Nobody's Senator's Ads

You've seen old Herb (and he DOES look old) yapping about 'negotiating drug prices' being the best way to buy. It's true that the new Medicare drug program makes the US Government the largest drug purchaser in the known universe.

But there's more to the story:

An AP story this week describes a memo describing how an organization called Americans United intends to use "polling, television advertisements, public events and more, hoping to serve as a sort of bearer of unwelcome news about the (Medicare) program."

According to the AP story, "...The objectives of the Americans United program, according to the memo, include: Drive down support ... to minuscule levels. Mobilize a popular insurrection ... that demands real change and threatens to exact a price on members of Congress who resist" fixing the program." Fixing the program, by the way, boils down to creating the sort of single payer system that Olympia Snowe proposes and some conservative Republicans, including those who might run for President, might vote for.

The kicker is that the "...organization draws heavy financial support from organized labor, and Senate Democratic leader Harry Reid of Nevada and House Democratic leader Nancy Pelosi of California have both met with prospective donors to demonstrate their personal interest in the group's efforts."

So Herbie's not necessarily speaking as a Concerned Senator; he's speaking as a front-man for "Americans United."

But there's even more:

“What troubles me about plans to deal with prescription drug costs that involve price controls, we will have massive cost-shifting. If we have Medicare acting as the buyer for all the medicine, it may be possible for the Government to negotiate a discount. I have always said that might be possible. What troubles me about that approach is we will have the cost passed on to someone else who might be 26 or 27 -- maybe a divorced mom who has a couple of kids -- working as hard as they can, and all of a sudden they find out their prescription drug bill shoots up because Congress adopted an approach in this area that doesn’t use marketplace forces.”

So said Sen. Wyden in 1999. It's still true. Forcing the price of Product A down will not change the profit-objectives of its manufacturer; but it will likely force the manufacturer to raise the price of its Product B.