Big Pharma agreed to support Obamacare with significant price subsidies for consumers. They assumed that giving this support would be offset by new customers through expanded access to coverage. They also got assurances that Medicare would not negotiate drug prices directly. The mess that is Obamacare may not work out the way the drug makers planned. The newly insured seem to be mostly Medicaid patients, not a prime market for drug companies. We also are seeing the potential costs soar as insurers?pass along the costs of covering pre-existing condition patients to everyone else. If the young and healthy refuse to sign up then who is paying for the sick? We all are through higher premiums.
?Repeal and replace may resonate well right now...? - Bob Ehrlich
What keeps Big Pharma executives up at night is a fear of government price controls. Single payer would mean just that. A failure of Obamacare would lead to a cry from liberals that a single payer system is the only way to efficiently cover the uninsured and those with pre-existing conditions. Government could create prices for all procedures and treatments including drugs. Many liberals secretly like the mess we are in because they can still blame greedy insurance companies for mass cancellations. A blow-up in cost would help them push single payer.
On the other hand the massive incompetence of the government in rolling out Obamacare will not help the case for full government control. Liberals have taken a hit in the faith of Americans on the ability of government to deliver a big program. Although Medicare is cited as the example of success, it is going broke. Medicare for all is what the liberals want but the real issue is affordability. Single payer means higher taxes for all.
Obamacare needs to be revamped to do what it was meant to do. We need to care for the poor and sick, whether we expand Medicaid, open government clinics in every Walmart, or open clinics in abandoned buildings in inner cities. We have many options. For those with pre-existing conditions, we could create a high-risk pool by state or nationally. We could do these things in a targeted way without tampering with every insurance policy in America.
Republicans need to do more than talk in generalities about the free market. If they could pitch an alternative that expanded coverage and dealt with pre-existing conditions then they could sell it to moderate Democrats desperate for a solution. Speaker Boehner would be wise to have a specific plan to cover what Americans agree on. Repeal and replace may resonate well right now if the plan was inclusive and compassionate.
Drug companies need to keep a low profile while America seethes. Insurance companies and government bureaucrats are today?s villains. Keeping price increases modest would be a good idea while Obamacare crumbles. I expect we will see a modified Obamacare that scales back to the original policy goals of expanded access and pre-existing coverage. Each side can claim a win. Whether drug companies can remain a winner will be determined over the long run.
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