Every single day, 10,000 people turn 65 and sign up for Medicare. The number of Americans covered by Medicare is expected to double to 80 million over the next twenty years. If we continue to spend nearly $10,000 per Medicare enrollee, the bill in twenty years will be $8 trillion. Needless to say, that is unaffordable.
The good news is Medicare spending growth has slowed down to less than 4%. The bad news is pharmaceutical expenditures are growing at 13%. I devoted a chapter in Health Attitude about the pharmaceutical industry, its 1,500 lobbyists, and the hundreds of millions it spends each year to influence politicians. Congress marches to their tune. I explained on Fox Business TV to Maria Bartiromo the introduction of Medicare Part D prescription drug plan legislation prohibits Medicare from negotiating the price it pays for drugs. We should be outraged by this and demand it be corrected.
Jeanne Whalen, at the Wall Street Journal, did a nice job in today’s news explaining how European countries control their cost of drugs (see Why the U.S. Pays More Than Other Countries for Drugs). They keep down their drug cost by tough negotiating. They often pay half of what Medicare pays for the exact same drugs. They pay less than Medicare for more than 90% of the drugs they buy. The same goes for the U.K., Canada, and other countries. In effect, we are subsidizing their cost. The industry lobby says if Medicare only paid what other countries pay, they would have to stop R&D. I have an idea for how they can get $5 billion extra for research: stop the annoying and inappropriate TV ads we are carpet bombed with 12+ times every day.