Tuesday, June 23, 2009

Where the Money is Coming From

Remember, the Obama Administration's plan to pay for at least a part of their $1.6 trillion dollar health reform plan is supposed to come from Medicare savings (please try to control your sniggering, the bigger punchline is coming). Well, reportedly some of the savings will come from the White House getting drug companies to reduce by half the amount charged for some prescription drugs. More on that in a second. Well it looks like the White House can only save $30 billion over 10 years doing that. The White House can't detail where the other $50 billion is going to come from. Not exactly the details that are going to help get this monstrosity passed or supported by the American public.

Now, of course the administration can put price "controls" on drug companies by saying they will on buy drugs at a given price. But drug companies are in the business of making money and they make money by selling the drugs they make and patent. There is no suggestion about changing the patent process on drugs (which is not a bad idea to shorten the patent protection period by a couple of years in order to speed up the development and availability of generics). So, if the drug companies are not making their money off of Medicare patients, where are they going to get their money--that is right, from the rest of us non-Medicare people.

I just saw my prescription drug costs go up and nothing has happened.

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