Editorial: Promises of drug industry fall flat - Sacramento Opinion - Sacramento Editorial | Sacramento Bee

Is the support of the pharmaceutical industry needed for Congress to pass health care reform? Or is the price of that support too high for the people the reform package is trying to help?

Those questions took on new urgency this week with the release of a study by AARP, the seniors advocacy group, that found that drug makers had raised the wholesale price of brand-name prescription drugs by 9 percent, or $10 billion, in the past year. One analyst who was quoted in the report, which ran on The Bee’s front page, said the price increase was the biggest in 17 years.

What particularly outraged opponents of “Big Pharma” is that the industry’s lobbyists had made a deal with the Obama administration and key Senate leaders to do just the opposite. In agreeing to support the health care overhaul, the pharmaceutical industry pledged to cut up to $80 billion in prescription costs over the next decade – although many of the details of how this would be accomplished were never made public.

In return, Medicare, a massive buyer of prescription drugs, was barred from negotiating lower prices or directing recipients away from expensive medicines when cheaper and equally effective options were available.

For certain Democrats in the House, the prescription price hike was new evidence of the industry’s chicanery. That distrust is the main reason the House didn’t sign on to the Obama administration’s deal, and came up with its own list of ways to cut drug company payments.

A key source of conflict: The multibillion-dollar payments the drug industry began receiving when 6.4 million low-income people were transferred from Medicaid – the government health program for the poor – to Medicare in 2006.

Rep. Henry Waxman, the Beverly Hills Democrat who was one of the key forces behind the House health-care bill, said this transfer provided the drug companies with a windfall. “I just don’t know why we should be overpaying pharmaceutical companies,” he grumbled.

The Senate is scheduled to begin debate tonight on its own version of health insurance reform. Undoubtedly, some senators will offer amendments that will allow the government to negotiate lower drug prices under Medicare.

For Senate Majority Leader Harry Reid, the choices are difficult. He faces enough challenges moving a bill through his chamber without reopening a skirmish with the drug industry. That’s why he likely will try to pass a “clean” bill, and then leave it to the conference committee to resolve differences over drug pricing.

The pharmaceutical industry stands to gain more than 30 million new customers under this legislation. That will more than make up for the expense of the $80 billion in prescription cost cuts they promised. That’s why the House can make a strong argument, both to the drug industry and the American people, that Medicare should be authorized to negotiate lower prices.

This is a momentous time. Congress and the White House are poised to expand health insurance coverage to millions of Americans who desperately need it. Even if the House doesn’t prevail with its version of this bill, this issue will not go away. The drug industry will be held to account for its promises.

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