The suit cites as an example the manipulation of pricing by The Pharmacia Corp. for its breast cancer drug Adriamycin. The company, now acquired by Pfizer, told the State of Illinois Medicaid system that the average wholesale price for the drug was $241.36 a month. The Illinois Medicaid system reimbursed Pharmacia based on that figure. In fact the company was selling the drug to others at as little as $38.43 a month. About 1.8 million Illinois citizens are covered by the Medicaid system which covers prescription drugs. 19 other States are pursuing similar action. Getting a handle on pharmaceutical price manipulation is on top of the list of issues for the National Association of Attorneys General.

A congressional investigation found that drug pricing manipulation cost government insurers at least $800 Million annually and their covered patients another $200 through co-pays. Despite that knowledge the Bush Administration’s vaunted Medicare Prescription Drug benefit forbids any attempt to negotiate prices with the manufacturers. After the bill was safely passed Medicare’s analysts admitted that they had wildly understated the projected cost raising the estimate from $400 Billion over 10 years to $530 Billion over the period. The current budget that the President sent to the Hill yesterday puts the cost at closer to $1 Trillion over the program’s first decade. While the DC Republicans say they are for controlling costs all they do is open up another tap to drain the program into the pockets of the health care industries.

The Republicans in Washington talk a good fight but they refuse to come to grips with the idea that the only way to control costs is to control costs. The President wants to privatize the health care system along with privatizing Social Security. Again today he touted personal health savings accounts as a way of controlling health care costs. Somehow he thinks that if we are spending our “own” money then doctors, hospitals and drug companies will charge less. Or is it his hope that if we are not insulated by insurance plans and Medicare we will go to the doctor less, take less medicine, hurt longer, and die sooner? That would take care of some of the red ink in his Social Security Plan.

It will take more than that to get control of the health care cost upwards spiral. The Attorneys General are on the right track. If they pop a few pill makers in the process and make them cough up their exorbitant profits in restitution so much the better. When they are through with the drug companies perhaps they will take on the administration top heavy HMOs and Insurance companies as well.