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“Reduce your prescription drugs costs now!” the headline
screamed. The fine print mentioned millions of dollars in savings because
pharmacies would not have to meet state requirements to mark up drugs by 9%.
Citizens were asked to call their senators and show support for a bill to
lower drug costs.
The bill is being pushed by Wal-Mart and other organizations have been
recruited to support it.
And the real story is not as advertised.
Seventy years ago, Wisconsin passed a “predatory pricing’ law to keep large
companies from forcing smaller competitors out of business. The law
prohibits selling goods below cost to force a competitor out of business.
Tony Huppert drove from Spring Valley to Madison for a hearing last week to
testify against the Wal-Mart bill that would allow prescription drugs to be
sold in Wisconsin below cost.
“I have been in business for forty years,” Tony said. “There are only two
reasons to sell below cost. One is to go broke. The second one is to
eliminate competition…Trust your instincts; businesses do not sell below
costs out of the goodness of their heart.”
As a member of the Senate Committee on Public Health, Senior Issues and Job
Creation, I will be voting this week on the bill to make prescription drugs
the only product that would be exempt from the “predatory pricing” law.
What we learned at the hearing last week is quite different from what is
being told the public in the advertisements.
First, there is absolutely no requirement in the law for drugs to be marked
up 9%; the law only requires that they not be sold below cost.
Second, although the bill creates a total exemption for drugs and is being
sold as a boon to seniors, Wal-Mart intends to include only 56 additional
drugs under its $4 program and only 6 of these drugs are among the 100
seniors use most often.
Wal-Mart refused to provide any cost numbers to support their request for a
total exemption, saying their lawyers said they needed the exemption and
they wanted to be able to uniformly program all their computers nation-wide.
With the details missing, one committee member noted “We are very long on
promises and very short on actual numbers.”
It is clear that if the bill passes, we are not going to get everything
promised in the ads.
The question becomes: do we want to change a law that has been on the books
for seventy years, that has protected, at least to some extent, the
businesses that keep our small communities going?
Smaller, locally owned, community based pharmacies will go out of business
if they have to compete against a Wal-Mart that sells prescription drugs
below cost. Seniors will have to drive a lot farther to fill their
prescriptions.
That is the real choice that has to be made by committee members when we
vote this week.
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