Big Pharma: "We’re Entitled"

 

                          From Zippia.com

Big Pharma: “We’re Entitled”

A “dystopian parody of ‘negotiation,’ ”

Merck’s description of the new negotiation mandate over prescription drugs under the Inflation Reduction Act

For those Americans whose in-home “television” carries commercials, the tsunami of ads for prescription drugs – in a world where Big Pharma claims it needs high drug costs to pay for research and development – defies logic. Americans pay the highest prescription drug prices of any developed nation on the planet, drugs from these same manufacturers. Every year, US healthcare costs always rise above the general cost-of-living increase for everything else. Those Big Pharma ads are slick with expensive production values, and they proliferate across so many media platforms. But as these drugs require a prescription, these consumer-targeted ads are vehicles to turn patients into Big Pharma’s marketing arm to doctors.

When the Affordable Care Act squeezed through Congress in 2010, it did so with a legislative bribe to health insurance carriers (the assurance that they would administer the plan with an insurance mandate, one that was soon reversed) and, mostly, to Big Pharma. The healthcare exchanges that were to be created to implement the ACA were expressly forbidden to use their newfound size in their pricing negotiations with drugmakers. The ACA would pay whatever Big Pharma billed.

Republicans in Congress do not see these corporate battles as seeking “entitlements,” rather they view them as restraints on private business. But where on this planet does capitalism allow any corporation granted a monopoly by statute (e.g., patent law) the right to use that monopoly power to the overwhelming detriment of the general population? Despite the GOP pledge, given during the debt ceiling debate, to leave Medicare and Social Security intact, those two programs are very much on the budget-setting agenda, referred to as “entitlements.” Greed is far and away the single force keeping medical costs higher than any other nation on earth. We should be reminded that the only mandate on US corporate officers and directors is to foster economic values to shareholders. Not to employees, customers or society. Just shareholders!

At the heart of this arousal-to-arms that is infecting Big Pharma, with the support of the US Chamber of Commerce, is that they should not be forced to negotiate with Medicare, as now required under the recent Biden Inflation Reduction Act, to moderate drug pricing. They believe that any condition imposed on their negotiation process is constitutionally prohibited. Writing his OpEd for the June 18th Los Angeles Times, Michael Hilzik explains:

“No one really expected the pharmaceutical industry to lie down and take it when Congress authorized Medicare to start negotiating prices of the prescription drugs it buys for enrollees… By that standard, the federal lawsuit filed June 6 by the big drug manufacturer Merck falls into the ‘dog bites man’ category of non-news… So, too, does a nearly identical lawsuit filed June 9 by the U.S. Chamber of Commerce. And also the threats by other drug companies to file their own lawsuits.

“That doesn’t mean the cases aren’t worth examining. They’re windows into the mind of Big Pharma, revealing the industry’s grotesque level of entitlement and its cynical exploitation of Americans’ desire for better healthcare in order to claim profits well beyond the level that any thinking person would consider moral.

“The lawsuits are so similar they read like ChatGPT versions of each other. Both are compendiums of artful dodging and febrile rhetoric, which is what corporate lawyers produce for a living. (Merck calls the program a ‘dystopian parody of ‘negotiation,’ ‘ which is pretty fancy wordsmithing.)

“In essence, the lawsuits assert that the Medicare negotiation program, which was established by the Inflation Reduction Act, or IRA, signed in August by President Biden, is so weighted in Medicare’s favor that it’s illegal and unconstitutional — ‘tantamount to extortion,’ Merck says.

“Big Pharma claims through these lawsuits that it’s being ‘coerced’ into bowing to price cuts mandated by unelected bureaucrats at the Department of Health and Human Services for its most popular prescription drugs. Merck’s version of the argument is that by forcing it to negotiate with Medicare in order to sell its drugs, the government is engaging in an unconstitutional ‘taking’ of Merck’s private property ‘without just compensation.’

“The fundamental flaw in this argument, says Nicholas Bagley, an expert on administrative and healthcare law at the University of Michigan, is that ‘Merck doesn’t have a constitutional right to sell its drugs to the government at the price that Merck would prefer.’ The government isn’t ‘taking’ anything that Merck doesn’t choose to give it.

“In explaining why it’s suing the government, Merck produces a parade of horribles it says will be the consequences of federal regulation of drug prices. ‘We believe this program will negatively impact biopharmaceutical innovation and the sector’s work to develop lifesaving and life-changing innovations. In turn, it will have devastating consequences for millions of patients in need.’… We’ve heard all this before. Every industry always claims that every regulatory initiative will hamper innovation, raise consumer costs and harm millions of innocent people. This is just PR persiflage, and you can safely ignore it.”

Indeed, these spurious arguments have been made to oppose everything from income taxes to environmental regulations to price controls. Obviously without success. Do we really want to tell these companies that American taxpayers should slake their greed, that negotiation must be rigged for corporate profits above all else. Why not simply open Fort Knox and let them have as much as they desire? The very foundation of a capitalist market is based on free and open negotiation between buyers and sellers. It seems that it is Big Pharma that seeks the right to coerce.

Indeed, that these companies can make such arguments, and file their lawsuits, with a straight face is a testament to the unbridled power of special interests who pay billions of dollars every year in political contributions and coercive lawsuits to squeeze American taxpayers as best they can.

I’m Peter Dekom, and I cannot think of a single legitimate reason wantonly to throw cash as these greedy corporate pigs seeking the real entitlements in this mix.