Needed drugs should always be affordable, regardless of the amount of profit pharmaceutical companies desire. And for those who are being subsidized by government medical programs, prices still should be reasonable even if the patient him or herself isn’t responsible for the full amount. The government explored a series of rebates from drug companies to help cover the skyrocketing prices of drugs, but those rebate could be coming to an end.
But Rep. Eric Cantor and his cronies would rather make sure that pharmaceutical companies are getting money back, even if it comes at the expense of poor seniors — an expense that would be shifted to the U.S. government.
At its core, the proposal restores rebates paid by brand-name drugmakers for the “dual eligible” population — those seniors eligible for both Medicare and Medicaid. Depending on how it is written, the plan could return anywhere from return anywhere from $50 billion to $100 billion to federal coffers. Democrats describe this as a cost-saver and want to be able to say it fits their criteria of strengthening Medicare. But Republicans, particularly Cantor, call it a revenue raiser, which the party is leery of supporting.
Drugmakers have paid these types of rebates before. In 2006, however, the rebate program ended when low-income seniors were shifted out of Medicaid and into Medicare. While Medicare is prohibited from negotiating for lower prices, pharmaceutical companies nevertheless offer certain discounts for their wares. PhRMA President and Chief Executive John Castellani has said anything more would effectively be a “double whammy” for the industry.
Photo credit: United States Congress