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A Call for Drug Bargaining Power Edward I. Koch One of the great disappointments in the decision of the Bush administration to provide prescription drug coverage to Medicare beneficiaries was its refusal to allow the Medicare agency to use its enormous economic power to bargain with the drug manufacturers on the price of drugs. I recall the debate and the statements by many, me included, that the failure to include that power was a sellout to the pharmaceutical industry. I was surprised when I first saw the tv ads by AARP — the leading non-profit organization representing the senior citizens of this country — urging that there be no change in that provision now that the Democrats were in charge of both Houses of Congress. Democrats said they would introduce legislation to change the law to provide the Bush administration with the power to negotiate drug prices available under the Medicare program. The Bush administration resisted the legislation and threatened to veto. The media and the Democrats, including me, denounced the administration's position. Why, thought I, was AARP echoing the Bush position on this issue? Finally I saw one article in The New York Times headlined, "Senate Bill Seeks Power for Medicare on Drug Costs." It stated that "Max Baucus, Democrat of Montana, the chairman of the Finance Committee, would repeal the part of the 2003 law that prohibits such negotiations." At the end of the article appeared the following, "The Congressional Budget Office says that neither the House bill nor the Senate version would save much money . . . overall [Peter R. Orszag, director of the budget office] said, 'Mr. Baucus's bill "would have a negligible effect on federal spending" because the government would not have the leverage to negotiate discounts deeper than those already being obtained by private Medicare drug plans.'" In a letter dated April 10, 2007 to Sen. Baucus, D-Mont., Mr. Orszag wrote, "Without the authority to establish a formulary or other tools to reduce drug prices, we believe that the secretary would not obtain significant discounts from drug manufacturers across a broad range of drugs." Story Continues Below
No one in Congress suggests the drugs available (formulary) should be reduced to cut costs. Has the popularity of President Bush suffered as a result of the misinformation requiring, in fairness, that those who lambasted the president on this issue acknowledge they were in error? For the record, I do that now. Take China and Trade Deficit to Task It is simply impossible for the United States to compete in a number of trade areas with China because of their low wages, lack of medical benefits, pensions, and environmental standards, all of which add substantial costs to American-made products. The best illustration resulting in an unfavorable annual trade deficit between the United States and China of $232 billion is a comparison of wages in the automotive industry. General Motors has licensed Chinese firms to manufacture Cadillacs. The wages paid in China to automotive workers are $1.50 per hour with no health benefits. The wages paid in the U.S. are $26 per hour plus costly health benefits. When China starts selling its Cadillacs at home or abroad, how can the U.S. possibly compete? It can't. For the first time, the U.S. has taken action, according to The New York Times, "when the top American trade envoy, Susan C. Schwab, announced that the United States would take China to court at the World Trade Organization over suspected trade barriers and piracy of books, music, videos, and other goods." The issues include "challenging China over its subsidies of manufactured goods." I believe that the various trade agreements reached not only with China, but also under NAFTA with Canada and Mexico, put the U.S. at a disadvantage by not including requirements to provide fair wages, health benefits, pensions, and environmental controls. The response generally offered by the free traders is that we benefit in other industries. That is not adequate. We are at the point that we are losing or have already lost basic industries which used to offer employment to millions of people, particularly the unskilled. Our adverse balance of trade with so many nations has turned us into a debtor nation and, equally important, has demoralized millions of people formerly part of the U.S. work force. Upstate New York is one region which has suffered greatly from the loss of manufacturing jobs. I have a suggestion. Why not require that all international trade agreements made by the U.S. include provisions that every three years, the balance of trade between the U.S. and other countries be examined nation by nation? Where the balance is not roughly equal or within a range of perhaps up to 15 percent, automatic tariffs and quotas would go into effect for a period of say three years during which the other nations would be expected to bring the balance of trade into closer balance. In the three years after that, the U.S. would restore free trade practice to see how effective the efforts of our trading partners have been. If they are not adequate, we would again resort to tariffs and quotas. Something has to be done. We Should Be a Proud Nation Our nation is reviled all over the world, notwithstanding, according to The New York Times that "[t]he United States provides more than half the food aid that feeds hungry people around the world…" We are never going to satisfy many who hate us. While we should not stop taking reasonable self-corrective measures to eliminate injustices, we should stop reviling ourselves in masochistic fashion. We can do better, but we are still among the best. Why else are so many people seeking to come here, legally and illegally? Racism Thrives The Associated Press reported on April 16, "A German army instructor who ordered a soldier to envision himself facing hostile blacks in the Bronx while firing his machine gun remains on duty, as it emerged yesterday that an apology had been sought from the German ambassador to the United States. "A video of the instructor telling the soldier to shoot and yell obscenities while thinking of African-Americans in the Bronx aired on German national television Saturday and prompted calls for an apology by the Bronx borough president." Racism is thriving all over the world. That Germany and its army would be engaging in it today is somewhat of a shock. German institutions and government are very careful to avoid anti-Semitic actions. They apparently need educational efforts with respect to racism. The AP report continued, "The video shows an instructor and a soldier in camouflage uniforms in a forest. The instructor tells the soldier, ‘You are in the Bronx. A black van is stopping in front of you. Three African-Americans are getting out and they are insulting your mother in the worst ways . . . Act.'" Whites, blacks and Asians, Jews, Christians, Muslims, and others should stand together and denounce racism, anti-Semitism, homophobia and misogyny (denigration of women) wherever they occur, whether in Germany or here in the U.S. (as in the Imus case). Editor's note: Read more on this subject in related Hot Topics:
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