Health Care

What’s a fair price for a prescription drug? Medicare’s about to weigh in

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NPR.ORG

By Leslie Walker, Dan Gorenstein

Drugmakers around the globe are bracing for a major shakeup in how one of their largest customers does business. On Sept. 1, Medicare will target its first 10 drugs for historic price negotiations. The medications are sure to be among the country’s costliest and will likely include common treatments for cancer and diabetes.

The negotiations could save the federal government nearly $100 billion by 2031 and slash some prices Medicare pays by half. They are also the subject of multiple lawsuits by major drugmakers including Merck and Johnson & Johnson.

The power to negotiate prices directly with drug companies is one …

Federal Government

What Charles Ponzi’s Scheme and US Entitlement Programs Have in Common

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Fee Stories

Daniel Kowalski

When Charles Ponzi’s investment opportunity to sell international postage stamps was exposed to be a scam in 1920, its basic premise would forever be associated with the man’s name. A Ponzi Scheme promises investors massive returns on an investment that does not really exist. Instead, unknown to everyone but the person or people running it, old investors are paid with money that comes in from new investors. This set up usually goes undetected until the one day when the well of new investors dries up and the money stops flowing in.

The structure of Ponzi’s scheme must have really impressed the policy makers that were coming to age during this era because they would use the same set up for the nation’s new Social Security system in the 1930s. Starting in 1937, employees and employers needed to fund the system and in 1940, retirees began to draw benefits. The financial amount of these benefits dwarfed what the first retirees put in during their working careers. …