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Looking Out for Taxpayers, Consumers with Rx Deal
A reported deal orchestrated by a major pharmaceutical company will make the American consumer pay more than necessary for drugs and inhibit competition from generic drugs. The system shouldn’t be manipulated in a way that bilks taxpayers, hurts consumers and unfairly prevents alternatives from entering the marketplace, and I’m asking questions and seeking accountability with two other senators.
In fact, if these types of agreements become a trend, it’s very bad news for consumers. Over the long run, without the prospect of a fair and competitive marketplace, generic drug makers will hesitate to invest the time and money needed to develop low-cost generic alternatives. With more competition in the marketplace, consumers will receive both better pricing and more health care treatment options.
There’s also the issue of taxpayer-funded prescription drug programs. This year alone, spending on the Medicare Part D prescription drug program will total $65 billion. More than 100 million Americans access affordable prescription drugs through both Medicare and Medicaid. During the next four years, patents will expire on brand-name drugs with an estimated $100 billion in sales in the United States. Taxpayers can’t afford to have cost savings from generic alternatives delayed.
Yet, a news story that broke last month indicated that Pfizer Inc. has given discounts to companies that administer prescription drugs, known as PBMs, and insurance companies in exchange for the PBMs and insurers blocking prescriptions for the generic equivalent to Lipitor, for which Pfizer’s patent is ending. The co-pay for plan participants would be discounted and made equal to the cost of a less-expensive generic, but it appears that the PBMs and insurers can charge health-plan sponsors, including employers and Medicare Part D, full price for brand-name Lipitor from December 1, 2011, to May 31, 2012, all the while pocketing the discount from Pfizer.
Senators Max Baucus, Herb Kohl and I have asked the drug maker, the PBMs and the insurers involved for a full accounting. We’ve asked from our positions on the Judiciary, Finance and Aging committees in the Senate. The long-run implications of this kind of business practice fly in the face of fair competition and an open marketplace. And they further jeopardize the fiscal well-being of Medicare and Medicaid.
December 5, 2011
A reported deal orchestrated by a major pharmaceutical company will make the American consumer pay more than necessary for drugs and inhibit competition from generic drugs. The system shouldn’t be manipulated in a way that bilks taxpayers, hurts consumers and unfairly prevents alternatives from entering the marketplace, and I’m asking questions and seeking accountability with two other senators.
In fact, if these types of agreements become a trend, it’s very bad news for consumers. Over the long run, without the prospect of a fair and competitive marketplace, generic drug makers will hesitate to invest the time and money needed to develop low-cost generic alternatives. With more competition in the marketplace, consumers will receive both better pricing and more health care treatment options.
There’s also the issue of taxpayer-funded prescription drug programs. This year alone, spending on the Medicare Part D prescription drug program will total $65 billion. More than 100 million Americans access affordable prescription drugs through both Medicare and Medicaid. During the next four years, patents will expire on brand-name drugs with an estimated $100 billion in sales in the United States. Taxpayers can’t afford to have cost savings from generic alternatives delayed.
Yet, a news story that broke last month indicated that Pfizer Inc. has given discounts to companies that administer prescription drugs, known as PBMs, and insurance companies in exchange for the PBMs and insurers blocking prescriptions for the generic equivalent to Lipitor, for which Pfizer’s patent is ending. The co-pay for plan participants would be discounted and made equal to the cost of a less-expensive generic, but it appears that the PBMs and insurers can charge health-plan sponsors, including employers and Medicare Part D, full price for brand-name Lipitor from December 1, 2011, to May 31, 2012, all the while pocketing the discount from Pfizer.
Senators Max Baucus, Herb Kohl and I have asked the drug maker, the PBMs and the insurers involved for a full accounting. We’ve asked from our positions on the Judiciary, Finance and Aging committees in the Senate. The long-run implications of this kind of business practice fly in the face of fair competition and an open marketplace. And they further jeopardize the fiscal well-being of Medicare and Medicaid.
December 5, 2011