States sue the federal government over the Bush drug benefit program (commentary)

Sunday, February 19, 2006 by Mike Adams, the Health Ranger Editor of NaturalNews.com (See all articles...) Tags: drug benefit program, drug discount program, drug racket

President Bush marketed his Medicare drug benefit program as a popular handout that would put more prescription drugs in seniors' pockets and more money in State coffers. But as it turns out, the drug benefit promises were completely fabricated, just like "weapons of mass destruction."

In reality, the federal drug program has turned into a national nightmare that has left hundreds of thousands of low-income seniors without prescriptions, and States actually owing the federal government hundreds of millions of dollars as payment for the fiasco.

Five states have had enough: California, Texas, Kentucky, New Jersey and Missouri. They're suing to block the federal government from billing them for the drugs that would have cost them even less under the old system!

The magnitude of hilariousness in all this is practically indescribable. I may need my own dose of meds just to stop laughing and catch my breath. First, we have the issue that hardly any of these prescription drugs are helping people in the first place, so the whole basis of this "benefit" is medical fraud to begin with.

On top of that, we have the drug monopoly system in full swing, where the FDA and Big Pharma attempt to discredit (or outlaw) anything that competes with the price-controlled U.S. drug market, thereby forcing U.S. states to overpay for drugs by as much as 10,000%. So even when states are getting reimbursed by the feds for these drugs, they're still being purchased at rip-off prices.

Next, we have the Bush / Big Pharma conspiracy, whereby the government's drug benefit program actually made it illegal for the federal government to negotiate volume discounts with drug companies. Just another Big Pharma handout? You bet.

And finally, we have the fact that the taxpayers are footing the bill for everything.

Tracking the flow of money, waste and fraud

Let's track the flow of money for prescription drugs, shall we? These numbers are just rough estimates, and this description is greatly simplified, but it gives you an idea of how the system works.

1. A U.S. pharmaceutical company manufactures a drug for arthritis pain. It buys low-cost ingredients from all over the world, combining them into a patented drug capsule that has FDA approval. The actual manufacturing cost of a 30-day supply of this drug is approximately $1.

2. This drug company sells the drugs to a drug wholesaler for $20. The drug wholesale turns around and sells it to local pharmacies for $30.

3. Now the patient shows up at a pharmacy with a prescription for a drug. She's a low-income senior, so she qualifies for the new drug benefit program. After she gets her prescription filled, the pharmacy bills Medicare $50. (Remember, this is for the same prescription that only cost $1 to manufacture.)

4. Medicare screws around with paperwork for a couple of months, adding another $50 in overhead cost, and then bills the state of California $50 for reimbursement. Total cost is now $100 (including administrative overhead).

5. The state of California gets the request and spends its own administration dollars ($25, perhaps) fumbling around with the paperwork before paying the federal government. This brings the total cost of the prescription to $50 + $50 + $25, or $125.

6. The federal government then receives payment from California and wastes more time and money processing that (another $25, perhaps). Total cost of the prescription is now $150.

So from this $1 drug, there's a total of $150 in charges billed to taxpayers. Here's how it breaks down:

California spent $75 on the drug and paperwork. All taxpayer dollars.

The federal government spent $75 on the paperwork. Also taxpayer dollars.

The drug company, which manufactured the drug for $1 and sold it for $20 walks away with roughly a 2,000% profit. (In reality, many drugs are sold at markups more like 35,000%.)

Beyond all this, the patient probably spent at least another ten hours signing up for the drug benefit program, which contains rules and requirements of such complexity that even IRS auditors were shaking their heads in frustration.

This is how a $1 drug can cost taxpayers $150 in waste, fraud and price controls while making drug companies filthy rich. If you want to know why the United States is going broke, and why General Motors can't afford its employees anymore, and why U.S. corporations are outsourcing jobs overseas like mad, this is the answer. In the United States, it costs $150 to give a patient a $1 drug that will probably harm them anyway and lead to the prescription of even more expensive drugs.

Who benefits from the Bush drug benefit program?

Remember, too, this is Bush's "benefit" program. But who does it benefit, really?

It doesn't benefit states. They hate the program and it costs them more than doing it the old way.

It doesn't benefit the federal government. It just creates more overhead and headaches.

It doesn't benefit patients. Hundreds of thousands are left without prescriptions.

It DOES benefit Big Pharma. Drug companies get paid exorbitant prices for their cheap-to-manufacture drugs, all paid for by taxpayer dollars, with no volume discounts.

The only group that benefits from the Bush drug benefit program is Big Pharma. Which, of course, was the whole point all along. Just another Bush handout to his campaign financiers.

Americans have been conned yet again

The con is on you, the U.S. taxpayer. Your tax dollars are paying for all this waste, fraud and government pork. It's your money being flushed down the toilet, all in the name of a "benefit" to voters.

You gotta love politics. In no other arena can such a huge lie be so successfully marketed to so many people. Seniors voted for this in droves. And now they're getting the government they deserve.

Remember, friends, when you vote for Washington to solve all your problems and give you something for free, the actual cost of all that is many times higher than just paying for it yourself. In an honest free market system, a patient could buy this $1 drug for maybe $5 at retail. It's a simple, direct transaction. But by the time you add in all the do-gooders, medical monopolies and campaign promises, the cost of that $1 drug has reached $150. That's how Big Government works. And nobody in the history of the United States has made Big Government bigger than President Bush.

Big Government used to be the political refuge of Democrats, but now Republicans have beat them at their own game (both Reagan and Bush were record spenders. Clinton, on the other hand, actually cut spending. Not nearly enough, but he did make major cuts.) The "game," of course, is seeing who can offer the most handouts to voters while claiming with a straight face that nobody has to pay for them. And the bigger the lie, the better it seems to go over with voters. If there's one thing Americans have learned to love, it's instant gratification that ignores future costs or consequences.

The drug benefit program was a gargantuan lie, and it may end up costing us upwards of a trillion dollars in waste, fraud and profiteering prices over the next decade. Just another friendly debt gift to your children from President Bush.