Unintended Consequences

Readers know the two blockbuster reasons pharma chained itself to GOP reps during the design of Medicare Part D: the bill's language prohibits the government from negotiating for price, and a drug benefit kills efforts to legalize drug reimportation from Canada. What if I told you there was another reason?

Many drug companies ran charitable donation programs (read: gave their drugs away for free) for the disabled and elderly. For decades, drugmakers have offered discounted or free medications to uninsured Americans or people who could not afford critical therapies.

In 2004, the 37 companies in the industry donated 22 million prescriptions worth $4.1 billion, said Ken Johnson, senior vice president for the Pharmaceutical Research and Manufacturers of America.

Now that there's a prescription benefit, companies see their out (http://insureblog.blogspot.com/2006/02/gee-we-were-only-kidding.html) from that $4.1 billion. And they're taking it. Worse yet, the Bush Administration is essentially forcing (http://www.washingtonpost.com/wp-dyn/content/article/2006/01/26/AR2006012602061.html?nav=rss_health) them to do so: Drugmakers blamed the Bush administration for issuing a legal opinion that suggests companies could run afoul of anti-kickback laws if they provide free drugs to Medicare beneficiaries.

That guidance, from the Health and Human Services Inspector General's office, warned that providing free medicine to someone enrolled in a Medicare plan could be viewed as an effort to keep the patient on that particular product, rather than a generic or cheaper version sold by a competitor.

That's mighty convenient, eh? The Administration not only arranged massive profits and contracts for pharma, but they made up a rule saying that free pharmaceuticals are "suspicious".