Obamacare and unintended consequences

Matthew Hoy
By Matthew Hoy on December 8, 2010

They just had to pass it. It had to be done immediately and reading that 2,000+ page piece of legislation was just too difficult.

Now, as soon-to-be former House Speaker Nancy Pelosi lectured, we’re going to find out what’s in it. Today’s New York Times reveals that the answer isn’t good.

In an unintended consequence of the new health care law, drug companies have begun notifying children’s hospitals around the country that they no longer qualify for large discounts on drugs used to treat rare medical conditions.

As a result, prices are going up for these specialized “orphan drugs,” some of which are also used to treat more common conditions.

Over the last 18 years, Congress has required drug manufacturers to provide discounts to a variety of health care providers, including community health centers, AIDS clinics and hospitals that care for large numbers of low-income people.

Several years ago, Congress broadened the program to include children’s hospitals. But this year Congress, in revising the drug discount program as part of the new health care law, blocked these hospitals from continuing to receive price cuts on orphan drugs intended for treatment of diseases affecting fewer than 200,000 people in the United States.

The reason behind the change is murky, though some drug makers had opposed expansion of the drug discount program. The discounts typically range from 30 percent to 50 percent, and children’s hospitals say the change is costing them hundreds of millions of dollars.

It’s a good thing those all those health care negotiations were televised on C-SPAN so we could see “who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies.”

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December 2010



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