The Washington Post discussed the cost of the Obama's administration's plans to close the "doughnut hole" gap in the Medicare drug benefit. The piece never mentions the fact that the United States pays far more for prescription drugs than any other country because it gives drug companies unlimited patent monopolies, allowing them to charge whatever price they want during the period in which they are granted a legal monopoly. By contrast, every other wealthy country restricts the ability of drug companies to exploit this monopoly by negotiating lower prices. If the people in the United States paid the same prices for drugs as people In Canada or Germany, then the doughnut hole could be eliminated and the drug benefit would cost less than it does currently. The article asserts at one point that 75 percent of seniors have enrolled in the Medicare drug program. This is misleading since the number includes people in Medicaid, in retiree health plans and in Medigap plans that receive subsidies from the drug benefit program.
--Dean Baker
