Please read the article, Buying Influence, posted on iLearn. Note: The author refers to the prescription drug industry as “Big Pharma.”
What were the major provisions of the Medicare prescription drug benefit passed by Congress in 2003?
Medicare is not permitted to do the following:
- Use its purchasing power to bargain for low prices
Medicare cannot negotiate prices anymore since most of the decision for pricing will depend upon the drug companies involved.
- Declare which drug companies are to be paid
Medicare does not have a say regarding what drug companies are paid as mandated to them.
- Exclude coverage of expensive drugs in addition to more cost-effective ones
Medicare cannot choose which drugs to cover. This means that, besides purchasing cost-effective drugs, those of the high-priced variety cannot be excluded.
- Attach charges to the average wholesale price
Medicare is not privileged to add/ deduct charges and must comply with the average wholesale price.
In what ways did this legislation benefit the drug industry?
- Stock prices of drug companies increased
Investors see the provision as an advantage seeing as drug industries are now able to price their products mostly for their benefit.
- Market for drug companies expand
Drug companies have a much bigger market owing to the fact that companies like Medicare cannot exclusively choose which drug company to make business with and is thus much more open to the rest of the drug industry.
- Little restraint on prices.
The terms on prices provides little restraint from drug companies and allows them to charge clients according to their own profitable advantage.
What mechanisms of political influence did the drug industry use in seeking passage of this legislation? (You may wish to review pages 189-198 in the textbook before answering this question.)
The drug industry is intent on supplying financial contributions to politicians who serve as vital persons in the approval of certain laws that will further aid drug companies in their aim for maximum profit. These politicians use the money in their political campaigns and maintain connections also for the benefit of their respective candidacies.
Drug companies have people and connections in the legislative body of the government. They pay these connections or gain their favor in order to make sure that profitable bills and acts are passed duly and without much hindrance.
In what ways has the drug industry influenced the process by which the FDA approves or disapproves new drugs?
- Drug companies paid user fees to the FDA to speed up drug approval process.
User fees are quite influential since these fees are almost an assurance whether particular prescription drugs will be approved or not. Depending on the price paid by the drug companies, the fees will be used to expedite the approval process; hence, the higher the price, the faster the process. The fees have continued to increase over the years and drug companies do not mind since these amounts are just “chump change” to the net income they acquire.
- Some advisory committee members on drug approval have financial connections with interested companies.
The advisory committee is composed of individuals who are experts in the field of pharmaceuticals and pharmacology. Therefore, their task is vital in approving which drugs are available on the market. Bias within the committee, however, creates a deeper issue. Some members are reportedly receiving amounts of money just to let drug companies implore them for “consultation” regarding their proposed prescription drugs.
Do you believe that the drug industry influenced the public policy process legitimately, or did it have “too much” influence?
The drug industry has too much influence involved on the subject of legislative decisions. The point that they “lobby” and finance certain government employees and politicians speaks for itself. The drug industry, to be fair, should not involve themselves in matters of politics or legislation. First of all, they have no business with politics or the legislation since the only thing they should be concerned about is to create drugs that will greatly help the general public health. Second, if they think that their prescription drugs truly will be of help to the community, they should have corresponding documents to support such propositions and make sure that available drugs on the market do not have similar characteristics. Otherwise