A secretive drug deal this past weekend by President Obama and Congress with the pharmaceutical industry was hailed as “a turning point in
“The pharmaceutical industry agreed Saturday to spend $80 billion over the next decade improving drug benefits for seniors on Medicare,” opened the breaking story from Associated Pr
FACT CHECK #1
The Medicare Prescription Drug Act (MPDA) enacted in 2003 by Congress at the urging of the Bush Administration reduced drug costs to some seniors. The tab for reduced cost to seniors was picked up by Taxpayers.
However, MPDA also eliminated a longstanding proviso that required pharmaceutical firms to provide Medicare any discounts on drug costs. This government sponsored largesse was also picked up by Taxpayers.
Pharmaceutical profits reportedly increased $20 billion dollars in just the first year of this sweetheart deal.
This can only increase when factoring in pharmaceutical costs traditionally increasing at least twice the rate of inflation each year.
“Health care costs to rise 9 pct in 2010,” was another AP headline just two days before the “secret deal” announcement.
“If the underlying costs go up by 9 percent, employees’ costs actually go up by double digits,” said a principle of the prestigious Price-Waterhouse firm that conducted the study.
The “$80 billion over the next decade” agreed to (allegedly) by the pharmaceutical industry represents only a fraction of the exorbitant added profits provided due to previous federal legislation.
Prior to the government sponsored profit boondoggle of MPDA the total combined profits of just the pharmaceutical companies listed on the Fortune 500 already exceeded the total combined profits of every other of the more than 480 other firms listed on the Fortune 500.
Change we can’t believe in
Even the fraction of giveback of their federally sponsored excessive profits to which the “pharmaceutical industry agreed” is not reliable as it is predicated on their following through on what they say – for which their track record is abysmal.
The examples where the industry says they will – and are even subject by required procedures to – provide safety testing, certifications, and follow protocols that they subsequently renege on - number countless hundreds of examples far exceeding one thousand at last count.
Extra hospitalizations, permanent injuries, and innumerable deaths are documented as results of this pharmaceutical industry non-compliance.
Just two days after the Obama announcement of what the “pharmaceutical industry agreed” a spokesman representing the entire pharmaceutical industry was already noting that their giveback was subject to certain conditions according to yet another AP story headline.
Another day later it was revealed that brand name pharmaceuticals cost American consumers an additional $3.5 billion dollars annually by paying generic producers to stay out of the marketplace.
FACT CHECK #2
“The agreement by pharmaceutical companies to contribute to the health reform effort comes on the heels of the landmark pledge many health industry leaders made to me last month, when they offered to do their part to reduce health spending $2 trillion over the next decade,” Obama said prefacing his “turning point” statement.
The pledge last month to which Obama referred this month was covered by a Reuters headline at that time, “Obama says healthcare overhaul could save trillions.”
Trillions sounds great! But what exactly did Obama actually say?
“Over the next ten years – from 2010 to 2019 – they are pledging to cut the growth rate of national health care spending by 1.5 percentage points each year – an amount that’s equal to over $2 trillion.”
Well, the number 2 is greater than the number 1 and technically that does make a plural “trillions”. However, that is spread over 10 years so now we are talking about $200 billion annually which is only a small fraction (one-fifth) of a non-plural, single trillion.
Look a little closer.
The Gross Domestic Product (GDP) is at least $14 trillion (most put it at greater than $15 trillion). The health care portion of GDP is at least 15 per cent (Obama’s own economic team puts that figure at 18 per cent).
That places the annual health care spending at greater than $2.1 trillion so $200 billion is not even a 10 per cent reduction from the high-priced, most profitable business sector of health (or rather sick) care.
Federal projections already place the annual cost conservatively at $4.4 trillion in less than 10 years. That makes $200 billion reduced costs significantly less than a 5 per cent reduction.
Again, all of this is predicated on the drug and medical device manufacturers actually following through on the pledge that Obama said they made.
Only three days after the “trillions” representation by Obama the industry spokesmen and trade groups represented at the president’s meetings declared that they never made such an agreement with Obama as reported by the New York Times (NYT).
An official White House response initially told the NYT that “the president misspoke.” This was followed about an hour later with another White House statement, “I don’t think the president misspoke. His remarks correctly and accurately described the industry’s commitment.”
That is not the case according to all industry sources.
Hospital, insurance, and drug and medical device manufacturers all agreed that they all disagreed with President Obama’s assessment of their (alleged) agreement. All of this within only 3 days time of the presidential announcement – a long, l-o-o-o-o-n-g way from 10 years as “agreed” upon.
Now more than one month later Obama is repeating this story. This makes him either stupid (which I don’t believe), or ignorant (as in ignoring the facts which he could be), or engaging in a big deception (i.e. a whopper of a lie).
“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie,” wrote Joseph Goebbels, Ministry of Propaganda more than 70 years ago about promotion of another national socialist party line.
The lie (or misspeak) identified here certainly does shield (or hide) at least economic and perhaps political consequences. Both the media that is supportive of Obama and conservative critics that oppose him are missing these simple details that upon a closer examination are revealed to not be intelligent.
“It is not propaganda’s task to be intelligent, its task is to lead to success,” writer Joachim Fest wrote about Goebbels in his book ‘The Face of the Third Reich’.
So far Obama’s propaganda is pointing toward success at achieving his so-called health care reform in spite of the complexity of errors in his pronouncements.
Such success for Obama would lead to changing individual independence from government into a collective in dependence on government.
Is this change we can believe in?
Christopher C. Barr writes Naturally Speaking from