Groucho Marx once said, "I wouldn't want to join a club that would accept someone like me as a member." I had the same mixed feelings about AARP when, in its eyes, I became a "geezer" at age 50.
So here I am, a member in good standing for the past 12 years. At the encouragement of some readers, I became a candidate to be on AARP's national board of directors. I even received a handwritten note of appreciation from President Bill Novelli, who thanked me for volunteering my services. (It turned out to be a "thanks, but no thanks" for the time being, however, so I'll be doing what I can to help the organization at the state level.)
This week, I'm sure my fellow 32 million AARP members also received the same package of materials I did regarding the Dorgan-Snowe bill, which should at least put a dent in the legalized price fixing enjoyed by the drug industry.
If you received the package, just sign the three letters to your representatives and send them in. As fellow member Martha Stewart would say, "It's a good thing."
Here's how the price fixing works that we geezers need to stop: Back in 1990, Congress required drug manufacturers to discount by 15 percent the price of drugs paid for by Medicaid and the Veterans Administration.
That sounds great, but the law of unintended consequences immediately seized the day and created higher prices that are now unassailable.
How does this bizarre drug industry hall of mirrors work? Let me explain.
Just before the law passed, drug manufacturers raised the price of drugs dramatically. It's like, who gets excited about a 30 percent discount at Neiman Marcus when we smart shoppers know that the same garment can be bought at Marshalls for even less?
Before the "discount" system went into place, the large government purchasers of drugs could negotiate through competitive bidding. After the new law went into effect, the drug industry was forced to sell its drugs to the government for the lowest price charged to anyone else in the private sector.
This had the effect of making sure that nobody in the private sector ever got a deal. It would have lowered the tide, leaving all prices charged to the government down there on the mud flats. Offering a deal to some private buyer, like Walgreens, that might represent 1 percent of the market suddenly drops the total revenue on what you get to charge the 800-pound gorilla buying 15 percent of your product. And this is dictated by law.
If you're a drug company, our government steps in and punishes you if you break ranks. It's also kept secret because it's so despicable.
This is the pricing mechanism and protection that the drug industry fought so hard to protect as part of the new drug benefit. If your lowest price offered to any customer determined what you charged your biggest customer, wouldn't that contaminate any semblance of a free market? Where are those free market think tanks when we need them?
We now know that nobody in Congress or the administration is objecting to this condition, because they've all been bought off.
How do I know all this? Because I stumbled upon a December 2002 article in Forbes by Ed Rogoff and Hany Guirguis called "Legalized Price-fixing."
I wasn't paying much attention in 2002 because frankly, I wasn't buying any drugs. But now I really care -- and so should you, because we will be paying a lot more in taxes sooner or later to support this travesty spawned as a byproduct of our unprecedented level of corruption in government.
The key to the Dorgan-Snowe bill is that it would prohibit drug companies from limiting what they sell to Canada. This is a way to get around the current price-fixing legislation, which apparently sets prices based on the lowest price sold to just U.S. purchasers.
This explains why the same drugs in Canada are so much cheaper. They can be sold up there as a result of negotiated, competitive bidding without impacting the pricing to government buyers down here. It explains why drug company managers are apoplectic at the thought of free markets operating to end corporate welfare as they have known it.
The Dorgan-Snowe bill is a bipartisan effort that deserves to succeed. It is the camel's nose in the tent. Just a few month's worth of long caravans of trailer trucks hauling drugs into Canada will open the window of opportunity for the same drugs to be purchased by U.S. citizens at huge savings over the Internet.
Correcting the damage has a long way to go, but thanks to two fellow AARP members who represent us in the Senate, we have at least begun.
After all, we can only eat an elephant one bite at a time, but 32 million of us taking that bite can vaporize the largest of beasts -- not to mention the politicians who supported them.