Obama Administration promised Billy Tauzin Health Care Reform bill won't lower drug prices.

[Eric J in MN]

http://www.nytimes.com/2009/08/06/health/policy/06insure.html?_r=1&hp

White House Affirms Deal on Drug Cost

By DAVID D. KIRKPATRICK
Published: August 5, 2009

WASHINGTON — Pressed by industry lobbyists, White House officials on Wednesday assured drug makers that the administration stood by a behind-the-scenes deal to block any Congressional effort to extract cost savings from them beyond an agreed-upon $80 billion.

...Mr. Tauzin said the White House had tracked the negotiations throughout, assenting to decisions to move away from ideas like the government negotiation of prices or the importation of cheaper drugs from Canada. The $80 billion in savings would be over a 10-year period. “80 billion is the max, no more or less,” he said. “Adding other stuff changes the deal.

============================================================

In exchange for an empty promise from the drug industry that they will lower prices voluntarily, we lose legislation which would actaully lower drug prices.

[alc]

1. what is "cost savings"

I've seen this $80 billion cost savings figure a lot, but never seen what it means. Can they increase prices by $80 billion then give discounts of $80 billion and say they saved cost? Is there an expected cost for the next 10 years and the actual costs must be $80 billion less? Can they adjust the expected cost because of new drugs that they say need to be added to the expected cost?

[Eric J in MN]

2. "expected cost for the next 10 years and the actual costs must be $80 billion less"

Yes, the idea is that there was a projected cost, and the White House got a promise from drug industry lobbyists that the actual cost would be less.

I don't know who came up with the projected cost. Or how many experts thought the projected cost was an accurate prediction.