Why Are The Drug and Health Insurance Companies Smiling?
An important objective of meaningful health care reform is cost control. President Obama’s sweetheart deal with the drug companies and the dropping of a public option to provide meaningful competition to for-profit health insurance companies will not provide needed cost control. Given the way health care reform is heading, is it any wonder the drug and health insurance companies are smiling. Sweetheart Drug Deal Reportedly President Obama reached an agreement with the big drug companies to cut the price of medicine by $80 billion. Sounds like a lot. But consider that U.S. spending on prescription drugs for the next ten years is projected to be $3.6 trillion. That’s a price reduction of only 2 percent. But the drug industry did not actually agree to cut prices. Instead, they agreed over ten years to reduce by $80 billion dollars the amount at which they would otherwise have raised drug prices. Thus, the agreement locks in a doubling of drug costs, projected to rise over the 10-year peri
