Greedy drug companies are making a killing off the medicine cabinets of the poor, complained New York Times correspondent Milt Freudenheim [1] in his July 18 article “A Windfall from Shifts to Medicare.”
Yet while the Times reporter reminded readers that the drug prescription plan was seen by leftist critics “as a sop to the drug industry,” Freudenheim failed to include critics from the right who complained about the explosive growth of Medicare spending and its toll on taxpayers.
In fact, the Times writer focused his story on government paying drug companies for medicine for the poor, not how American taxpayers are ultimately footing the bill for the massive Medicare Part D prescription drug plan.
“The pharmaceutical industry is beginning to reap a windfall from a surprisingly lucrative niche market: drugs for poor people,” Freudenheim opened his story, later complaining that “analysts expect” pharmaceutical companies “to generate hundreds of millions of additional dollars” after years of facing “pricing restraint” from state Medicaid programs.
The main concern Freudenheim expressed in his story was the “loss” of revenue to the government.
“Timothy Anderson, a pharmaceutical analyst with the Prudential Equity Group, estimates that if Part D were not in place the rebates” for 13 of the most popular drugs in the Medicare benefit “would have been more than $2 billion” in 2006.
However, the cost taxpayers will still pay was not evident in the Times story. Cost estimates have varied for the prescription drug plan, from a more than $1-trillion price tag [2] over 10 years to a smaller but still sizeable $678 billion. [3]