Lately, we have been bombarded with television commercials praising the Medicare Drug Prescription Program and asking us to oppose any changes thereto which may be proposed by Congress. Fred Thompson, former U.S. Senator from Tennessee and current District Attorney on television's LAW AND ORDER, editorialized the same message over the radio. Why the campaign to keep the drug prescription program in its present form?
The pharmaceutical industry is fighting a possible repeal of the provision which prohibits Medicare from negotiating drug prices with pharmaceutical companies. This provision results in the price gouging of taxpayers and sick seniors. The Veterans Administration has the right to negotiate drug prices with the result that, in many cases, it gets drugs for less than half of what they cost Medicare.
Which members of Congress wrote the Medicare drug prescription bill? None of them. It was written by lobbyists for the pharmaceutical industry. That industry spends over a 100 million dollars a year lobbying Congress. Those lobbyists sneaked in the provision which prohibits Medicare from negotiating the price of drugs. When presented to Congress, the bill was so voluminous that few members of Congress or their staffs were able to read it before it was voted on.
Whenever anyone suggests that the prohibition against price negotiations be repealed, they are told that the drug manufacturers have to charge the prices they do in order to have the millions and millions of dollars needed for research and development. The development of new life-saving drugs, they claim, would be impeded if the negotiating prohibition were to be removed from the Medicare drug prescription law.
The pharmaceutical industry has always claimed that it spends most of its income on research and development. That is not true, and never has been. They spend far more money on marketing and lobbying than they ever do on research and development. In addition to the cost of lobbing, the industry spends obscene amounts on television commercials, print media ads, and pitches for their drugs to physicians and hospitals.
For a couple of years back in the mid-'50s, I worked as a "drug detail man" - now known as a pharmaceutical sales representative - for a small pharmaceutical manufacturer. My job was to call on doctors and persuade them to prescribe my company's products in their medical practice. I was given plenty of samples to leave with them and I was able to take them out to lunch or dinner occasionally. Once, I was even able to take a doctor to the Patterson-Harris world heavyweight boxing championship fight. However, my company did not have the resources to compete with its larger competitors in enticing doctors to prescribe the drugs being pitched.
What were some of these enticements? Actually, bribes would be a more accurate description. Some pharmaceutical companies would provide interest free loans to furnish the offices of new doctors. Many of those loans would be forgiven if the doctor prescribed their drugs exclusively. Most companies provided gifts to doctors. One company gave doctors expensive pens. Once the word got around, dcctors would ask the detail man for one of the pens. Those doctors were told that they could have one only if they would use it to prescribe his company's products. For their favorite doctors, some companies covered the costs for office Christmas parties.
Las Vegas was in my territory. When I pitched my company's products to the chief physician of a large clinic, this is what he told me. "Look, I'll be frank with you. Every month, - - - - - - takes all of our people and our wives or husbands to a dinner show at one of the casinos. You do that, and I'll be glad to have us prescribe some of your products. Otherwise, you're wasting your time and ours by calling on us." One can only speculate on how much it cost to take six doctors, six nurses, three receptionists, three lab technicians, and four business office employees, together with all their wives, husbands, girlfriends or boyfriends out to a Las Vegas casino for dinner and drinks every month.
In those days, pharmaceutical advertisements were limited to multi-full-page color spreads in medical journals. Even then, marketing expenditures far exceeded the expenditures for research and development. Do the pharmaceutical companies end up paying for the obscene amount they spend on lobbying and marketing? No! They profit from it by charging consumers higher prices. The Veterans Administration gets its drugs for a lot less than Medicare. The Canadians get the same drugs for a lot less than Americans. The price gouging of taxpayers and sick seniors will continue as long as Medicare is prohibited from negotiating for the price of prescription drugs.
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