Government Munificence: Negotiating Drug Prices in Medicare Plan D

"We've seen how monopolies - whether government granted or government 'sanctioned', through inadequate enforcement of competition laws - have built the fortunes of many of the World's wealthiest people. But there is another way to get rich. You can simply arrange for the government to hand you cash. This can happen in a myriad of ways. A little-noticed change in legislation, for example, can reap billions of dollars. This was the case when the government extended a much-needed Medicare drug benefit in 2003. A provision in the law that prohibited government from bargaining for prices on drugs was, in effect, a gift of some $50 Billion or more per year to the pharmaceutical companies."

The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

Medicare Part D Prescription Drug Program was passed as the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003 and went into effect in 2006. The legislation establishes a voluntary program for people on Medicare for prescription drugs. The program does not allow the government to negotiate prescription drug prices yet subsidizes the variety of plans offered by private insurance companies. Instead, prices are worked out by drug companies and private insurance companies. 

This isn't about the divide between Republicans and Democrats. This is about the amount of control pharmaceutical companies and insurance companies have on the US government and how it affects the quality of the life of the individual. A Republican administration enacted legislation with this provision and Obama backed off negotiations to include it in legislation in order to get the Affordable Health Car Act passed. Trump did not include the language in his new health care reform bill. 

A Kaiser Family Foundation Poll published in August of 2015 showed 93% of Democrats and 74% of Republicans favor letting the government negotiate Part D prescription drug prices. So, a very popular idea meant to save money for seniors, people with disabilities and taxpayers is not being allowed to progress in congress because politicians are not standing up to pharmaceutical and insurance companies. 

Many bills to allow the government to negotiate drug prices have been proposed and killed in appropriations hearings since 2003. In October 2017, legislators introduced The Medicare Drug Price Negotiation Act of 2017 to direct the Secretary of the Department of Health and Human Services to negotiate lower prices for prescription drugs under Medicare Part D but the bill has stalled once again and Trump, who promised to include this in his health plan reform bill removed it just before unveiling the proposed legislation. 

By the way, the US Department of Veterans Affairs, a government agency, does negotiate the cost of pharmaceuticals for those who have served in the military. So the government demands they control negotiations on the prices of prescription medication for the military, but not US Citizens who have not served. 

So. Do You think the US Government should be negotiating prices for prescription drugs? Why or Why Not? 

The Price of Inequality

Article Reference: 

Medicare Part D Content and Appeals
Article Fact Checking on Medicare Part B
Mother Jones Article on Lobbying Efforts
Obama Back of Negotiations
Kaiser Family Foundation Poll
US Department of Veterans Affairs Drug Prices
Trump Removes Language for Government Negotiations

Medical Marijuana in Oregon: Regulation in a Direct Democracy State

Direct Democracy, or pure democracy exists where citizens write policy initiatives themselves. If activist groups collect enough signatures in the allotted time, the initiative makes it to the ballot. If voters approve the initiative, it becomes law. In representative democracy States, citizens vote for representatives who then write and implement policy based on the best interests of the citizens of that State. Currently, in the United States, California, Oregon, Colorado, Michigan, Arizona, North Dakota and Montana are direct democracy States and have been able to establish Cannabis regulation through direct voter initiatives. Oregon allows for all six forms of direct democracy. Let's examine what activist and special interest groups had to do to enact Cannabis Regulation in this State.

Oregon started its path to Cannabis regulation in 1973 becoming the first State to decriminalize Cannabis with The Oregon Decriminalization Bill abolishing criminal penalties for possessing small amounts of Cannabis. Possession of less than an ounce of Cannabis became punishable as a misdemeanor with a $500 to $1000 fine. Private use of Cannabis and public intoxication were no longer punishable offenses, however, public use and driving under the influence were punishable and continue to be to this day.

In 1998, The Oregon Medical Marijuana Act, established by Ballot Measure 67 was enacted allowing citizens with one or more of the listed qualifying conditions with a doctor's recommendation to obtain a State issued Medical Marijuana Card. This allowed the Patient possession of 1.5 pounds of Cannabis at any given time and the ability to grow 18 immature plants and 6 mature plants without the fear of citation, arrest or penalty. Patients could choose a caregiver to grow for them if they were unable and those caregivers would enjoy the same protections as the Patient. Before dispensaries were established, Patients had to grow their own or rely on a network of caregivers to produce medicine for them. Oregon became the second State in the US to enact a system of safe access for Medical Cannabis Patients following California Prop 215.

It wasn't easy to push this initiative through the legislative process through to implementation. First, activists had to write the initiative and gather signatures in the statutory time frame. After the vote, they had to ensure the Legislators followed through to implement the program and ensure law enforcement wasn't targeting Medical Patients in the program illegally.

Oregon is a direct democracy State allowing for a law to be citizen enacted by initiating a State Statute where special interest groups collect a certain amount of signatures for placement on the voter ballot. The first step in this process is providing the technical language for the law. In Oregon, the Ballot Measure 67 was authored by a small town member of the American College of Physicians, Dr. Rick Bayer, MD, Geoff Sugerman, a lobbyist for medical Cannabis Growers, activist John Sajo, attorney Leland Burger, ACLU Oregon executive director Dave Fidanque, and David Smigelski of advocacy group Oregonians for Medical Rights. The language in the law provided qualifying Medical Patients arrest and other protections from prosecution, created a patient registry, defined the Patient / Caregiver relationship and possession limits.

The second step in the process is collecting signatures. The Campaign for Ballot Measure 67 was run and managed by the Sugerman Group, co-petitioner Geoff Sugerman. By February of 1998, the group was established and solicits George Soros, Chairman of Soros Fund Management for money to hire signature gatherers to begin collecting the 73,000 signatures needed. George, partnering with Ethan Nadelmann of Drug Policy Alliance with contributions from individual donors paid for political ads and payroll for signature gatherers.

The Ballot Measure Campaign already had an audience through several well established media outlets. Paul Stanford of THCF Clinics, Madeline Martinez of the World Famous Cannabis Cafe and Director of OR NORML with local patient advocacy groups were producing Hempstalk bringing thousands of registered voters together in the same space as signature gatherers. The main stage speakers and panels filled with experts in drug law reform, hemp production and cannabis science educated the voters, compelling them to add their signature to the measure.

Paul Stanford also produced a TV Show running weekly on cable access Portland called Cannabis Common Sense. Every Friday night Local Doctors, Campaign advocates and special guests would speak about the economic, scientific, environmental and medical benefits of both Cannabis and Agricultural Hemp. The general tone of the conversation with average voters had already shifted towards regulation.

All of these factors together contributed to a solid defense against opposition groups including Oregon Against Dangerous Drugs and The Christian Coalition. The loudest speaker in the group of opposing parties was Multnomah County Sheriff Dan Noelle. His talking points were centered around Marijuana as an illegal drug degrading the youth who would have access to it leading to lawlessness. Since this campaign, the Sheriff has switched his views on medical cannabis.

After the bill was passed, it took some time for the Oregon State Judicial Branch to conform to the conditions of the new law. At first, legitimate Patients continued to be targeted for prosecution. It took a concentrated effort from attorney Lee Berger accompanied by key witness, Dr. Rick Bayer and a small army of court supporters to stop the effort. Mr. Berger had to convince the defendants in these cases not to take the plea deal, but to exercise their right to a fair trial. One by one, these cases were acquitted when taken to trial.

Kyllo v United States was a Federal win for Oregon growers decided 4 years prior to the passing of the medical bill. The decision using thermal imaging, or FLIR devices outside the home does not show just cause for a search within the home under the Fourth Amendment set the stage for legal language in Oregon law.

Today's Oregon Cannabis market is the culmination of 20 years of implementations, where businesses have been allowed to establish themselves and enjoy the benefits of sustainable economic growth. This would not have been a possibility without a savvy new generation of key players. These attorneys, business associations and individuals remained in the State Government buildings the whole time, driving the conversation as their initiatives were being amended each legislative session. These individuals provide sustainable business support to those looking to invest in Oregon's burgeoning markets now through trade business conferences, with legal representation and other services available to ensure success.

The International Cannabis Business EXPO began as a forum for Oregon businesses as the Oregon Marijuana Business EXPO before expanding into an international conference series, produced by Alex Rogers and Dean Arbit. These conferences combine business planning, politics and culture to educate the average business investor giving a clear and tangible path to establishing and sustaining every level of Cannabis businesses.

Portland was blessed with husband and wife team, Anthony Johnson and Sarah Duff who have lead the way for cannabis law reform activists since moving there in 2004. They have co-authored initiatives, petitioned for dispensaries and remained active throughout implementation of both medical and recreational businesses. Working with attorneys like Rachal Kurt, Business Development Manager at the National Cannabis Industry Association to establish a legal framework for business structure and representation, Oregon has maintained strong industry standards.

As recreational markets are opening, Oregon is experiencing normal, but extreme market fluctuations with a 40% surplus of last harvest. Businesses face traditional and non traditional market risks including regulation deterrents, lack of Government Compliance Systems (seed to sale), the need to utilize hard money lending solutions due to Federal Banking Restrictions, the presence of a necessary black market and vertical integration restrictions. The World is watching to see how Oregon businesses continue to thrive, grow and fail for the purpose of structuring legislature and developing implementation strategies in their local communities.