The Big Pharma Racket: even the New York Times acknowledges it
The Soaring Cost of a Simple Breath
By ELISABETH ROSENTHAL, The New York Times
OCTOBER 12, 2013
Robin Levi’s two daughters both have asthma, but they are able to control it thanks to good insurance coverage. Some students Ms. Levi tutors also suffer from asthma but lack the same insurance and medical care. Sean Patrick Farrell/The New York Times; photo by Max Whittaker for The New York Times.
YOUR PERSPECTIVE
Has buying a prescription drug strained your budget or have you used a medicine more sparingly than prescribed because of cost? Tell us which drug was involved.
— ELISABETH ROSENTHAL, REPORTER
OAKLAND, Calif. — The kitchen counter in the home of the Hayes family is scattered with the inhalers, sprays and bottles of pills that have allowed Hannah, 13, and her sister, Abby, 10, to excel at dance and gymnastics despite a horrific pollen season that has set off asthma attacks, leaving the girls struggling to breathe.
Asthma — the most common chronic disease that affects Americans of all ages, about 40 million people — can usually be well controlled with drugs. But being able to afford prescription medications in the United States often requires top-notch insurance or plenty of disposable income, and time to hunt for deals and bargains.
[pullquote]The United States patent office grants new protections for tweaks to drugs without weighing the financial impact on patients.[/pullquote]
The arsenal of medicines in the Hayeses’ kitchen helps explain why. Pulmicort, asteroid inhaler, generally retails for over $175 in the United States, while pharmacists in Britain buy the identical product for about $20 and dispense it free of charge to asthma patients. Albuterol, one of the oldest asthma medicines, typically costs $50 to $100 per inhaler in the United States, but it was less than $15 a decade ago, before it was repatented.
“The one that really blew my mind was the nasal spray,” said Robin Levi, Hannah and Abby’s mother, referring to her $80 co-payment for Rhinocort Aqua, a prescription drug that was selling for more than $250 a month in Oakland pharmacies last year but costs under $7 in Europe, where it is available over the counter.
The Centers for Disease Control and Prevention puts the annual cost of asthma in the United States at more than $56 billion, including millions of potentially avoidable hospital visits and more than 3,300 deaths, many involving patients who skimped on medicines or did without.
“The thing is that asthma is so fixable,” said Dr. Elaine Davenport, who works in Oakland’s Breathmobile, a mobile asthma clinic whose patients often cannot afford high prescription costs. “All people need is medicine and education.”
What $250 worth of prescription asthma drugs buy around the world
With its high prescription prices, the United States spends far more per capita on medicines than other developed countries. Drugs account for 10 percent of the country’s $2.7 trillion annual health bill, even though the average American takes fewer prescription medicines than people in France or Canada, said Gerard Anderson, who studies medical pricing at the Bloomberg School of Public Health at Johns Hopkins University.
Americans also use more generic medications than patients in any other developed country. The growth of generics has led to cheap pharmacy specials — under $7 a month — for some treatments for high cholesterol and high blood pressure, as well as the popular sleeping pill Ambien.
But many generics are still expensive, even if insurers are paying the bulk of the bill. Generic Augmentin, one of the most common antibiotics, retails for $80 to $120 for a 10-day prescription ($400 for the brand-name version). Generic Concerta, a mainstay of treating attention deficit disorder, retails for $75 to $150 per month, even with pharmacy discount coupons. For some conditions, including asthma, there are few generics available.
While the United States is famous for break-the-bank cancer drugs, the high price of many commonly used medications contributes heavily to health care costs and certainly causes more widespread anguish, since many insurance policies offer only partial coverage for medicines.
In 2012, generics increased in price an average of 5.3 percent, and brand-name medicines by more than 25 percent, according to a recent study by the Health Care Cost Institute, reflecting the sky-high prices of some newer drugs for cancer and immune diseases.
While prescription drug spending fell slightly last year, in part because of the recession, it is expected to rise sharply as the economy recovers and as millions of Americans become insured under the Affordable Care Act, said Murray Aitken, the executive director of IMS Health, a leading tracker of pharmaceutical trends.
Unlike other countries, where the government directly or indirectly sets an allowed national wholesale price for each drug, the United States leaves prices to market competition among pharmaceutical companies, including generic drug makers. But competition is often a mirage in today’s health care arena — a surprising number of lifesaving drugs are made by only one manufacturer — and businesses often successfully blunt market forces.
Asthma inhalers, for example, are protected by strings of patents — for pumps, delivery systems and production processes — that are hard to skirt to make generic alternatives, even when the medicines they contain are old, as they almost all are.
The repatenting of older drugs like some birth control pills, insulin and colchicine, the primary treatment for gout, has rendered medicines that once cost pennies many times more expensive.
“The increases are stunning, and it’s very injurious to patients,” said Dr. Robert Morrow, a family practitioner in the Bronx. “Colchicine is a drug you could find in Egyptian mummies.”
Pharmaceutical companies also buttress high prices by choosing to sell a medicine by prescription, rather than over the counter, so that insurers cover a price tag that would be unacceptable to consumers paying full freight. They even pay generic drug makers not to produce cut-rate competitors in acontroversial scheme called pay for delay.
Thanks in part to the $250 million last year spent on lobbying for pharmaceutical and health products — more than even the defense industry — the government allows such practices. Lawmakers in Washington have forbidden Medicare, the largest government purchaser of health care, to negotiate drug prices. Unlike its counterparts in other countries, the United States Patient-Centered Outcomes Research Institute, which evaluates treatments for coverage by federal programs, is not allowed to consider cost comparisons or cost-effectiveness in its recommendations. And importation of prescription medicines from abroad is illegal, even personal purchases from mail-order pharmacies.
“Our regulatory and approval system seems constructed to achieve high-priced outcomes,” said Dr. Peter Bach, the director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center. “We don’t give any reason for drug makers to charge less.”
And taxpayers and patients bear the consequences.
California’s Medicaid program spent $61 million on asthma medicines last year, paying more than $200 — not far from full retail price — for many inhalers. At the Breathmobile clinic in Oakland, the parents of Bella Buyanurt, 7, fretted about how they would buy her medications since the family lost Medicaid coverage. Barbara Wolf, 73, a retired Oakland school administrator covered by Medicare, said she used her inhaler sparingly, adding, “I minimize puffs to minimize cost.”
‘A Frustrating Saga’
Hannah and Abby Hayes were admitted to the hospital on separate occasions in 2005 with severe shortness of breath. Oakland, a city subject to pollution from its freeways and a busy seaport, has four times the hospital admission rate for asthma as elsewhere in California.
The asthma rate nationwide among African-Americans and people of mixed racial backgrounds is about 20 percent higher than the average.
Hannah and Abby Hayes discuss activities they can enjoy because of the drugs they take to manage their asthma.Sean Patrick Farrell/The New York Times; Photo by Max Whittaker for The New York Times
Robin Levi, a Stanford-trained lawyer who works for Students Rising Above, a group that helps low-income students attend college, is black. Her husband, John Hayes, an economist, is white. Their daughters have allergic asthma that is set off by animals, grass and weeds, but they also get wheezy when they have a cold.
“That first year, I had to take a lot of time from my job to deal with the asthma drugs, the prices, arguing with insurers — it was a frustrating saga,” Ms. Levi said.
For decades, the backbone of treatment for asthma has centered on inhaled medicines. The first step is a bronchodilator, which relaxes the muscles surrounding small airways to open them. For people who use this type of rescue inhaler frequently, doctors add an inhaled steroid as a maintenance drug to prevent inflammation and ward off attacks. The two medicines are often mixed in a single combination inhaler for adults, and these products are especially pricey. In addition, many patients, particularly children, take pills as well as nasal sprays that calm allergies that set off the condition.
[pullquote]In Germany, regulators set drug wholesale and retail prices. Across Europe, national health authorities refuse to pay more than their neighbors for any drug. In Japan, the price of a drug must go down every two years. Drug prices in the United States are instead set in hundreds of negotiations by hospitals, insurers and pharmacies with drug manufacturers, with deals often brokered by powerful middlemen called group purchasing organizations and pharmacy benefit managers, who leverage their huge size to demand discounts. The process can get nasty; if mediators offer too little for a given product, manufacturers may decide not to produce it or permanently drop out of the market, reducing competition.[/pullquote]
While on medication, neither Hayes girl has been in the hospital since her initial diagnosis. Their mother tweaks dosing, adding extra medicine if they have a cold or plan to ride horses.
For most patients, asthma medicines are life-changing. In economic terms, that means demand for the medicines is inelastic. Unlike a treatment for acne that a patient might drop if the price became too high, asthma patients will go to great lengths to obtain their drugs.
For pharmaceutical companies, that has made these respiratory medicines blockbusters: the two best-selling combination inhalers, Advair and Symbicort, had global sales of $8 billion and $3 billion last year. Each inhaler, typically lasting a month, retails for $250 to $350 in the United States.
Asked to explain the high price of inhalers, the two major manufacturers say the calculus is complicated.
“Our pricing is competitive with other asthma treatments currently on the market,” Michele Meixell, the United States spokeswoman for AstraZeneca, which makes Symbicort and other asthma drugs, said in an e-mail. She added that low-income patients without insurance could apply for free drugs from the company.
Juan Carlos Molina, the director of external communication for GlaxoSmithKline, which makes Advair, said in an e-mail that the price of medicines was “closely linked to this country’s model for delivery of care,” which assumes that health insurance will pick up a significant part of the cost. An average co-payment for Advair for commercially insured patients is $30 to $45 a month, he added.
Even with good insurance, the Hayeses expect to spend nearly $1,000 this year on their daughters’ asthma medicines; their insurer spent much more than that. The total would have been more than $4,000 if the insurer had paid retail prices in Oakland, but the final tally is not clear because the insurer contracts with Medco, a prescription benefits company that negotiates with drug makers for undisclosed discounts.
READERS’ PERSPECTIVES
Whether you have asthma or another condition that requires a prescription, describe the strategies you have used to keep your drug costs manageable.
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Ron T Huntington 11 hours ago
epinephrine that had many unpleasant side effects but was at least an effective remedy for those who could not afford prescription treatments.
As drugs age and lose patent protection, the costs of treatment can fall significantly because of generic competition — particularly if a pill has only one active ingredient and is simple to replicate. When Singulair, a pill the Hayes girls take daily to blockallergic reactions in the lungs, lost its patent protection last year, generics rapidly entered the market. The price of the drug has already dropped from $180 per month to as low as $15 to $20 with pharmacy coupons.
But sprays, creams, patches, gels and combination medicines are more difficult to copy exactly to make a generic that meets Food and Drug Administration standards. Each time a molecule is put in a new inhaler or combined with another medicine, the amount delivered into the lungs or through the skin may change, even though that often has an imperceptible effect on patients.
“Drug companies can switch devices and use different combinations, and it becomes quite difficult to demonstrate equivalence,” Dr. Norman said, adding that inhaler makers have exploited such barriers to increase sales of medicines long after the scientific novelty has passed.
Obstacles for Generics
Samuel Ayela, 5, blows into a spirometer operated by Spencer Wear, a nurse and operations manager of the Breathmobile, an asthma clinic in Alameda, Calif., whose patients often cannot afford prescriptions.Jason Henry for The New York TimesA result is that there are no generic asthma inhalers available in the United States. But they are available in Europe, where health regulators have been more flexible about mixing drugs and devices and where courts have been quicker to overturn drug patent protection.
“The high prices in the U.S. are because the F.D.A. has set the bar so high that there is no clear pathway for generics,” said Lisa Urquhart of EvaluatePharma, a consulting firm based in London that provides drug and biotech analysis. “I’m sure the brands are thrilled.”
The F.D.A. acknowledges that the lack of inhaled generic medicines, as well as topical creams, has been costly for patients, but it attributes that to “difficult, longstanding scientific challenges,” since measuring drug activity deep into the lung is complicated, said Sandy Walsh, a spokeswoman for the agency. Dr. Robert Lionberger, the agency’s acting deputy director in the office of generic drugs, said that research into the development of generic inhaled medicines was the agency’s highest priority but that the effort had been stalled because of budget cuts imposed by Congress.
Even so, experts say, a significant problem is that none of the agencies that determine whether medicines come to market in the United States are required to consider patient access, affordability or need.
The Food and Drug Administration has handed out patents to reward drug makers for conducting formal safety and efficacy studies on old drugs that had not been so scrutinized. That transformed cheap mainstays of treatment like colchicine for gout and intravenous hydroxyprogesterone for preterm labor into high-priced branded products, costing $5 a pill and $1,500 per dose.
For its part, the United States patent office grants new protections for tweaks to drugs without weighing the financial impact on patients.
For example, with the patent for the older oral contraceptive Loestrin 24Fe about to expire, the company Warner Chilcott stopped making the pill this year and introduced a chewable version — with a new patent and an expensive promotional campaign urging patients and doctors to switch. While many insurance plans covered the popular older drug with little or no co-payment, they often exclude the new pills, leaving patients covering the full monthly cost of about $100. Patients complained that the new pills tasted awful and were confused about whether they could just be swallowed.
“Drug patents are easy to get, and the patent office is deluged,” said Dr. Aaron Kesselheim, a pharmaceutical policy expert at Harvard Medical School. “The F.D.A. approves based on safety and efficacy. It doesn’t see its role as policing this process.”
For asthma patients in the United States, the best the market has yielded are a few faux generics that are often only marginally cheaper than the brand-name versions. AstraZeneca, for example, has an agreement with Teva Pharmaceuticals, a generic manufacturer, to make an approved generic version of its Pulmicort Respules, an asthma medicine for home inhalation treatments. Teva paid AstraZeneca more than $250 million last year in royalties to make a generic, which sells for about $200 for a typical monthly dose, compared with close to $300 for the branded product.
READERS’ PERSPECTIVES
The Affordable Care Act expands health insurance but does not set price controls on prescription drugs or medical procedures. How will the health care overhaul help you and others, or fall short?
SELECTED RESPONSES-
JAmes Demers New York 15 hours ago
Anybody who has a need for expensive drugs is going to either pay a high premium for a high-level plan, or pay a lot of money out of pocket if they get a low-level plan. The ACA provides no escape. The problem is that just about every other country on the planet sets limits on drug prices, and drug companies make up for those artificially low prices by charging that much more to U.S. patients.
Research vs. Marketing
There are good reasons drug companies are feeling threatened. In the last several years, some best-selling medicines, like Lipitor for high cholesterol and Plavix for blood thinning, have been largely replaced by cheap generics in a very competitive market. In 2012, that led to $29 billion in savings for patients, said Mr. Aitken of IMS, or $29 billion in lost revenues for drug makers. Eighty-four percent of prescriptions dispensed last year were for generic medications.
While drug companies generally remain highly profitable, recent trends have meant tough times for some companies, including Merck, whose profits crashed 50 percent this year primarily because the patent expired on its best-selling asthma pill, Singulair.
So AstraZeneca has recently spent millions of dollars in court pursuing several small drug companies for patent infringement after they announced a plan to make a true cheap generic version of Pulmicort Respules. Though a New Jersey judge sided with the generic manufacturers this spring, legal appeals by AstraZeneca will keep the generics off the market for the near future.
As insurance policies require patients to contribute more out of pocket for medicines, public pressure to curb prices has grown. This year, more than 100 top cancer specialists protested the rising prices of cancer treatments.
Drug companies have long argued that pharmaceutical pricing reflects the cost of developing and testing innovative new drugs, many of which do not pan out or make it to market.
“When there’s a really innovative product, you might be able to justify the price,” Dr. Kesselheim said. “But this is not generally the case.”
Critics counter that drug companies spend far more on marketing and sales than the 15 percent and 20 percent of their revenues that they devote to research and development.
In the United States, one of the few Western countries that allows advertising of prescription drugs to consumers, GlaxoSmithKline spent $99 million in advertising for Advair in 2012. Despite its financial woes, Merck spent $46.3 million to advertise its steroid spray, Nasonex, according to fiercepharma.com, a Web site that tracks the industry’s advertising.
Also, the focus of much pharmaceutical research in recent years has shifted from simple drugs for common diseases that would have widespread use to complicated molecules that would most likely benefit fewer patients but carry far higher price tags, in the realm of tens of thousands of dollars.
The newest offering for asthma is Novartis’s Xolair, which is given by injection in a doctor’s office every two weeks at a cost of up to $1,500, depending on the dose. Because the drug is so expensive and was deemed to have little or no benefit over inhalers for a vast majority of patients, the British government last year announced that it would not make it available through the National Health Service. It relented this year, agreeing to stock it for limited use, after the manufacturer offered a confidential discount.
In all other developed countries, governments similarly use a variety of tools to make sure that drug manufacturers sell their products at affordable prices. In Germany, regulators set drug wholesale and retail prices. Across Europe, national health authorities refuse to pay more than their neighbors for any drug. In Japan, the price of a drug must go down every two years.
Drug prices in the United States are instead set in hundreds of negotiations by hospitals, insurers and pharmacies with drug manufacturers, with deals often brokered by powerful middlemen called group purchasing organizations and pharmacy benefit managers, who leverage their huge size to demand discounts. The process can get nasty; if mediators offer too little for a given product, manufacturers may decide not to produce it or permanently drop out of the market, reducing competition.
With such jockeying determining supply, products can simply disappear and prices for vital medicines can fluctuate far more than they do for a carton of milk. After the price of Abby Hayes’s Rhinocort Aqua nasal spray rose abruptly, it was unavailable for many months. That sent her family scrambling to find other prescription sprays, each with a price tag over $150.
This year the price of Advair dropped 10 percent in France, but in pharmacies in the Bronx, it has doubled in the last two years.
In Georgia, Ms. Solod, the freelance writer, found the same thing. “Every time I get Advair, the price is different,” she said. “And the price always goes up. It never comes down.”
Twenty years ago, drugs that could safely be sold directly to patients typically moved off the prescription model as their patent life ended. That brought valuable medicines like nondrowsy antihistamines and acid reducers to drugstore shelves. But with profitable prescription products now selling for $100 per tiny bottle, there is little incentive to make the switch, since over-the-counter drugs rarely succeed if they cost more than $20.
Donzahnya and Kemmoni Pitres discuss their allergies, asthma and the drugs they take to keep their diseases in check. Sean Patrick Farrell/The New York Times; Photo by Jason Henry for The New York Times
As a result, a number of products that are sold directly to patients in other countries remain available only by prescription in the United States. That includes a version of the popular but expensive steroid nasal spray used by Abby Hayes, which is available over the counter in London for under $15 at the Boots pharmacy chain.
“Not only is the cost cheaper, but it doesn’t require a doctor’s visit to get it,” said Dr. Jan Lotvall, a professor of allergy and immunology at the University of Gothenburg in Sweden, where steroid nasal sprays are also available over the counter.
During this high pollen season, Abby had to cut short a gymnastics practice, and her sister, Hannah, missed one day of school because of breathing problems, the first time in many years. But with parents who can afford to get the medicine they require, both are now doing fine.
That is not true of two other sisters from Oakland whom their mother mentors. With treatment hard to access and drug prices high, Kemonni and Donzahnya Pitre, 19 and 17, simply suffer and struggle to breathe.
As Donzahnya, a high school senior, looked through the Fiske Guide to Colleges at the Hayeses’ kitchen table one day, she had an unusual selection criterion: “I worry about going to a college that’s surrounded by a lot of grass.”
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A version of this article appears in print on October 13, 2013, on page A1 of the New York edition with the headline: The Soaring Cost of a Simple Breath.
READERS’ PERSPECTIVES
Please visit the New York Times’ original piece for live links and further information on this topic.
How you and others responded.
Whether you have asthma or another condition that requires a prescription, describe the strategies you have used to keep your drug costs manageable.
390 READER RESPONSES (WE PRESENT BELOW ONLY A SAMPLER. Visit original article for complete details.
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Bob C Thomaston CT, United States Asthma Patient
I have asthma. I will not use advair due to the cost. I have a similar product, a cortizone based inhaler that is less expensive for the management of my asthma. Also, my most severe asthma is triggered in the fall and ends after a heavy frost. I wait until late summer/early fall to renew my prescription. Until then I use a generic inhaler.
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John Sunnygard Denver, United States
I am insured, $3,000 family deduction.So, i pay $225 for Advair ($7.00/day to BREATHE!) with discount for the first couple of months until the deduction is reached. My kids have prescriptions, the beginning of the plan year goes on credit cards so we have an interest penalty on top of extortive prices. I will often use Advair only once, not prescribed twice a day to make work. I am very healthy, commute to work by bike and need medication for exercise. In UK, i paid $6!
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Ron T Huntington, United States Asthma Patient
I never take as much as prescribed, I only use Albuterol if I’m really in trouble, I take cheaper meds that don’t work well. I also go to doctors as little as possible and seldom fill prescriptions unless I’m desperate. Sometimes the doctor has samples. I’ve tried the ‘free’ or reduced price programs, some of which help. I tried Qnasl – their ‘under $25’ program saved me $5. Actual cost to the pharmacy for a few dollars of med – close to $200.
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Steve K. Santa Fe, United States Asthma Patient
I’ve purchased abroad and had friends and family do the same. On occasion, I’ve accepted slightly out of date medicines from friends who have prescription plans. I’ve also bought online when needed.
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Katie S Barrie, Canada Asthma Patient
Whenever I travelled abroad I would stock up on my prescriptions – often available over the counter in other countries. The $250 Advair in the Sates was $20 OTC in India. Even then I would use it sparingly to make it last. Now I’m in Canada and, without supplemental insurance, the meds are still pricey – $100 for the Advair – but cheaper than the US.
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Denise Glynn Lakewood, United States Asthma Patient
I go to several pharmacies for my medications this confuses my doctor but I get whatever drug at whatever pharmacy is cheapest. I only use my flonase and inhaler when i feel I really,really need it. even on my drug plan they are each $40. I just don’t have an extra $80 a month.
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Tracy T Chicago, United States Asthma Patient
I’ve taken Advair for the past eight years and always wondered when a generic version would be available. I have great insurance, but seeing that the cost to my insurer was more than $175 per month was shocking, as I try to do my part in containing costs. My doctor leveled with me on this – I still take Advair but use coupons and samples whenever possible to reduce the cost. It’s terrible and tragic that there are so many in this country whose lives are at risk to keep profits on asthma drugs high.
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Jack D. Philadelphia, Pennsylvania, United States
I mail order my allergy nasal spray from New Zealand, where it is available without a prescription. The cost is around $12/bottle – maybe 20% of the US price and the product is identical – I think they actually make it in the US, send it to NZ and then I buy it back again. Something is seriously wrong with the US system and Obamacare doesn’t seem to have addressed it at all. The excuse that they need the $ for research is non-sense. I refuse to pay for ads featuring talking bees with Spanish accents.
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alice F sonoma, CA, United States Asthma Patient
I have Medicare and supplemental Blue Cross with no drug prescription benefit, so I buy necessary medications in Canada. An albuterol inhaler is $53 at my local CVS; it is $9 in Canada . It’s an outrage, no?
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Anne J Dallas, United States Uninsured Asthma Patient
Over the years I have done a variety of things…including buying graymarket pharma from the internet-so far I have always had good results with Indian pharmaceuticals. Gotta keep up my oxygen habit.
ObamaCare: Worse Than Doing Nothing?
Dr. Young with Obama, in more trusting days.
That’s the conclusion of single payer advocate Dr. Quentin Young, national coordinator for Physicians for a National Health Program (PNHP), in his just released autobiography – Everybody In, Nobody Out: Memoirs of a Rebel Without a Pause.
“Had I been in Congress, I would have unequivocally voted against Obamacare,” Young writes. “It’s a bad bill. Whether it’s worse than what we have now could be argued. We rather think because of its ability to enshrine and solidify the corporate domination of the health system, it’s worse than what we have now. But whether it is somewhat better or a lot worse is immaterial. The health system isn’t working in this country — fiscally, medically, socially, morally.”
Young rejects the idea that President Obama should have compromised on single payer in the face of industry opposition.
“I don’t have any sympathy for the idea that the president had to compromise because his opposition was strong,” Young writes. “Winning is not always winning the election. Winning is making a huge fight and then taking the fight to the people — re-electing people who are supporting your program and defeating those who aren’t.”
Young first met the young Barack Obama in the mid-1990s at social gatherings.
At the time, Obama was lecturing at the University of Chicago Law School and practicing law.
“We did not become bosom buddies after a few of these social gatherings — I just viewed him as a nice, bright guy living in the neighborhood,” Young says.
When Obama ran for the Illinois Senate, Young supported him.
“I was happy with his views on health care,” Young writes. “He recognized that major reform was necessary and indicated support for a single-payer approach. No blushing friend, I took every opportunity to solidify his position. While not an official adviser, I tried to influence him as much as I could. My colleagues and I sent him notes touting the advantages of single-payer and the form it might take and talked with him and his staff about it whenever I had the chance.”
“I felt I did influence him,” Young said.
When Obama ran for the Senate in 2003, Obama told the Illinois AFL-CIO:
“I happen to be a proponent of a single payer universal health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its Gross National Product on health care cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out. A single payer health care plan, a universal health care plan. And that’s what I’d like to see. But as all of you know, we may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, and we have to take back the House.”
But just a year later, Obama had flipped and came out against single payer in Illinois.
“I was very disappointed by his move to the right to keep the insurance companies in command,” Young told the Springfield State Journal Register in 2004. “I’m not accusing him of lying or misconduct. I’m accusing him of a lack of courage.”
But despite Obama’s “lack of courage,” Young supported Obama in his run for U.S. Senate and later for president. Young was just setting himself up for more disappointment.
At a town hall meeting in Portsmouth, New Hampshire in August 2009, Obama was asked whether he supported a universal health care plan.
“First of all, I want to make a distinction between a universal plan versus a single-payer plan, because those are two different things,” Obama said.
“A single-payer plan would be a plan like Medicare for all, or the kind of plan that they have in Canada, where basically government is the only person — is the only entity that pays for all health care. Everybody has a government-paid-for plan, even though in, depending on which country, the doctors are still private or the hospitals might still be private. In some countries, the doctors work for the government and the hospitals are owned by the government. But the point is, is that government pays for everything, like Medicare for all. That is a single-payer plan.”
“I have not said that I was a single-payer supporter because, frankly, we historically have had a employer-based system in this country with private insurers, and for us to transition to a system like that I believe would be too disruptive. So what would end up happening would be, a lot of people who currently have employer-based health care would suddenly find themselves dropped, and they would have to go into an entirely new system that had not been fully set up yet. And I would be concerned about the potential destructiveness of that kind of transition.”
“All right? So I’m not promoting a single-payer plan,” Obama said.
In March 2010, Congress passed the Affordable Care Act — Obamacare — by a narrow margin.
“PNHP’s policy experts did a line-by-line examination of the bill and, while acknowledging that it contains some modest benefits that make changes around the edges of our existing system, basically gave it two thumbs down,” Young writes. “To this day, much to the chagrin of many of our friends who wanted reform, I remain adamant in my rejection of Obamacare.”
“Why? We want a system that excludes the private insurance companies,” Young writes. “ We demand such exclusion not because these companies are good or evil (although we think they’re pretty evil). Rather, the reason to exclude them is that they don’t address the needs of the American people.”
Young also rejects the idea of a “public option,” pushed by Democrats such as Howard Dean. A public option “would not have made any significant difference on the overall impact” of Obamacare “contrary to the view of many progressive who believed that it would,” Young says.
“Since WWII, we have learned a lot about disease and certainly have had dramatic improvements in what we can do,” Young writes. “I’m talking about surgery of the heart, vaccination, nutrition issues. All these things have been largely defined in the last half-century. We’ve had something approaching a 12-year life expectancy rise just from scientific intervention.”
“We have all this knowledge, all these options, but we have a very backward financing and delivery system and the result is a great deal of human suffering,” Young says. “And that’s why we remain opposed to the Affordable Care Act. We think we have a winning proposition despite the reality in Congress. Polls repeatedly vindicate our position. A solid majority of the public and 59 percent of doctors support the single payer approach.”
“President Obama could have made it happen,” Young says. “He could have stuck to all the virtues of single payer. And I won’t deny he may have been defeated in the first round. There’s no question that this fight has been dirty and it’s going to get dirtier.”
ABOUT THE AUTHOR
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. He is also founder of singlepayeraction.org, and editor of the website Morgan County USA.
ObamaCare is Another Private Sector Rip-Off
The government of the “world’s only superpower,” the “exceptional,” the “indispensable” country, claims to know what is best for Syria, Iraq, Afghanistan, Libya, Yemen, Pakistan, Somalia, Mali, Russia, Venezuela, Bolivia, Ecuador, Brazil, China, indeed for the entire world. However, the “indispensable” country cannot even govern itself, much less the world over which the “superpower” desires hegemony. The government of the “world’s only superpower” has shut itself down.
The government has shut itself down, because it cannot deal with the budget deficit and mounting public debt caused by twelve years of wars, by financial deregulation that allows “banks too big to fail” to loot the taxpayers, and by the loss of jobs, GDP, and tax base that jobs offshoring forced by Wall Street caused.
The Republicans are using the fight over the limit on new public debt to block Obamacare. The Republicans are right to oppose Obamacare, but they are opposing Obamacare largely for ideological reasons when there are very good sound reasons to oppose Obamacare.
Last February 3, I posted on this website a column, “Obamacare: A Deception,” written by an expert on the subject.
When Republicans for ideological reasons blocked a single-payer health system like the rest of the developed world has and, indeed, even some developing countries have, the Obama regime, needing a victory, went to the insurance companies and told them to come up with a health care plan that the insurance lobby could get passed by Congress. Obamacare was written by the private insurance industry with the goal of raising its profits with 50 million mandated new customers.
Obamacare works for the insurance companies, but not for the uninsured. The cost of using Obamacare is prohibitive for those who most need the health coverage. The cost of the premiums net of the government subsidy is large. It amounts to a substantial pay cut for people struggling to pay their bills. In addition to the premium cost, it is prohibitive for hard pressed Americans to use the policies because of the deductibles and co-pays. For the very poor, who are thrown into Medicaid systems, any assets they might have, such as a home, are subject to confiscation to cover their Medicaid bills. The only people other than the insurance companies who benefit from Obamacare are the down and out who are devoid of all assets.
[pullquote]For millions of employees, Obamacare means cut hours and less take home pay plus out-of-pocket expenses to purchase an Obamacare health policy. For most people covered by Obamacare, this is a lose-lose situation.[/pullquote]
This might prove to be a growing percentage of Americans. On September 19 the New York Times on the front page of 
the business section reported what I have reported for years: that real median family incomes in the US are where they were a quarter of a century ago. In other words, in a quarter of a century there has been no income growth for the median American family.
In 2013 payroll employment is below where it was six years ago. During 2013 most of the new jobs, barely sufficient to stay even with population growth and insufficient to recover the job loss from the recession, have been part-time jobs that do not provide any discretionary income with which to drive a consumer economy.
Obamacare has resulted in the health insurance companies, who thought that they would be living in high profits from the mandated health coverage, being outsmarted by employers, who have reduced their full-time workers to part-time in order to avoid Omamacare’s requirement to provide health coverage to those employees who work 30 hours a week or more.
Employers can get away with this, because jobs are hard to find. The lack of employment opportunities results in Americans with engineering degrees working as retail sales clerks and as shelf stockers in Walmart and Home Depot. Despite the abundance of unemployed and under-employed American technical and engineering workers, the large corporations lobby Congress for more H-1B visas to bring in lowly paid foreigners with the argument that there is a shortage of qualified Americans for technical work.
As I have pointed out so many times, if there were a shortage of engineering and technical workers, salaries would be rising, not falling.
For millions of employees, Obamacare means cut hours and less take home pay plus out-of-pocket expenses to purchase an Obamacare health policy. For most people covered by Obamacare, this is a lose-lose situation.
It is also a lose-loss situation for the vast majority of the young. Most young people, unless they have jobs that provide health coverage, do without it, because the chances of the young having heart attacks, cancer, and other serious health problems is low.
Obamacare, however, requires the healthy young to pay premiums for coverage or to pay a penalty to the IRS.
In my day this might not have been a problem. However, today there are few jobs for the young that pay enough to have an independent existence. The monthly payroll jobs reports do not show well-paying jobs. The Labor Department’s projections of future jobs are not jobs that pay well. For the youth, it seems that the penalty is less than the premium, so youthful penalties paid out of waitress and bartender tips will subsidize the unusable Obamacare health policies for the poor adults who are not thrown into Medicaid, which confiscates their assets, if any.
Obamacare benefits only two classes of people. It benefits employers who drop their employees working hours below the hours specified for Obamacare coverage, and it benefits the insurance companies or the IRS who collect the premiums and penalties.
Many of the people who pay the premiums won’t be able to use the policies because of co-pays and deductions.
The very poor with no assets might receive health care if they reside in states that accept the Medicaid provisions of Obamacare.
In 21st century America, the few people who have experienced income gains are the executives and shareholders of firms who offshored their production for US markets, Wall Street which makes bets covered by the Federal Reserve, and the military-security complex which has been enriched by the neoconservatives’ wars.
Every other American has lost.
Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal. His latest book The Failure of Laissez-Faire Capitalism. Roberts’ How the Economy Was Lost is now available from CounterPunch in electronic format.
The GOP Takes Its Clothes Off in Public: It’s Not a Pretty Sight, Even for Some Republicans
STEVEN JONAS, MD
very best.
Nothing much happened domestically under Jimmy Carter, although I myself heard him pledge, at the annual meeting of the American Public Health Association in 1976, that by the end of his first term, a comprehensive national health insurance program would be in place. From the time of Ronald Reagan onward there have been no comprehensive progressive domestic policy reforms, although there have been some negative ones, like the “end of welfare as we know it” and “the days of ‘big government’ are over” under Clinton. All of this time the Republican Party’s mantra, whether in the White House or not, has been mainly characterized by “lower taxes” (no matter how much they might have been already lowered) and “smaller government” (except of course for big-government programs that they just love like the keeping military-industrial complex humming along, fighting the so-called “drug war,” providing huge subsidies to the petroleum industry and factory farmers, and so on and so forth). But they were never public, or very public, about their true agenda. They always tried to keep the focus on “lower taxes, smaller government,” with of course lots of push on the distractive issues of religious determinism, like opposition to abortion rights and gay marriage.
And so now we come to the current fight over the present Continuing Resolution to keep the federal government functioning, which, as of the time of this writing (October 1) has led to the shutdown of most of its operations. The House GOP, led by its most far-right, so-called “Tea Party” members, has made killing “Obamacare” their price for approving a continuing resolution to keep the Federal government functioning for another six weeks or so. They want to achieve by this tactic what they could not achieve through the electoral and conventional legislative processes. But earlier in the confrontation, they revealed a much broader agenda for specific policies than they usually put before the electorate:
1. Approve of the Keystone XL oil pipeline.
2. Weaken the Consumer Financial Protection Bureau.
3. Delay implementation of Obamacare for one year.
4. Cut $120 billion from federal health programs over the next decade.
5. Increase offshore oil drilling and energy production on federal lands.
6. Block federal regulation of greenhouse gas emissions.
7. Restrict most forms of federal industry regulation.
And with this list, they suddenly took off their clothes, showing their real priorities and interests.
[pullquote] The Republicans are scared of the slightest improvement, no matter how feeble or treacherous, over the current mess that passes for healthcare in the US, lest it show the public how corrupt the old system was. —Eds. [/pullquote]
A quick read shows the industries which the implementation of these policies would benefit and which consumer/worker/overall national interests it would harm, in many cases most grievously. The GOP has sponsored such policies for decades, as pointed out above. But they rarely put them up front and center on the political table. While for the moment they have cut back to just killing Obamacare, the Democrats should waste no time in going after this true agenda (but of course, for the most part, the Democrats, other than folks like Elizabeth Warren and Alan Grayson aren’t). One must give the President credit, however, for at least digging in his heels on the attempt of the GOP to achieve through fiscal blackmail what they could not achieve through politics and the Democratic process: repeal of Obamacare.
But they have taken off their clothes about more than what they are really about. What they are really scared of about Obamacare is not that it is bad law or will cost so much money (the Joe Scarborough mantra). What they are most concerned about is that it will actually work and that even by the 2014 elections they will be taking a very hard hit for having opposed it, even beyond the end of the usual legislative/electoral political process, putting the nation at such risk (e.g., at last look, about 3,000 flight safety inspectors had been furloughed). If in fact what they were really concerned about is the nation’s future fiscal health (as Joe Scarborough tells us over and over again, all the time talking over and around the estimable [on this issue at least] Mika Brzezinski), there’s always raising taxes the wealthy, introducing new taxes that could secure huge amounts of money for the federal treasury, e.g., the stock market transaction tax, and then major cuts in the federal big-money programs that the GOP loves so much (see above). But that won’t happen.
And so, the “moderate” (ho, ho, ho) House Republicans tell us that what they are afraid of is primary challenges from the “Tea Party” should they vote for rationality on the continuing resolution matter and then on the perhaps more important debt ceiling increase that is just around the corner. Well yes, many of them would face such challenges, but the overall national leadership of the GOP is just as afraid of them as any individual House member is. For in the highly gerrymandered districts inhabited by so many Republicans in the House, many of those challenges would be effective. But then, in the general election, given decent Democratic candidates with some money from the DNC, even in gerrymandered districts, as happened in a few elections in 2010 and 2012, the far-rightists might be so far-right, that Democrats might be able to take over the House. To say nothing of what it might do to GOP chances in the state–wide elections for Governor and Senator. Then there’s Ted Cruz and 2016. A big OY! on that one.
This does not bode well for national policy (and believe me, as a long-time supporter of “single-payer” health reform I am not a big fan of Obamacare), for fiscal health, and, when the next debt ceiling fight comes along, for the status of the US as a nation that stands behind its debt-obligations. And so do stay tuned for more even than that: in addition to the future health of the nation and the many presently un- or under-insured who would benefit under Obamacare, even with gerrymandering and organized voter-suppression, the Republican Party might be so bagged with the “Tea Party,” that its future health might also be at stake.
Finally, the GOP may well come to have buyer’s remorse for whatever they paid to the slogan-smith (Frank Luntz?) who came up with the term “Obamacare” as a substitute for its short legislative name, the “Affordable Care Act.” If the President wins this one, and Obamacare goes into effect, and if it achieves the modest levels of improvement in health and health care that it is capable of, his name will forever be on the most important piece of domestic legislation passed by Congress since Medicare. Not good news for the GOP, perhaps even years down the road.
(Image: Jared Rodriguez / t r u t h o u t; Adapted: j-fi, Gage Skidmore)
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ABOUT THE AUTHOR
Senior TGP editor Steven Jonas, MD, MPH is also Professor of Preventive Medicine at Stony Brook University (NY) and author/co-author/editor/co-editor of over 30 books. In addition to that he’s a columnist for BuzzFlash at Truthout, and Editorial Director of and a Contributing Author to The Political Junkies for Progressive Democracy. Dr. Jonas’ latest book is The 15% Solution: How the Republican Religious Right Took Control of the U.S., 1981-2022: A futuristic Novel, Brewster, NY, Trepper & Katz Impact Books, Punto Press Publishing, 2013, and available on Amazon.
The Obamacare fraud and the case for socialized medicine
Kate Randall, wsws.org
Obamacare is an abomination, but the rightwing vision of it as a socialist system (as this poster suggests) is undiluted imbecility or propaganda calculated to mislead. In truth Obamacare is a calamitous capitalist patchwork of half measures ultimately benefitting the insurance industry and Big Pharma.
After years of promotion, lobbying and political wrangling, health insurance exchanges are opening for business today across the country as part of the Patient Protection and Affordable Care Act (ACA). Under the health care overhaul, people without health insurance are mandated to purchase coverage from private insurers or face a penalty. Coverage for enrollees is set to begin January 1, 2014.
The insurance exchange launch is a milestone in a process that, in the guise of “reform,” has been aimed at funneling billions of dollars into the coffers of the private health insurers and slashing costs for the government and corporations. In the end, it will leave tens of millions uninsured and others with vastly deteriorated medical services.
In his bid for the presidency, Barack Obama pledged to implement a sweeping social reform in the provision of health care in the United States. He claimed that under his plan no insurer would be allowed to deny coverage to a sick child, or an individual with a preexisting condition; no family would go bankrupt or hungry due to health care costs; and that the insurance companies would be held to account.
The process now underway demonstrates that a colossal fraud has been perpetrated against the American population in the name of Obamacare, and that all of these promises were lies.
Any nominally progressive feature of the legislation has been long since stripped away or abandoned. But the truth of the matter is that it was neverabout improving medical care for ordinary Americans, and it was alwaysabout setting up an even more heavily class-based system of health care delivery. From the beginning, Obama promised that his “reform” would slash hundreds of billions of dollars from Medicare, and costs would be further cut by eliminating “unnecessary” treatments and services.
[pullquote] With more than 20,000 pages of regulations, Obamacare is outrageously complicated, a Rube Goldberg device designed to hide and accommodate the lobbies it truly serves: health insurance, Big Pharma and hospitals. Canada’s (single payer) healthcare law is barely 11 pages long, Cuba’s less than one page. [/pullquote]
Even after the bill’s passage, without the much-vaunted “public option,” one concession after another was made to big business: only companies with 50 or more employees would have to provide insurance, only those working 30 hours or more had to be covered. Bare-bones, “skinny” plans—without hospitalization and surgery coverage—would be considered “adequate” employee-sponsored plans. Those businesses that do not comply would face minimal penalties.
People without coverage through their employer, or from a government program such as Medicare or Medicaid, are to make up the fresh pool of captive, cash-paying customers who must fend for themselves on the insurance exchanges. Beginning today, those browsing the offerings on the new “marketplace” will confront a confusing array of plans, but with one common feature: The least expensive plans offer the lowest levels of coverage with limited choices, and the highest out-of-pocket costs.
While those shopping for insurance plans will be provided with minimal government stipends or none at all, there is no meaningful oversight over what the insurance companies can charge for coverage. If an insufficient number of young, healthy people sign up, the insurers can be expected to jack up premiums even higher to bolster their cash flow.
According to the Congressional Budget Office, the health care overhaul will leave an estimated 31 million people—about a tenth of the US population—uninsured by 2023. Undocumented workers and their families are barred from purchasing coverage on the exchanges. Due to a “family glitch” in the law, businesses are only required to provide “affordable” insurance to their employees, not to their employees’ families, so those family members will not receive subsidies to purchase coverage on the exchanges.
The very poorest people will also be ineligible in some states. While the US Supreme Court ruled the ACA constitutional, it struck down a component of the law that called for expanding Medicaid. The result is that in 21 states, many people making below the poverty level will not be eligible for either ACA subsidies or Medicaid. Still others will be forced to go without coverage because they simply cannot afford it, with or without the government subsidies.
The health care overhaul is effecting a shift in the insurance market as a whole. Some companies and municipalities are already planning to end coverage for retirees and/or active workers, dumping them onto the exchanges. Still others are ending traditional employer coverage and offering workers a defined contribution to purchase coverage on private insurance “exchanges” set up by their employers, with limited choices and high out-of-pocket costs. One in four employers are reportedly considering moving their workers to a private exchange over the next three to five years.
The health care bill is thus playing an additional insidious role, serving as a model for employers and local governments that currently provide insurance to an estimated 150 million people.
Employer-sponsored insurance, which since World War II has been the traditional way workers at most companies received coverage, is being eliminated by many employers and replaced with a voucher system. The same type of sea-change is being eyed in relation to Medicare by politicians of both big business parties, who would like to see the government-run program for millions of seniors and the disabled scrapped in favor of a voucher system.
SIDEBAR
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Senate Minority Leader Mitch McConnell points to a stack of papers representing what he claimed to be the regulations associated with President Obama’s health-care law as he speaks at the Conservative Political Action Conference (CPAC) on March 15. (Nicholas Kamm/AFP/Getty Images) “Implementation has also become a bureaucratic nightmare, with some 159 new government agencies, boards and programs busily enforcing the roughly 20,000 pages of rules and regulations already associated with this law.”— Sen. Mitch McConnell (R-Ky.), on the third anniversary of the law’s passage, March 22, 2013
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Those ostensibly liberal Obama supporters who have long championed the ACA as a progressive reform are still attempting to pull the wool over the eyes of an increasingly skeptical American public. The New York Times, which has campaigned relentlessly for cost-cutting in health care, headlined an editorial Saturday, “Dawn of a Revolution in Health Care,” writing that the legislation “Is a striking example of what government can do to help people in trouble.”
What a pack of lies! Obamacare is a thoroughly counterrevolutionary measure, crafted in the interests of the type of elite, wealthy layers that populate the Times editorial staff.
The World Socialist Web Site {along with similar progressive sites such as The Greanville Post, Cyrano’s Journal Today, Counterpunch, etc.] has told the truth about the health care reform from the beginning of the debate and warned of its reactionary nature. In opposition to the proposals of the entire political establishment, we have insisted that health care is a social right that should be provided to all, free of charge. Decisions about medical care and the well-being of society should not be subordinated to the interests of a tiny minority, who hold the rest of society hostage to their profit motives.
The wealth and technological means exist to establish a system that can provide universal, quality health care to every American. But in this most unequal of societies—where the richest one percent now monopolize more than 22 percent of all household income—the ruling elite hoard their cash while millions of Americans are plunged into poverty, are jobless or underemployed, and go uninsured.
The Obamacare catastrophe demonstrates the incompatibility of the private ownership of the means of production and the basic social rights of the working class, including health care, education, jobs, and a secure retirement. It points to the necessity of placing the entire health care industry—the insurance companies, pharmaceuticals, and the giant health care chains—on socialist foundations.
Kate Randall is a social and political commentator with the wsws.org, an information resource of the Social Equality Party.
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