Contraceptive mandate is a boon for Big Pharma | Health198

Backlash continues to mount against the August 1 decision bythe US Department of Health and Human Services (HHS) to mandate thatcontraception be fully covered as ?preventive? medicine by insurance companies? and thus, ?free? for consumers. Most of the criticism has thus far revolvedaround the lack of real conscience protections for religious employers and thefact that the decision relegates pregnancy to a disease to be prevented. Anadditional consequence is coming to light which raises serious ethicalquestions: pharmaceutical companies will now be paid full price forcontraceptives that they previously had to provide at a discount due to federalregulations.

How did that happen?? In an effort to entice collegestudents to establish method and brand loyalty, pharmaceutical companies wereoffering reduced pricing on contraceptives to college campus health clinics.Prior 2005, however, federal cost-control regulations were in place that forcedthese companies to sell their products to college clinics at the same price atwhich they sold to one of their largest buyers, Medicaid. In his book, Obamanomics, Timothy Carney explains that in 2005,President Bush signed a law that allowed these companies to provide cheapcontraceptives on college campuses.? But there was a catch ? drug makersalso had to reduce the costs of these birth control items to Medicaidrecipients.

In a recent article in The Washington Examiner, Carney reports that this changeddue to a little-noticed favour to contraceptive producers that was ?tucked intoan omnibus bill.? In March 2009, a $410 billion omnibus spending bill waspassed which contained a provision that allowed pharmaceutical companies tosupply the drugs to college students at steeply discounted prices ? withoutoffering these same discounts to the Medicaid program.? Essentially, thisallowed the companies to keep their low-price enticement to get college womenhooked on their products while bilking taxpayers at full price for those soldto government-funded Medicaid.

With the August 1 HHS ruling, however, both the 2005 and2009 rulings are obsolete. Discounts on college campuses are no longernecessary since contraceptives will be free of charge. In fact, the HHS will beputting money back in the pockets of the pharmaceutical companies, paid forwith our tax revenues and insurance premiums.

The HHS ruling becomeseffective on August 1, 2012 ? just before next year?s Fall semester.? Theprecise timing of the implementation will allow all college students freeaccess to contraceptive products for the 2012-13 school year.? This isgood news for pharmaceutical companies: now they can expect full reimbursementfor their birth control products since there will be no incentive for them to reducetheir prices.

Let?s follow the money:

1. Both college students and Medicaid recipients had access to low cost birth control via pharmaceutical companies as a result of a 2005 law. The drug companies absorbed the cost difference between the full price and the discounts for both programs.

2. In 2009, President Obama signed a bill that allowed pharmaceutical companies to provide low-cost contraceptives to college students without offering matching discounts to the government-funded Medicaid program. The drug companies only needed to absorb the cost difference between the full price and the discounts for college health clinics.

3. on August 1, 2011, HHS ruled that such contraceptives would now be provided at no cost to college students.? Effective August 1, 2012, the contraceptives would be paid for by either the students? parents through their private health insurance or by the Federal Government through Medicaid or another of the government-funded insurance exchanges.? The pharmaceutical companies will no longer have to discount their birth control products to anyone because they will be paid in full by either private insurance or the government.

Anyone who has taken Economics 101 knows what happens toprices when the government intervenes and mandates provision of a given product? they go up, and rapidly. Ironically, these are the same pharmaceuticalcompanies which were criticized by the President for their ?anti-competitiveactions? during his presidential campaign. With the new HHS mandate, Big Pharmawill be able to reap record profits by charging all of its customers full pricefor contraceptives, since these products will be paid for both through higherinsurance premiums and through our tax dollars.

The moral and ethical problems raised by the HHS mandatecontinue to mount. All people of good will should contact their electedrepresentatives and let them know that this cannot stand.? The growing andunfettered power of the administration to make such moves without open debateor congressional involvement is a very serious matter that must be honestlyaddressed.

Bob Laird is a fellowof HLI America and is the former Director of Tepeyac Family Center. he writes fromLorton, Virginia, USA. This article was originally published on HLI America?s Truth and Charity Forum.

Related posts:

1. Catholic doctors say proposed contraceptive mandate not good medicine. Published in the7/25/2011edition of The Pilot
2. No Such Thing as a Free Contraceptive
3. Compare 2 or 3 characteristics of the US?s fragmented healthcare system to another country?s socialized health?
4. Health Plans Must Include Free Contraceptives: HHS
5. Are there any low cost for low income dental care offices?

Source: http://www.health198.com/contraceptive-mandate-is-a-boon-for-big-pharma.html

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