Times columnist has a numbers problem

New York Times columnist Bob Herbert isn’t happy with the way health care reform is going, complaining that the Obama administration has a  “secret and extremely troubling deal with the drug industry’s lobbying arm, the Pharmaceutical Research and Manufacturers of America”  that will result in the industry agreeing “to contribute $80 billion in savings over 10 years and to sponsor a multimillion-dollar ad campaign in support of health care reform.”

“The White House, for its part, agreed not to seek additional savings from the drug companies over those 10 years. This resulted in big grins and high fives at the drug lobby. The White House was rolled. The deal meant that the government’s ability to use its enormous purchasing power to negotiate lower drug prices was off the table… To get a sense of how sweet a deal this is for the drug industry, compare its offer of $8 billion in savings a year over 10 years with its annual profits of $300 billion a year.”

Not so fast, says Drugwonk Peter Pitts: that’s gross profit. The net profit of the top 20 pharma companies is $110 billion… (more)

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