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Robbing Peter to pay Paul

One of the fascinations of life is to look at idioms. More often than not, they capture wisdom in just a few brief words. Take the title to this article. Literally, it means you are prepared to commit a crime to pay off a debt but it shows a more general circularity. If you borrowed from Peter to repay Paul, you would still be in debt. You would be no better off. In fact, you might be worse off if Peter charged a higher rate of interest than Paul. Except, there might be times when the robbery brings you out ahead of the game. Where you could get away with the “crime” and at least be no worse off. In some cases, you might even be better off.

Let’s go back a few brief months to a press conference called by President Obama. He was pressing on with his campaign pledge to reform the healthcare industry and he wanted to give the various players a chance to show they were on his side. In this case, the moguls from the pharmaceutical industry made a pledge in support of reform. They were prepared to make cuts of $8 billion a year in the price of drugs sold to the people of America. Put another way. If the premium rates you pay for health insurance are to fall, the cost of drugs and services also have to fall. That way the insurers still make their profit, but you get the same drugs and services at a lower price.

Now, if you were sitting in the board rooms of the drug companies, what would you be thinking? To avoid being humiliated and made to look really bad on national television, you have to pony up $8 billion in cuts next year. What will your stockholders say when you report seriously reduced profits and no dividends? They will not be happy bunnies. So you decide to raise prices this year. That way, when you cut them next year, you are no worse off. Perhaps no-one will notice. Well, industry watchers have noticed. The wholesale prices of branded drugs have been raised by an average of 9% since the start of this year. This at a time when the Consumer Price Index has actually been falling. This at a time when the prices of the generic drugs have been falling because of price competition. The result is a new record. Experts believe the total price paid by you for drugs next years will be more than $300 billion. Assuming, of course, you do not buy your drugs from trusted online pharmacies at prices well below the usual wholesale prices paid by your neighborhood drug store.

In one sense, this should not affect you. This article is written for people with an interest in ambien and, in our most rational moments, we all admit the best cure for insomnia is cognitive behavioral therapy. Except that is not always available in your area or affordable. So millions depend on this drug to get us to sleep and to keep us asleep until dawn. As the cost of branded drugs rises faster than ever, you are the ones standing in for Peter and your money is being used to pay the stockholders like Paul when President Obama gets his cuts. Remember that the next time you buy ambien online and save money.