The major provisions of the Medicare prescription drug benefit passed by the Congress in 2003
Medicare was prohibited from negotiating drug prices with the drug companies. Therefore, this meant that it had no power over the influence of drug prices. Similarly, Medicare lost its rights to fix wholesale average drug prices. Following the provision of the congress, Medicare was only given the mandate to subsidize small private drug companies but had no control over bargaining power to administer the benefits.
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Benefits of the legislation from the drug industry
One of the significant benefits resulting from the provisions was that there were no external agencies or companies such as Medicare allowed to influence drug prices since the legislation prohibited the act. Therefore, there were little restraints on drug prices. In addition, multiple private drug companies with low bargaining power were given mandate to determine prices of their own drugs. The legislation allowed expansion of the market in terms of extension of drug monopolies. Upon passing of the legislation, stock prices of big companies such as Big Pharma shot up.
The mechanisms of political influence used by the drug industry in passing the legislation
The high number of employed drug company lobbyists who were well connected to the government constituted Washington top of the list. For instance, the Defense Secretary and Budget Director were major personnel in the Industry as the CEO and Vice President of major drug companies respectively. By 2006, 26 members of congress were members of major lobbyist groups. The companies also gave generous donations and contributions to campaigns such as in the 1999-2000 elections where a total of $85 million were distributed which favored the Republicans. The industry also gives support to any number of groups owned by senior citizens such as citizens for Better Medicare, which spent $65 million in combating any form of drug price regulation.
Ways in which the drug industry has influenced the process by which FDA approves or disapproves drugs
Laxity of congress in authorizing FDA to administer monitoring and evaluation standards upon new approved drugs versus old drugs is one of the significant impacts of the drug industry. The fact that congress appointed a private company, Drugdex Information Service which is pro-pharmaceutical industry, to approve drugs without FDA consent is also an effect of the drug industry. FDA got intertwined with the pharmaceutical industry in 1992 and hence became highly dependent on the industry therefore it has to comply with congressional rulings and legislations because it is part of the administration. An increased proliferation of approved drugs also makes it impossible for FDA to employ its evaluation tools on time due to the limited time provided. FDA also succumbs to the industry pressure through its advisory committee which is comprised of experts who have vested financial interests in a number of drug companies.
Industry’s Influence in public policy process
I believe the industry had a lot of influence in the policy process illegitimately. This is because it used the congress’ stakeholders (who have vested financial interests in a number of drug companies) to lobby for its best interest which is a free deregulated price market without distortion or ambush by any exterior company or agency on the same. This was the case with the passed legislation which showed increased investor confidence in the industry that resulted to an increase in the stock prices of the major drug companies.
Adams, Mike. “Americans fed up with drug industry influence and FDA corruption”. 2011. Web.