Letters to the editor

NJBIZ STAFF//May 30, 2011//

Letters to the editor

NJBIZ STAFF//May 30, 2011//

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Law will cut insurance costs

Companies with government contracts recently filed their annual contribution disclosure forms with the Election Law Enforcement Commission. The data showed that the Citizens Campaign’s state and local pay-to-play reform laws are working, effectively cutting the flow of contributions by 38 percent since the law went into effect.

Now, the Citizens Campaign is empowering citizens to fix another wasteful practice — insurance contracting, which is rife with corruption and weak competition — by offering a model law to ensure conflict-free competition in obtaining “best price” insurance coverage.
Insurance procurement is one realm of government business that has been riddled with corruption. In just the past year, insurance records at more than 30 municipalities and school districts have been subpoenaed by the FBI. Perth Amboy and Toms River were victims in a corrupt insurance scheme that robbed their school districts of millions of dollars.

The Citizens Campaign has written a model law for school board and town government adoption that not only cleans up this system, but has the potential to save millions of dollars.
Our model law is simple. Rather than insurance companies paying brokers a commission and fees that inflate the cost of coverage, the law requires brokers to be hired by the town or school district on a competitive, flat-fee basis. Second, it requires towns and school districts to get multiple quotes, including from the State Health Benefits Program and Joint Insurance Funds. So far, citizens in Cherry Hill, Toms River, Perth Amboy and Morristown have successfully implemented this method, and saved more than $10 million.

The Citizens Campaign is now empowering citizens statewide to propose this effective model law for best-price insurance contracting, proving you don’t need to be elected officials to get things done.

Harry Pozycki, chairman
Citizens Campaign

Outraged at pharma ads

Many legislators in Congress still do not get it. The largest contributing factor in the outrageous cost of prescription drugs is advertising and promotion, estimated to be about 37 percent of the price we pay for those medicines.

The incredible waste of valuable prescription drug resources is appalling. Here’s but one example of such waste: There are hundreds of thousands of pharmaceutical company ads that appear in many thousands of magazines and newspapers each year. Most of the major pharmaceutical company ads in magazines usually contain a couple of pages of stats describing the product and its contraindications. These pages are often set in type so small that they cannot be easily read. And if one were to take the time to read it, the technical language is incomprehensible to most readers. Since only a physician may prescribe prescription drugs, such advertising properly belongs only in medical and professional journals.

Billions of dollars are spent each year on television and print media ads. These enormous costs are reflected in the price of the product. Direct-to-consumer advertising of prescription drugs should be banned. The United States and New Zealand are the only countries that permit direct-to-consumer advertising of prescription drugs — and prescription drugs in New Zealand are heavily subsidized by the government. Drug prices in most other countries are about half those in the United States.

But the most damnable outrage is the Medicare Modernization Act prescription drug language, which prohibits our government from negotiating prescription drug prices. You can bet that it was the drug companies that wrote that provision into the bill. That provision alone has cost taxpayers untold billions of dollars.

The pharmaceutical industry does not need any more protection — it needs less. It is the drug consumer who needs protection from drug companies. It’s time to rein in the pharmaceutical industry drug cartel and their congressional co-conspirators.

Paul G. Jaehnert
Vadnais Heights, Minn.