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Editorial See other Editorial Articles Title: Is Any Industry’s Interests More at Odds With Those of Taxpayers? Is Any Industry’s Interests More at Odds With Those of Taxpayers? by Ed Silverman February 15, 2013 0 0 epSos.de Just hours after President Barack Obama revived a proposal to require drugmakers to provide Medicare with the same sort of discounts that are given to Medicaid, a new analysis claims taxpayers could save even more money if the US government directly negotiates prescription drug prices with the pharmaceutical industry. In his State of the Union address this week, Obama called for reforming Medicare but was not specific. However, the U.S. Department of Health & Human Services Office of the Inspector General estimates that Medicare Part D gets a 19 percent discount on drugs, compared with a 45 percent discount for Medicaid. By realigning the discounts, the White House estimates about $156 billion could be saved over a decade. However, the federal government could save anywhere from $230 billion to $541 billion over the next 10 years if the government were to negotiate Medicare drug prices directly with the pharmaceutical industry. And state governments could save from $31 billion to $72 billion, while consumers could save from $48 billion to $112 billion over the same period, according to the analysis by the Center for Economic and Policy Research. Savings like those, of course, would mean a less-profitable pharmaceutical industry – including Pfizer (PFE), Novartis (NVS), Merck (MRK), GlaxoSmithKline (GSK), Sanofi (SNY) and Eli Lilly (LLY) -- and stock prices would be expected to fall substantially. PFE Market Cap Chart PFE Market Cap data by YCharts “It’s ridiculous for Medicare to be paying drug companies two and three times as much money for drugs as other countries at a time when we are cutting essential programs,” says Dean Baker, co-director of CEPR, which is a nonprofit think tank, and author of the analysis, in a statement. “This fix alone would go far towards hitting anyone’s deficit target.” The rationale for the projected savings is that other countries that negotiate prescription drug prices directly with drugmakers have lower costs. For instance, the CEPR cites per capita spending in Canada, where costs per person are 72 percent lower than in the US. Similarly, costs are 39 percent lower in the United Kingdom and 34 percent lower in Denmark (read more here). To read the remainder of this article, go to Pharmalot. Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at editor@ycharts.com. Featured Coverage Apple Guy Reaches For the Storm Windows at JC Penney: Bigger Revolver, Employee Sniping Only $688 Million to Make Merck’s Vytorin Mess Go Away? Seems Almost Cheap How a Fund Manager Says Goodbye to a Winning Stock Hey, People Who Pushed Avon Shares up 22% This Week: It’s Still the Door-to-Door Business Why Heinz Deal Doesn’t Rule Out Bigger Acquisition by Buffett Not-So-Epic: Apple’s Recent Stock Plunge, in Context Shouldn't the Google of China Be Growing Faster Than Google? Happy Valentine: Margins Threatened at Chocolate Makers Hershey and Mondelez? Odd, This: Big Pharma On Losing End of Pricing Dispute A Drumbeat Against Soda Pop? Are Coke and Pepsi Shares Vulnerable? $176,000 or $295,00 a Year: Bizarre World of Orphan Drugs The Bull Case for Under Armour Stock -- and its New Gadget You Think Apple’s Swoon is Epic? Two Weirdly-Valued Stocks: If You Ignored Company Names, What Would You Think? Judge to Bristol-Myers: Patent on $1.4 Billion Hepatitis-B Treatment Invalid; Teva to Benefit Hewlett-Packard Stock: What a Handful of Big Buyers See Fees Matter: We Show Off Low-Cost ETFs That Undercut Mutual Fund Expenses Which New Consumer Payments Technology Will Prevail? Why It Matters Little to Visa, MasterCard FDA Decision on Diabetes Drug Hurts Novo Nordisk, Helps Sanofi McDonald’s Savior Jim Skinner Chairs the Walgreen Board: If Only He Were CEO Other Resources Reuters.com Bloomberg.com CNBC.com Forbes.com MarketWatch.com TheStreet.com FT.com StockTwits.com Economist.com WSJ.com Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 1.
#1. To: tom007 (#0)
If you think that's good money just think how much we'd save if they completely dismantled it.
There are no replies to Comment # 1. End Trace Mode for Comment # 1.
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