Causes of the Deficit Part One: Medicare

Last year Medicare Part D subscribers spent sixty two billion dollars on prescription drugs. If those drugs had been purchased through the V.A. or through any other branch of the armed forces, they would have cost about thirty billion. That would have been an enormous saving for ordinary people and would have been one more notch in bringing down the ballooning deficit. Health care outlays by the Federal government are one of the largest contributors to the deficit. However, because of certain provisions built into the law, the Medicare Agency is not allowed to use the free market to bargain down prices for drugs. It is not allowed to purchase them from the very stable, very reputable companies in Canada. All that it is allowed to do is take the inflated prices offered by the big pharmaceutical companies and pay them. The military, Tricare, the Veterans Administration and many other government entities have the right to collectively negotiate drug prices for better rates, but Medicare does not.

The origin of this glitch goes back to when the Pharmaceutical Research and Manufacturers of America (the drug industry lobby known as “Big PhRMA”), was asked by Congressman Billy Tauzin to help him write the language for the act which established Medicare Part D, something that was at least lazy and possibly illegal. They did what they were told and produced a bill that many believe is far more favorable to the industry than to the Medicare subscribers. Following its passage, Tauzin was hired as the president of Phrma, at an annual salary of $2 million.

One wonders whether the Medicare Part D subscribers have the right to sue Phrma or Tauzin for something like the violation of their civil rights for blocking their ability to compete in a free and unfettered open market.