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November 27, 2003

US - Medicare to subsidize Pharma Business

The US Congress has passed a bill to institute medicare drug benefits for the elderly in the US, a move which may in time prove to be extremely costly to the US economy. Instead of reigning in the drug companies' pricing of prescription drugs, the administration prefers to use tax payers' funds to pay for medicines, effectively subsidizing the profitability of its drug industry.

Prices for prescription drugs in Europe are often a fraction of what patients are expected to pay in the US, and even in neighbouring Canada, drugs are so much cheaper than in the US that bus tours of senior citizens to Canada are commonly organized to stock up on prescription meds.

Rep. Ron Paul, in an article entitled Republican Socialism, quotes a National Tax Payers Union estimate that a few decades hence, Medicare is set to consume close to 40 % of the US Gross Domestic Product!

"Phony senior lobbies", states Paul, "want free drugs paid for by taxpayers; American corporations want to dump their retirees into Medicare at the expense of taxpayers; pharmaceutical companies want huge windfalls provided by taxpayers; and politicians want to get reelected by passing incredibly shortsighted legislation courtesy of taxpayers. Most of today’s politicians will never have to answer to future generations saddled with huge federal deficits because of this expansion of Medicare. Those generations are the real victims, as they cannot object to the debts being incurred today in their names."

While future generations will likely have to pay the debt, the pharmaceutical companies who backed Bush's election bid will be cashing in big time.

Rep. Ron Paul, MD
Medicare prescription drug bill - Republican Socialism
Tue Nov 25 14:02:30 2003

The Senate voted 54-44 Tuesday to approve the $395-billion Medicare prescription drug bill

Republican Socialism

by Rep. Ron Paul, MD

November 25, 2003

Congress worked late into the night this past weekend to pass a Medicare prescription drug bill that represents the single largest expansion of the federal welfare state since the Great Society programs of the 1960s. The new Medicare drug plan enriches pharmaceutical companies, fleeces taxpayers, and forces millions of older Americans to accept inferior drug coverage ú while doing nothing to address the real reasons prescription drugs cost so much.

Nothing from the government is free, of course, and prescription drugs will be no exception. The perception that seniors will be able to flash a Medicare card at the pharmacy and walk out without paying anything is completely false. In fact, many seniors will end up paying more out-of-pocket under the Medicare scheme than they do now with their private plans. The Medicare drug benefit requires monthly premiums, co-pays, and deductibles, just as private plans do. It also has gaps in coverage that no sensible person would accept if offered by a private insurer. Like all government programs, the Medicare drug entitlement will be shabby, degrading, and inferior to the private sector.

The vast majority of older Americans already have private prescription drug coverage that they don’t want changed, and this 78% of seniors may well lose their good private coverage altogether. In fact, the government’s own Congressional Budget Office estimates that at least one-third of all private companies will dump their retirees into the Medicare system as a result of the new bill. Big corporations love the Medicare drug plan, because they want to shift the responsibility for providing drug benefits to their retirees onto taxpayers. Dozens of major companies shamelessly advertised in the Washington Times and elsewhere in support of the Medicare bill for this very simple reason. Their pension plans are dangerously underfunded, so naturally they use their lobbying influence to promote a Medicare drug system. In this sense the Medicare bill is a taxpayer-funded corporate bailout for hundreds of American companies.

The financial impact of this legislation on taxpayers cannot be overstated. Government projections that the drug program will cost $400 billion over the next decade cannot be trusted, as existing Medicare programs cost 4 times more than estimated when they were created. The likely cost is at least $1 trillion over 10 years, and much more in following decades as the American population grows older. The Medicare “trust fund” is already badly in the red, and the only solution will be a dramatic increase in payroll taxes for younger workers. The National Taxpayers Union reports that Medicare will consume nearly 40% of the nation’s GDP after several decades because of the new drug benefit. That’s not 40% of federal revenues, or 40% of federal spending, but rather 40 % of the nation’s entire private-sector output! Clearly this new Medicare spending will bury our great-grandchildren unless we rethink the wisdom of ever-increasing entitlement programs.

Phony senior lobbies want free drugs paid for by taxpayers; American corporations want to dump their retirees into Medicare at the expense of taxpayers; pharmaceutical companies want huge windfalls provided by taxpayers; and politicians want to get reelected by passing incredibly shortsighted legislation courtesy of taxpayers. Most of today’s politicians will never have to answer to future generations saddled with huge federal deficits because of this expansion of Medicare. Those generations are the real victims, as they cannot object to the debts being incurred today in their names.

Dr. Ron Paul is a Republican member of Congress from Texas.

Ron Paul Archives


Liberal analysts say new Medicare law will do more harm than good

By Julie Rovner

WASHINGTON (Reuters Health) - A group of former Clinton administration health officials Thursday blasted the Medicare bill President Bush plans to sign next Monday, saying the measure could lead to the demise of Medicare as it currently exists.

"Every page you look at you find more things (to suggest) the real goal is to replace traditional Medicare," Robert Berenson of the Urban Institute told a briefing sponsored by the Democratic think tank the Center for American Progress.

Berenson said the new "Medicare Advantage" program for private health plans "is better called the traditional-Medicare-disadvantaged" program, because it represents "an effort to tilt the playing field" towards private plans by significantly increasing their payments.

Private health plans will get subsidies to provide prescription drug coverage while private "Medigap" supplemental plans will be barred from offering drug benefits, and there is no limit on premiums that stand-alone "drug-only" plans could offer. For these reasons, many beneficiaries will find themselves with no choice but to leave traditional Medicare and enroll in a private plan if they want any of their medications paid for.

"The notion that you can stay where you are if you're not happy is just not right," Berenson said.

Judy Feder, Dean of Policy Studies at Georgetown University, predicted that seniors and the disabled on Medicare will be utterly confused by the complexity of the choices they will face -- but that they already understand how small the benefit is. "They get that the benefit is limited. It's not what they've been promised," she said.

And for the poorest beneficiaries, she said, "they will actually have a reduction in coverage," because the new law will allow them to be charged higher copayments than the joint federal-state Medicaid program currently allows, and because private plans will be able to limit which drugs are covered.

In fact, said Jeanne Lambrew of George Washington University, all beneficiaries will have to "choose blindly" when it comes to selecting their drug coverage, because plans will not have to tell beneficiaries in advance which particular medications are or are not covered.

At the same time, she said, plans will be able to change which drugs are covered during the course of a plan year, but beneficiaries "will be locked in" and will not be allowed to change.

But perhaps the biggest problem with the new Medicare bill, Lambrew said, is that Congress will likely spend so much time dealing with the fallout that it will not be able to move on to other critical health issues, including 44 million Americans with no health insurance at all.

"This will probably suck the oxygen out of the health policy debate for the next several years," she said. "The implications of what we're talking about go far beyond Medicare."

A recent comment on the medicare prescription drug benefits:

Prescription Drug Benefit Under Medicare...

A Guest Editorial by Joel M. Kauffman, PhD, Professor of Chemistry Emeritus, University of the Sciences in Philadelphia

January 9th, 2004

By now you must believe you have heard every possible objection and outrage to the Medicare Prescription Drug Benefit plan of 2003 that is now law. The loudest screams are opposites: that there are gaps in the benefit, the "doughnut hole", which should be plugged, and the maximum benefit should be set higher, meaning that it ought to cost us taxpayers more. Others cry that drugs cost too much, that the plan is a drug company subsidy, so costs should be forced down because drugs are in the same class as a public utility. The drug companies object that this will stifle all innovation.

What you and I have not heard in the mainstream media is the naked emperor kind of truth: several of the largest classes of drugs have no real benefits and should never have been approved by the FDA. Many have side-effects that are so serious that the resulting hospitalizations and deaths cost more than the drugs. The sale of prescription medicines in the United States exceeded $73 billion in 1994. Two researchers from the University of Arizona conclude that preventable illness and death from the misuse of these medicines cost the American economy over $75 billion that year; if lost productivity is included the cost rises to between $138 billion and $182 billion annually.

Even the American Medical Association admits to about 100,000 deaths per year due to the correct use of prescription drugs. Others think that the number is double that. Because most of these drug deaths occur in isolated individuals, mostly in hospitals, and can be concealed as other causes of death, they do not get the press coverage of 200 dead in a jetliner crash. Would we have an airline industry if it caused 100,000 deaths per year?

Thomas J. Moore, Senior Fellow in Health Policy at the George Washington University Medical Center, right there in Washington, in his 1998 book "Prescription for Disaster", examined the top 50 selling drugs. He found that 7 can cause addiction, 18 have cancer risks, 18 are unusually toxic, and 25 have cardiac risks. The most valuable pair are insulin and thyroid hormone, for which Medicare should pay, in my opinion.

The FDA and others are easily fooled by the effect of drugs on conveniently measured symptoms, such as bone density, cholesterol levels, heart arrhythmias and blood pressure. The section below is more technical and gives evidence for the uselessness of two major classes of drugs: for blood pressure and for cholesterol. Medicare should not pay for drugs that do not lengthen life or not do so at a cost the American taxpayer can bear.

The reduction in the risk of dying in 1 year is 0.15% for people taking the anticholesterol drug Lipitor in the ASCOT trial described below. This reduction is not statistically significant. This means that your supposedly improved chance not to die in 1 year would be just 1 person of 667 taking Lipitor. The cost of a month‚s supply of Lipitor (atorvastatin) at 40 mg/day is $125, or $1500/year, or $1,000,000 to prevent one death among 667 people taking this type of drug for just 1 year. Again, this was based on a trial the drug‚s maker chose to report, usually the trial with the best results.

Congress should direct the U. S. Dept. of Health and Human Services to appoint a committee of financially independent, Big Pharma independent members, including ones from Canada and the UK, to review the literature and advise Medicare on which classes of drugs do not prolong life, or do not do so at a reasonable cost. Obviously the FDA is not capable of doing so, and not likely to reverse its own approval decisions in any serious manner. The 2003 law should be amended to forbid payment for such drugs. Then the cost of the Medicare Drug Benefit plan will be very reasonable and bearable, and federal deficits will be a lot lower.


Joel M. Kauffman, PhD, Professor of Chemistry Emeritus,
University of the Sciences in Philadelphia


Evidence from the medical literature on the non-benefits of common drugs follows. While there are many problems with this source of information, it is all we have where even some of it comes close to accuracy that is easily available to the public. The following specific examples are mostly from my forthcoming paper: "Bias in Recent Papers on Diets and Drugs in Peer-Reviewed Medical Journals", Journal of American Physicians and Surgeons 2004;9(1): in press.

Blood Pressure

The Anti-Hypertensive and Lipid-Lowering Treatment to Prevent Heart Attack Trial (ALLHAT, 2002), in its anti-hypertensive arm, sought to compare a diuretic (chlorthalidone) with a calcium channel blocker (amlodipine) and an angiotensin converting enzyme (ACE) inhibitor (lisinopril) for the control of blood pressure (the surrogate endpoint) in high-risk patients. No placebos were used in this study that followed 33,357 subjects for a mean of 4.9 years. Primary outcomes were defined as fatal CHD or non-fatal MI, and were observed in 2,956 subjects. There was no difference in frequency found in either outcome among the three treatments. There were minor differences in stroke rates (1% absolute, lisinopril best) and in hospitalizations for "heart failure" (2% absolute, amlodipine best). Abstract context: "Anti-hypertensive therapy is well established to reduce hypertension-related morbidity and mortality, but the optimal first-step therapy is unknown." Conclusion: "Thiazide-type diuretics are superior in preventing one or more major forms of CVD and are less expensive. They should be preferred for first-step anti-hypertensive therapy." It should be noted that Chlorthalidone is not a thiazide. It had the greatest effect on systolic blood pressure, yet did not have the most favorable effect on any outcome (their Fig. 4). The World Health Organization does not think older adults should use this drug because the risk of serious side effects is so high (Wolfe & Sasich, 1999).

An older trial, also supported by drug companies, on 17,354 subjects with worse hypertension than in ALLHAT and with six years of follow-up, compared placebo, a beta blocker (propranolol) and a thiazide diuretic (bendrofluazide). There was no difference in the all-cause death rate and minor reductions in the rates of strokes and all cardiac events in the treatment groups (MRC, 1985). It was interesting that placebo reduced blood pressure significantly, but there was no correlation of the amount of reduction with death rates, another indication of a useless surrogate end-point.

Another trial examined 484 randomly selected hypertensive men, except that they were all aged 68 at the beginning. Many of them were taking a wide spectrum of anti-hypertensive drugs, mainly from the thiazide diuretic and beta-blocker classes. They were followed for 10 years and had a cardiac-event-free survival of 65%, while those men not on medication had an 82% survival. Those with diastolic pressure at baseline *90mm Hg had a RR = 4 with treatment, and even those with >90mm Hg fared worse with treatment. Funding was mostly from non-drug company foundations and a Swedish government agency (Merlo et al., 1986).

The older trials show that it is not certain that anti-hypertensive drugs lower morbidity or mortality. It is obvious that the ALLHAT conclusions should have been: No standard treatment with prescription anti-hypertensive agents is worthwhile. So it follows that Medicare should not be paying for them.


The Myocardial Ischemia Reduction with Aggressive Cholesterol Lowering (MIRACL) study, an RCT on the effects of 80 mg/day of atorvastatin (LipitorË™) or placebo on 3,086 patients in hospital after angina or non-fatal MI and followed for 16 weeks, had the following conclusions in the abstract: "For patients with acute coronary syndrome, lipid-lowering therapy with atorvastatin, 80mg/day, reduces recurrent ischemic events in the first 16 weeks, mostly recurrent symptomatic ischemia requiring re-hospitalization." (Schwartz et al, 2001) Actually this is true. The unmentionable findings were that there was no change in the death rate, and no significant change in either the re-infarction rate or need for resuscitation from cardiac arrest. There was a significant drop in chest pain requiring rehospitalization. The risk ratio plot was unusual in not having a vertical bar at the 1.00 point, making the outcomes hard to visualize from this figure. The discussion did not give any comparisons with alternate treatments, for example, that five weeks of aspirin would give significantly lower reinfarction and all-cause mortality rates in men (Kauffman, 2000). Lowering cholesterol levels was highlighted, despite existing knowledge that the beneficial effects of statins on CHD are independent of either the baseline or achieved levels; thus these levels were a useless surrogate endpoint (Nielsen, 2001).

The Anglo-Scandinavian Cardiac Outcomes Trial (ASCOT) study, specifically on atorvastatin (Sever et al, 2003), did not mention in its abstract that: (1) women were worse off with treatment, the same as with aspirin (Kauffman, 2002); (2) that after 3.5 years there was no significant change in the all-cause death rate, marking atorvastatin as even less effective than pravastatin in the WOSCOPS trial; and (3) that total cardiovascular events and procedures were 2% lower with atorvastatin than with placebo after 3.5 years ˜ instead they only gave the RR of 0.79. This is a poorer performance than that of Bufferin, for which RR = 0.31 for non-fatal MI in men (Kauffman, 2000). The control group had more previous stroke, TIA, diabetes, and other CHD, showing poor randomization.

A meta-analysis of 44 trials of atorvastatin intended to highlight its safety (Newman et al, 2003) neglected to mention in its abstract that: (1) the median treatment period was only one year; (2) that the all-cause death rate of 1% did not differ from that of placebo, and thus was not even as good as that of pravastatin in the WOSCOPS trial; (3) that 65% of the treatment group vs. 45% of controls experienced an adverse event; (4) that the total unadjusted withdrawal rate was 4% vs. 1% for placebo for all adverse events; (5) that 10% of patients suffered serious adverse events vs 8% for placebo; and (6) that reduction in treatment-associated adverse cardiovascular events (a judgmental determination) was 1% absolute (from 2% on placebo to 1% on atorvastatin, exactly as in the ASCOT trial, a poorer performance than that of BufferinË™ in men). The authors were thoughtful enough to provide the information, in the Methods section, that from April 1, 1998, the FDA allowed the exclusion of cancer and overdose from drug side-effects, both of which might have been significant with this drug based on the results of the Prospective Study of Pravastatin in the Elderly at Risk (PROSPER, Goldstein, 2003) and Cholesterol and Recurrent Events (CARE, Ravnskov, 2000) trials.

A more recent study from the LDS Hospital and University of Utah, Salt Lake City, confirmed that statin use improved the survival rate among 651 patients, 75% male, with *70% blockage in at least 1 coronary artery when infection by cytomegalovirus was present, and more so, when inflammation was severe. There was no survival benefit when both were absent. This finding strongly supports the hypothesis that cholesterol lowering was irrelevant (Horne et al., 2003). Even here, aspirin might do as well. It also means that the legitimate market for statin drugs could be about 1% of the current market. There is no reason for Medicare to pay for the other 99%.


ALLHAT. Major outcomes in high-risk hypertensive patients randomized to angiotensin- converting enzyme inhibitor or calcium channel blocker vs. diuretic. JAMA 2002;288:2981-2997.

Goldstein MR. Letter to editor. Lancet 2003;361:427-428.

Horne BD, Muhlstein JB, Carlquist JF, et al. (2003). Statin Therapy Interacts With Cytomegalovirus Seropositivity and High C-Reactive Protein in Reducing Mortality Among Patients With Angiographically Significant Cornary Disease. Circulation, 107:1-6.

Kauffman JM. Should you take aspirin to prevent heart attack? J Sci Exploration 2000;14(4):623-641.

Kauffman JM. Aspirin study flawed. Letter to editor, J Sci Exploration 2002;16(2), 247-249.

Merlo J, Ranstam J, Liedholm H, et al. Incidence of myocardial infarction in elderly men being treated with anti-hypertensive drugs: population-based cohort study. BMJ 1996;313:457- 461.

MRC. MRC trial of treatment of mild hypertension: principal results. BMJ 1985;291:97-104.

Newman CB, Palmer G, Silbershatz H, Szarek M. Safety of atorvastatin derived from analysis of 44 completed trials in 9,416 patients. Am J Cardiol 2003;92:670-6.

Nielsen JV. Serum lipid lowering and risk reduction: where is the connection? BMJ Rapid Response 2001;Nov.19, to Kmietowicz Z. Statins are the new aspirin, Oxford researchers say. BMJ 2001;323:1145.

Ravnskov, U. The Cholesterol Myths: Exposing the Fallacy that Saturated Fat and Cholesterol Cause Heart Disease. Washington, D.C: New Trends Publishing 2000.

Schwartz GG, Olsson AG, Ezekowitz MD, et al. Effects of atorvastatin on early recurrent ischemic effects in acute coronary syndromes. JAMA 2001;285:1711-1718.

Sever PS, Dahl FB, Poulter HW et al. for ASCOT. Prevention of coronary and stroke events with atorvastatin in hypertensive patients who have average or lower-than-average cholesterol concentrations, in the Anglo-Scandinavian Cardiac Outcomes Trials‚ Lipid Lowering Arm (ASCOT-LLA): a multicentre randomized clinical trial. Lancet 2003;361:1149-1158.

Wolfe S, Sasich LD.  Worst Pills Best Pills. New York, N.Y.: Pocket Books, 1999, p105.


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San Francisco Chronicle - Bush's Medicare deceit

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WASHINGTON, Sept. 3 - A day after President Bush heralded his efforts to help the elderly cope with increased medical expenses, federal officials announced the largest premium increase in dollars in the Medicare program's history, raising the monthly expense by $11.60 to $78.20.


posted by Sepp Hasslberger on Thursday November 27 2003
updated on Friday December 10 2010

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