CBO Fact Checks Obama’s Cheaper Prescription Drug Promise
Campaigning in Newport News, VA, Obama tells us that he will help us get cheaper prescription drugs.
“First, we’ll take on the drug and insurance companies and hold them accountable for the prices they charge and the harm they cause… And then we’ll tell the pharmaceutical companies, ‘Thanks but no thanks for overpriced drugs’. Drugs that cost twice as much here as they do in Europe and Canada and Mexico. We’ll let Medicare negotiate for lower prices. We’ll stop drug companies from blocking generic drugs that are just as effective and far less expensive. We’ll allow the safe reimportation of low-cost drugs from countries like Canada.”
Of course, what actually happened was Obama’s back room deal with Drug companies and lobbyists. You know, the “most transparent administration” kind of thing.
The Congressional Budget Office today published an innocuously-titled post on the CBO website. The entry, entitled “The Effect of the March Health Legislation on Prescription Drug Prices” is actually the direct publication of a letter addressed to Rep. Paul Ryan, the ranking Republican on the House Budget Committee.
The letter is in response to Ryan’s request to examine how provisions in two pieces of legislation affect prescription drug prices.
As you requested, this letter describes how the Congressional Budget Office (CBO) analyzed the effects on prescription drug prices of certain provisions of the Patient Protection and Affordable Care Act, or PPACA, (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152). As you requested, this letter describes how the Congressional Budget Office(CBO) analyzed the effects on prescription drug prices of certain provisions of the Patient Protection and Affordable Care Act, or PPACA, (P.L. 111-148) and theHealth Care and Education Reconciliation Act of 2010 (P.L. 111-152).
For drugs covered by Medicare’s drug benefit, CBO estimated that those provisions of the legislation would raise the prices paid by pharmacies less any rebates paid to insurers by manufacturers by about 1 percent, on average. That increase in prices would make federal costs for Medicare’s drug benefit and the costs faced by some beneficiaries slightly higher than they would be in the absence of those provisions
For newly introduced drugs purchased through Medicaid, CBO estimated that those provisions would raise the prices paid by pharmacies by about 4 percent, on average..
The legislation also imposes an annual fee on manufacturers and importers of brand-name drugs. CBO expects that the fee will probably increase the prices of drugs purchased through Medicare and the prices of newly introduced drugs purchased through Medicaid and other federal programs..