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Drug companies political contributions in the limelight

The New York Times has a long and generally factual article about the impact of contributions from drug companies in the 2000 and 2002 elections, and it’s relation to the Medicare prescription drug coverage bills that are now in conference between the House and Senate. The industry, via its trade association PhRMA and in direct lobbying/contributions from individual companies, contributed $50 million in campaign contributions– almost all to Republicans–following the "Flo" TV commercials in 1999, which starred an old lady asking to "keep Big Government out of my medicine cabinet".

So with that anti-government stance, how come we have a prescription drug bill almost ready to be passed?  Well the answer is that, like the AMA and AHA in the 1960’s, the industry has cut a medium term deal with the government.  Given the costs of drugs to consumers, especially the elderly–and the near elderly "aging in" to Medicare by 2010–a government Rx program is inevitable at some stage.  So PhRMA figured better one that has no price controls now, rather than one that comes with them immediately.  Eventually, any government program that buys drugs will develop some type of budget restraint.  But that can be left for future Congresses to pass and for future senior executive teams in the pharma industry to suffer through.  After all, Medicare was introduced in 1965, and it took until 1983 before DRGs were introduced in a first attempt to restrain hospital costs.  19 years of an unrestrained government program with millions of new price-unconscious consumers probably looks good to the industry right now. OK, they won’t be that lucky, but you understand their position!

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Who are the top ten companies receiving payment on medicare part D?