Today's Lettre de Cachet

In keeping with President Obama’s request that patriotic Americans call out those who are spreading misleading information about healthcare reform, I must call out none other than New York Times columnist, Bob Herbert.

In his column today, “This is Reform?”,  Mr. Hebert writes about “the deal” struck between the White House and the research-based pharmaceutical industry, He writes, “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.”

A few points of clarification.  

First of all, the net annual profit of the top 20 innovator pharmaceutical companies is about $110 billion.  Anyone who pays taxes knows the difference between gross and net, so it’s not unfair to ask if Mr. Herbert was trying to be purposefully misleading.

Second, that same industry invests $60 billion a year in research and development.  A fact entirely absent from Mr. Herbert’s analysis.

And, finally, Mr. Herbert omits the fact that on-patent pharmaceuticals represent about only 8% of our entire national healthcare spend.  8 cents on the healthcare dollar.

Madame Defarge, take note and keep knitting.