Part D Price Controls Kill Jobs

IBD Editorials ^ | October 12, 2011 | SALLY PIPES

[Kaslin]

Washington faces two pressing tasks — getting a handle on escalating federal debt and addressing the country's unemployment crisis. Unfortunately, the White House, thanks to its usual ideological blinders, has come up with a plan that will actually cost jobs — even as it achieves only trifling savings.

The proposal, which Team Obama has now forwarded to the supercommittee charged with coming up with $1.6 trillion in savings over the next decade, is to extend Medicaid-style manufacturers' rebates to part of the Medicare Part D program. The proposal affects the so-called "dual eligibles," those eligible for Medicaid but who obtain their prescription coverage through Medicare Part D.

These "rebates" don't go to patients; the government collects them. In reality, they are nothing more than price controls. By doing this, the Obama administration hopes to save $135 billion over a decade. But that's just another way of saying it wants to squeeze $135 billion over 10 years out of the pharmaceutical industry, a shining example of growth in an otherwise bleak economic landscape.

It's foolish to think drug companies will respond to the revenue reduction by striking up "Hail to the Chief" and going on with business as usual. There will be adverse consequences for employment, as drug companies make painful cuts, and research and development into new treatments for such diseases as Alzheimer's and cancer also take a hit.

America is mired in economic stagnation — unemployment remains stuck at 9%, and growth is slow at best. Despite this, the pharmaceutical sector continues to create and support high-quality jobs.

[who_would_fardels_bear]

Americans pay retail so the rest of the world can purchase wholesale.

[upchuck]

If “they” want to do something to make Part D more valuable, dump the ridiculous penalty.

[newzjunkey]

That’s been the problem for at least 20 years.

[KantianBurke]

ROTFLMAO! Thanks Dubya and the GOP controlled Congress of 03 for this monstrosity. Hey Tea Party folks - where were YOU went this nonsense was coming up the pike??