However, if I'm wrong and the rates do jack up for this sort of reason, the result will be ever MORE controls, much more stringent than Obamacare- ultimately the result will be universal health care.

 

[tommyGunZ]

Anyhow, matttyl let's get back to your original point: big pharma company spends billions on a new drug. Makes billions on the new drug. Eventually the price comes way down. Why? Because, according to my doctor, a combo of mass usage (to be precise) and government involvement. Or perhaps there are other reasons. But in any case the price WILL come down.

How does Obamacare play into this for good or ill? I'm not quite getting that.

Wait - aren't you forgetting the whole deal that Obama cut with Big Pharma to get the ACA "passed"???

Obama Was Pushed by Drug Industry, E-Mails SuggestWASHINGTON — After weeks of talks, drug industry lobbyists were growing nervous. To cut a deal with the White House on overhauling health care, they needed to be sure that President Obama would stop a proposal intended to bring down medicine prices.

On June 3, 2009, one of the lobbyists e-mailed Nancy-Ann DeParle, the president’s health care adviser. Ms. DeParle reassured the lobbyist. Although Mr. Obama was overseas, she wrote, she and other top officials had “made decision, based on how constructive you guys have been, to oppose importation” on a different proposal.

Just like that, Mr. Obama’s staff signaled a willingness to put aside support for the reimportation of prescription medicines at lower prices and by doing so solidified a compact with an industry the president had vilified on the campaign trail. Central to Mr. Obama’s drive to remake the nation’s health care system was an unlikely collaboration with the pharmaceutical industry that forced unappealing trade-offs.

The e-mail exchange three years ago was among a cache of messages obtained from the industry and released in recent weeks by House Republicans — including a new batch put out Friday detailing the industry’s advertising campaign supporting Mr. Obama’s health care overhaul. The broad contours of his dealings with the industry were known in 2009, but the newly public e-mails open a window into the compromises underlying a health care law now awaiting the judgment of the Supreme Court.

Mr. Obama’s deal-making in 2009 represented a pivotal moment in his young presidency, a juncture where the heady idealism of the campaign trail collided with the messy reality of Washington policy making. A president who had promised to negotiate on C-Span cut a closed-door deal with a powerful lobby, signifying to disillusioned liberal supporters a loss of innocence, or perhaps even the triumph of cynicism.

But the bargain was one that the president deemed necessary to forestall industry opposition that had thwarted efforts to cover the uninsured for generations. Without the deal, in which the industry agreed to provide $80 billion to expand coverage in exchange for protection from policies that would cost more, Mr. Obama calculated he might get nowhere.

“Throughout his campaign, President Obama was clear that he would bring every stakeholder to the table in order to pass health reform, even longtime opponents like the pharmaceutical industry,” Dan Pfeiffer, the White House communications director, said Friday. “He understood correctly that the unwillingness to work with people on both sides of the issue was one of the reasons why it took a century to pass health reform.”

Republicans see the deal as hypocritical. “He said it was going to be the most open and honest and transparent administration ever and lobbyists won’t be drafting the bills,” said Representative Michael C. Burgess of Texas, a Republican on the House Energy and Commerce Committee examining the deal. “Then when it came time, the door closed, the lobbyists came in and the bills were written.”

Some liberals bothered by the deal in 2009 now find the Republican criticism hard to take given the party’s longstanding ties to the industry.

“Republicans trumpeting these e-mails is like a fox complaining someone else raided the chicken coop,” said Robert Reich, who was labor secretary under President Bill Clinton. “Sad to say, it’s called politics in an era when big corporations have an effective veto over major legislation affecting them and when the G.O.P. is usually the beneficiary.”

In a statement, the Pharmaceutical Research and Manufacturers of America, the drug industry lobby known as PhRMA, called its interactions with the White House part of its mission to “ensure patient access” to high-quality medicine: “Before, during and since the health care debate, PhRMA engaged with Congress and the administration to advance these priorities,” the lobby statement said.

If the negotiations resembled deal-making by past presidents, what distinguished them was that Mr. Obama had strongly rejected business as usual. During his campaign, he singled out the power of the pharmaceutical industry and its chief lobbyist, former Representative Billy Tauzin, a Democrat-turned-Republican from Louisiana.

“The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies,” Mr. Obama said in a campaign advertisement, referring to 2003 legislation. “And you know what? The chairman of the committee who pushed the law through went to work for the pharmaceutical industry making $2 million a year.”

Mr. Obama continued: “That’s an example of the same old game playing in Washington. You know, I don’t want to learn how to play the game better. I want to put an end to the game playing.”

The e-mails document tumultuous negotiations, at certain times transactional, at others prickly. Each side suspected the other of operating in bad faith. Led by Rahm Emanuel, Mr. Obama’s chief of staff at the time, and Jim Messina, his deputy, the White House appeared deeply involved, and not averse to pressure tactics.

In May, the White House was upset industry had not signed on to a joint statement. One industry official urged colleagues to sign: “Rahm is already furious. The ire will be turned on us.” By June, tension flared again. “Barack Obama is going to announce in his Saturday radio address support for rebating all of D unless we come to a deal,” wrote Bryant Hall, a PhRMA lobbyist, referring to a Medicare Part D change that would cost the industry.

A public confrontation was averted and an agreement announced, negotiated down to $80 billion from $100 billion. “We got a good deal,” Mr. Hall wrote.

The White House thought it did, too, and defended it against Democrats in Congress. “WH is working on some very explicit language on importation to kill it in health care reform,” Mr. Hall wrote in September.

Mr. Emanuel, now mayor of Chicago; Mr. Messina, now the president’s campaign manager; Ms. DeParle, now deputy White House chief of staff; and Mr. Bryant, now heading his own firm, all declined to comment.

The e-mails released Friday also underscored detailed discussions about an advertising campaign supporting Mr. Obama’s health overhaul. “They plan to hit up the ‘bad guys’ for most of the $,” a union official wrote after an April meeting. “They want us to just put in enough to be able to put our names in it — he is thinking @100K.” In July, Mr. Hall wrote, “Rahm asked for Harry and Louise ads thru third party,” referring to the characters the industry had used to defeat Mr. Clinton’s health care proposal 15 years earlier.

Industry and Democratic officials said advertising was an outgrowth of the deal, not its goal. The industry traditionally advertises for legislation it supports.

In the end, balky House Democrats imposed additional conditions on the industry that pushed the cost above $100 billion, but the more sweeping policies it feared remained out of the legislation. Mr. Obama signed it in March 2010. He had the victory he wanted.

http://www.nytimes.com/2012/06/09/us/politics/e-mails-reveal-extent-of-obamas-deal-with-industry-on-health-care.html?pagewanted=all&_r=0

Btw one of the big winners in that advertising deal was an advertising firm owned by David Axelrod's brother. Pretty much a Chicago style pay to play operation there.

Why do you put passed in parentheses?

 

[matttyl]

As always, matttyl you raise fine issues. But I have to point out that your moral dilemma is at least as old as Medicare, which is a 50 year program at this point. Under Medicare, you can have people who retire after years of living healthy, eating right, and exercising, and other people retire after years of living like crap. And the healthy ones have to pay for the unhealthy ones. Under your premise, that's immoral, and it's hard to argue the point, except to say that it's the price we choose to pay to have Medicare.

It seems to me it's the same thing here. Whether its Obamacare (the specifics of which I disapproved of) or whether it's some other form of government involvement, we as a society have chosen that we're going to collectively help those of us who can't afford medical care to obtain it- and that means inequity. That means that there will be those who screw up and we're going to have to pay for them. That means some sort of transfer of wealth. But it's the price we have chosen to pay. Personally, at least in theory, I'm willing to pay that price in order to make sure that there's no one out there in this country that can't get health care.

First off I didn't say it's "immoral", I said it may be a moral dilemma. As far as Medicare, you realize that it's costing about $600B this year alone, right?

Specifically on the part I bolded - this hep C drug is 84,000 per person (currently). There are approximately 3.2m in America with it. That's $269B if we'd somehow be able to get it to all those people immediately. Divide that cost by our population, and it comes out to $856 per person, on average. I believe you're in a family of 4, correct? Would you and your family be willing to part with $3,424 right now to insure that everyone (in America) that we think has hep C (many people don't know they have it) is cured of it (to the extent that this drug cures hep C)?

 

[SaintsInDome2006]

Thanks Saints. Can you or anyone explain, in simple terms, how that agreement affects new drugs like this one, and drugs in the future?

Aside from the fact that Big Pharma got let off the hook for a big assessment levied under Bush...

Obama agreed to block language in the ACA that would have ensured lower drug prices via re-importation and regulation.

David Axelrod got a $100 million advertising contract and Pharma agreed to spend $80 billion on additional coverage, which was a big, big future savings for them.

I understand this, but I'm still not sure how it impacts new drugs.

Well part of the deal was non-interference, whereby the Obama government promised not to negotiate prices for drugs for the marketplace, Medicare market, whatever it may regulate. Presumably if Obama had done what he campaigned on that would have been different and that would have included driving down the price of new drugs.

 

[SaintsInDome2006]

Anyhow, matttyl let's get back to your original point: big pharma company spends billions on a new drug. Makes billions on the new drug. Eventually the price comes way down. Why? Because, according to my doctor, a combo of mass usage (to be precise) and government involvement. Or perhaps there are other reasons. But in any case the price WILL come down.

How does Obamacare play into this for good or ill? I'm not quite getting that.

Wait - aren't you forgetting the whole deal that Obama cut with Big Pharma to get the ACA "passed"???

Obama Was Pushed by Drug Industry, E-Mails SuggestWASHINGTON — After weeks of talks, drug industry lobbyists were growing nervous. To cut a deal with the White House on overhauling health care, they needed to be sure that President Obama would stop a proposal intended to bring down medicine prices.

On June 3, 2009, one of the lobbyists e-mailed Nancy-Ann DeParle, the president’s health care adviser. Ms. DeParle reassured the lobbyist. Although Mr. Obama was overseas, she wrote, she and other top officials had “made decision, based on how constructive you guys have been, to oppose importation” on a different proposal.

Just like that, Mr. Obama’s staff signaled a willingness to put aside support for the reimportation of prescription medicines at lower prices and by doing so solidified a compact with an industry the president had vilified on the campaign trail. Central to Mr. Obama’s drive to remake the nation’s health care system was an unlikely collaboration with the pharmaceutical industry that forced unappealing trade-offs.

The e-mail exchange three years ago was among a cache of messages obtained from the industry and released in recent weeks by House Republicans — including a new batch put out Friday detailing the industry’s advertising campaign supporting Mr. Obama’s health care overhaul. The broad contours of his dealings with the industry were known in 2009, but the newly public e-mails open a window into the compromises underlying a health care law now awaiting the judgment of the Supreme Court.

Mr. Obama’s deal-making in 2009 represented a pivotal moment in his young presidency, a juncture where the heady idealism of the campaign trail collided with the messy reality of Washington policy making. A president who had promised to negotiate on C-Span cut a closed-door deal with a powerful lobby, signifying to disillusioned liberal supporters a loss of innocence, or perhaps even the triumph of cynicism.

But the bargain was one that the president deemed necessary to forestall industry opposition that had thwarted efforts to cover the uninsured for generations. Without the deal, in which the industry agreed to provide $80 billion to expand coverage in exchange for protection from policies that would cost more, Mr. Obama calculated he might get nowhere.

“Throughout his campaign, President Obama was clear that he would bring every stakeholder to the table in order to pass health reform, even longtime opponents like the pharmaceutical industry,” Dan Pfeiffer, the White House communications director, said Friday. “He understood correctly that the unwillingness to work with people on both sides of the issue was one of the reasons why it took a century to pass health reform.”

Republicans see the deal as hypocritical. “He said it was going to be the most open and honest and transparent administration ever and lobbyists won’t be drafting the bills,” said Representative Michael C. Burgess of Texas, a Republican on the House Energy and Commerce Committee examining the deal. “Then when it came time, the door closed, the lobbyists came in and the bills were written.”

Some liberals bothered by the deal in 2009 now find the Republican criticism hard to take given the party’s longstanding ties to the industry.

“Republicans trumpeting these e-mails is like a fox complaining someone else raided the chicken coop,” said Robert Reich, who was labor secretary under President Bill Clinton. “Sad to say, it’s called politics in an era when big corporations have an effective veto over major legislation affecting them and when the G.O.P. is usually the beneficiary.”

In a statement, the Pharmaceutical Research and Manufacturers of America, the drug industry lobby known as PhRMA, called its interactions with the White House part of its mission to “ensure patient access” to high-quality medicine: “Before, during and since the health care debate, PhRMA engaged with Congress and the administration to advance these priorities,” the lobby statement said.

If the negotiations resembled deal-making by past presidents, what distinguished them was that Mr. Obama had strongly rejected business as usual. During his campaign, he singled out the power of the pharmaceutical industry and its chief lobbyist, former Representative Billy Tauzin, a Democrat-turned-Republican from Louisiana.

“The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies,” Mr. Obama said in a campaign advertisement, referring to 2003 legislation. “And you know what? The chairman of the committee who pushed the law through went to work for the pharmaceutical industry making $2 million a year.”

Mr. Obama continued: “That’s an example of the same old game playing in Washington. You know, I don’t want to learn how to play the game better. I want to put an end to the game playing.”

The e-mails document tumultuous negotiations, at certain times transactional, at others prickly. Each side suspected the other of operating in bad faith. Led by Rahm Emanuel, Mr. Obama’s chief of staff at the time, and Jim Messina, his deputy, the White House appeared deeply involved, and not averse to pressure tactics.

In May, the White House was upset industry had not signed on to a joint statement. One industry official urged colleagues to sign: “Rahm is already furious. The ire will be turned on us.” By June, tension flared again. “Barack Obama is going to announce in his Saturday radio address support for rebating all of D unless we come to a deal,” wrote Bryant Hall, a PhRMA lobbyist, referring to a Medicare Part D change that would cost the industry.

A public confrontation was averted and an agreement announced, negotiated down to $80 billion from $100 billion. “We got a good deal,” Mr. Hall wrote.

The White House thought it did, too, and defended it against Democrats in Congress. “WH is working on some very explicit language on importation to kill it in health care reform,” Mr. Hall wrote in September.

Mr. Emanuel, now mayor of Chicago; Mr. Messina, now the president’s campaign manager; Ms. DeParle, now deputy White House chief of staff; and Mr. Bryant, now heading his own firm, all declined to comment.

The e-mails released Friday also underscored detailed discussions about an advertising campaign supporting Mr. Obama’s health overhaul. “They plan to hit up the ‘bad guys’ for most of the $,” a union official wrote after an April meeting. “They want us to just put in enough to be able to put our names in it — he is thinking @100K.” In July, Mr. Hall wrote, “Rahm asked for Harry and Louise ads thru third party,” referring to the characters the industry had used to defeat Mr. Clinton’s health care proposal 15 years earlier.

Industry and Democratic officials said advertising was an outgrowth of the deal, not its goal. The industry traditionally advertises for legislation it supports.

In the end, balky House Democrats imposed additional conditions on the industry that pushed the cost above $100 billion, but the more sweeping policies it feared remained out of the legislation. Mr. Obama signed it in March 2010. He had the victory he wanted.

http://www.nytimes.com/2012/06/09/us/politics/e-mails-reveal-extent-of-obamas-deal-with-industry-on-health-care.html?pagewanted=all&_r=0

Btw one of the big winners in that advertising deal was an advertising firm owned by David Axelrod's brother. Pretty much a Chicago style pay to play operation there.

Why do you put passed in parentheses?

Because what we have looks nothing like what was negotiated and passed as the final text that actually came before Congress, starting with the Hyde Amendment provisions but not ending there. Unless you consider passing a law with the provisions that the executive branch can do whatever it wants with it after that point in time "passage." There have been a couple score executive orders, Democrats voted for abortion funding only to see that stripped within 48 hours, the employer mandates have not been implemented, minimum employer coverage requirements have been bent, etc., etc.

 

[timschochet]

As always, matttyl you raise fine issues. But I have to point out that your moral dilemma is at least as old as Medicare, which is a 50 year program at this point. Under Medicare, you can have people who retire after years of living healthy, eating right, and exercising, and other people retire after years of living like crap. And the healthy ones have to pay for the unhealthy ones. Under your premise, that's immoral, and it's hard to argue the point, except to say that it's the price we choose to pay to have Medicare.

It seems to me it's the same thing here. Whether its Obamacare (the specifics of which I disapproved of) or whether it's some other form of government involvement, we as a society have chosen that we're going to collectively help those of us who can't afford medical care to obtain it- and that means inequity. That means that there will be those who screw up and we're going to have to pay for them. That means some sort of transfer of wealth. But it's the price we have chosen to pay. Personally, at least in theory, I'm willing to pay that price in order to make sure that there's no one out there in this country that can't get health care.

First off I didn't say it's "immoral", I said it may be a moral dilemma. As far as Medicare, you realize that it's costing about $600B this year alone, right?Specifically on the part I bolded - this hep C drug is 84,000 per person (currently). There are approximately 3.2m in America with it. That's $269B if we'd somehow be able to get it to all those people immediately. Divide that cost by our population, and it comes out to $856 per person, on average. I believe you're in a family of 4, correct? Would you and your family be willing to part with $3,424 right now to insure that everyone (in America) that we think has hep C (many people don't know they have it) is cured of it (to the extent that this drug cures hep C)?

No. But I don't think that's gonna happen.

 

[timschochet]

Thanks Saints. Can you or anyone explain, in simple terms, how that agreement affects new drugs like this one, and drugs in the future?

Aside from the fact that Big Pharma got let off the hook for a big assessment levied under Bush...

Obama agreed to block language in the ACA that would have ensured lower drug prices via re-importation and regulation.

David Axelrod got a $100 million advertising contract and Pharma agreed to spend $80 billion on additional coverage, which was a big, big future savings for them.

I understand this, but I'm still not sure how it impacts new drugs.

Well part of the deal was non-interference, whereby the Obama government promised not to negotiate prices for drugs for the marketplace, Medicare market, whatever it may regulate. Presumably if Obama had done what he campaigned on that would have been different and that would have included driving down the price of new drugs.

If the drug companies agreed to this, then that was dumb on their part. No matter what Obama promised as part of the original deal, if drug prices get too high (or insurance rates get too high because of the drug prices) then the government is going to lay a heavy hand on the drug companies.

 

[matttyl]

matttyl as to your more specific, non-moral concerns: I suspect that everything you described is temporary, and that the drug price will drop to affordable terms. 50% of $84,000 is NOT affordable. It will drop, and the large rate hikes you fear will not happen long term.

That's my expectation, though don't ask me how much or even how this works because I have no idea. However, if I'm wrong and the rates do jack up for this sort of reason, the result will be ever MORE controls, much more stringent than Obamacare- ultimately the result will be universal health care.

Tim, I posted the cost of HIV drugs today, nearly 20 years since the first ones hit the market. Do you consider those costs to be affordable? Those are the per month, per drug prices. Did you not see that some of them are over $1k per month?

When Oregon's Medicaid program comes out and says that it's expecting to spend roughly as much on this one single drug this year as it did on all pharmaceuticals last year - how is it going to offset that additional cost? I have to image a similar situation is occurring in the individual insurance exchanges as well. Somewhere in this thread someone posted about the early claims coming in in these new ACA pools, and that they are seeing something like 4x as many claims for hep C drugs in these new pools than they did in the existing pools.

Here's an article from earlier this week saying how this one drug alone could add $300 to everyone's insurance premiums over the next 5 years. The study was done by Express Scripts - I believe one of, if not the largest RX claim filer in the nation.

 

[matttyl]

As always, matttyl you raise fine issues. But I have to point out that your moral dilemma is at least as old as Medicare, which is a 50 year program at this point. Under Medicare, you can have people who retire after years of living healthy, eating right, and exercising, and other people retire after years of living like crap. And the healthy ones have to pay for the unhealthy ones. Under your premise, that's immoral, and it's hard to argue the point, except to say that it's the price we choose to pay to have Medicare.

It seems to me it's the same thing here. Whether its Obamacare (the specifics of which I disapproved of) or whether it's some other form of government involvement, we as a society have chosen that we're going to collectively help those of us who can't afford medical care to obtain it- and that means inequity. That means that there will be those who screw up and we're going to have to pay for them. That means some sort of transfer of wealth. But it's the price we have chosen to pay. Personally, at least in theory, I'm willing to pay that price in order to make sure that there's no one out there in this country that can't get health care.

First off I didn't say it's "immoral", I said it may be a moral dilemma. As far as Medicare, you realize that it's costing about $600B this year alone, right?Specifically on the part I bolded - this hep C drug is 84,000 per person (currently). There are approximately 3.2m in America with it. That's $269B if we'd somehow be able to get it to all those people immediately. Divide that cost by our population, and it comes out to $856 per person, on average. I believe you're in a family of 4, correct? Would you and your family be willing to part with $3,424 right now to insure that everyone (in America) that we think has hep C (many people don't know they have it) is cured of it (to the extent that this drug cures hep C)?

No. But I don't think that's gonna happen.

Read the article I just posted that puts the number at about $300 per American, per year added to their insurance premiums. The study was done by Express Scripts, a huge RX claim filer.

So for your family of 4 that would be about $1,200 per year. After 3 years of that, you'd be at the same place.....

 

[SaintsInDome2006]

Thanks Saints. Can you or anyone explain, in simple terms, how that agreement affects new drugs like this one, and drugs in the future?

Aside from the fact that Big Pharma got let off the hook for a big assessment levied under Bush...

Obama agreed to block language in the ACA that would have ensured lower drug prices via re-importation and regulation.

David Axelrod got a $100 million advertising contract and Pharma agreed to spend $80 billion on additional coverage, which was a big, big future savings for them.

I understand this, but I'm still not sure how it impacts new drugs.

Well part of the deal was non-interference, whereby the Obama government promised not to negotiate prices for drugs for the marketplace, Medicare market, whatever it may regulate. Presumably if Obama had done what he campaigned on that would have been different and that would have included driving down the price of new drugs.

If the drug companies agreed to this, then that was dumb on their part. No matter what Obama promised as part of the original deal, if drug prices get too high (or insurance rates get too high because of the drug prices) then the government is going to lay a heavy hand on the drug companies.

Why would it be dumb for Pharma? It allows them to continue marketing at the price they want rather than negotiate with the market as a whole.

And you miss the point: Obama and Axelrod made a deal that guaranteed the government would never lay a hand on them. That's the flippin' point.