By Stephanie Kanwit, former general counsel of America’s Health Insurance Plans - 12/09/13 07:06 PM EST
David Balto’s Dec. 2 commentary (“Wrong prescription for drug competition”) on The Hill’s Congress Blog slams a highly respected independent agency — the Federal Trade Commission — for allegedly falling down on the job and deliberately refusing to act as sheriff to rein in pharmacy benefit managers, or PBMs.
Congress charged the FTC with policing the market for “unfair methods of competition,” and it is doing exactly that: attempting to protect the competitive process as a whole, and thus ensuring consumers’ access to affordable drugs.
While understating his own bias in favor of community pharmacies, Mr. Balto throws out loaded words like “conflict of interest” and “monopoly.” Unfortunately, the actual market dynamics get short shrift. That old, discredited charge of “conflict of interest” loses all traction when the FTC specifically conducted, at Congress’s behest, an exhaustive 18-month study that found PBM customers were not disadvantaged simply because a PBM happens to own a mail-service pharmacy. Nor do allegations of “monopoly” hold water when, as the FTC found just last year in approving a PBM merger after an lengthy investigation, dozens of PBMs of differing sizes and varying corporate structures compete vigorously for business. There simply can’t be a monopoly, or even a threat of one, when what the FTC calls “intense” competition has driven down drug costs — not kept them at high, anti-competitive levels.
The FTC and its sister enforcement agency, the Department of Justice, are only authorized to step in when they view private markets as operating improperly, such as when competitors collude or when monopolists charge higher than competitive prices. Criticizing the FTC for “lax enforcement” because you don’t like the ultimate conclusion of a full decade of its extensive, even-handed studies is simply irrational.
Raising postal rates next year is a last resort
From Ronald Stroman, deputy postmaster general, U.S. Postal Service
In response to The Hill’s recent article, “Mailers fight against postal rate hike,” (Dec. 1) the Postal Service would like your readers to get a clear understanding of why we are seeking moderate price increases of postage early next year.
Congress passed a law in 2006 that capped nearly all Postal Service mail prices at or below the rate of inflation. However, the law also included a safety provision that would allow the Postal Service to seek increases above the rate of inflation in the event of exceptional or extraordinary circumstances.
The Great Recession was one of these circumstances, and the Postal Regulatory Commission has reached this conclusion as well. Since the end of 2007, mail volume has been declining rapidly. In fact, by the end of 2010, approximately one 1 of 5 five mail pieces disappeared, primarily due to the Great Recession. The law permits the Postal Service to recoup revenue lost due to these “exceptional or extraordinary circumstances.”
Our liquidity continues to be dangerously low and our liabilities exceed our assets by approximately $40 billion. The mailing industry, America’s businesses and the public we serve depend upon the affordability of mail — and we have acted to the best of our ability to pursue every responsible avenue of cost reduction available to us under the law.
The Postal Service Board of Governors reluctantly came to a decision to raise prices as a last resort. However, if these financial challenges were alleviated by the timely enactment of laws that close a $20 billion budget gap, the Postal Service would reconsider its pricing strategy. Without the legal authority to close the budget gap, these price adjustments are necessary.
Honor Mandela with an award in his name
From Denny Freidenrich
Two things about Nelson Mandela are indisputable. First, he truly was a giant among men, and second, his passing is being mourned around the globe.
Mandela’s impact on South Africa in particular, and humanity in general, is legendary. To this end, flags are being flown at half-staff worldwide. What’s not known is how he will be remembered in the future. One way to ensure his footprint five, 10 or 50 years from now is to create the Mandela Awards. Like the Pulitzer, Nobel or CNN Heroes, the Mandela Awards would shine a light on people living out Madiba’s deepest ideals.
Mandela was born on July 18, 1918. I suggest we get to work now and present the first of many international Mandela Awards ceremonies from South Africa on July 18, 2015. This would be a fitting tribute to the man who was admired, honored and loved everywhere.
Laguna Beach, Calif.