Drugs Prices Much Higher in U.S. Than in Other Countries: Research

By | October 12, 2015

  • October 12, 2015 at 11:39 am
    Some Guy says:
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    Could the difference be….the add on costs created by Obamacare? [hint – the answer is yes]

    • October 12, 2015 at 4:30 pm
      Bill says:
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      Right, because this issue just cropped up in the past couple of years. NOT!! We’ve always had higher drug prices than the rest of the world.

      • October 16, 2015 at 5:05 pm
        Just Sayin' says:
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        Maybe it has to do with a sue happy public?

  • October 12, 2015 at 12:15 pm
    ExciteBiker says:
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    Medicare Part D is partly to blame for this. To remind, Part D was passed by the GOP under George Bush. Billy Tauzin memorably described how he “loved his grandmother” in his push to pass the bill.

    Under Medicare Part D the federal government is not permitted to negotiate the prices of drugs with the drug companies like they do in other programs. Sounds crazy, but it’s true. Most would agree we are paying far, far more than we should be. There are generics that cost Medicare D more than 700% as much as other programs (such as the VA) pay for the very same drugs. A “most conservative” estimate of the savings we would gain by negotiating prices is $50,000,000,000 per year. For PhRMA, this legislated ban on negotiated prices is the gift that keeps on giving– and we the taxpayers are footing the bill.

    Billy Tauzin retired soon after steering the bill through Congress and took a $2 million per year job as the president of PhRMA (isn’t that convenient?). He was joined by more than a dozen congressional aides who all quit to take lobbying jobs with pharmaceuticals.

    Medicare Part D was passed fully unfunded– it was 100% deficit-financed and added trillions to the public debt. It is the biggest unfunded entitlement program passed in a generation. By the year 2019 Part D alone will cost taxpayers over $150,000,000,000 per year. People like former US Comptroller General David Walker, a Republican, have called Part D “the most fiscally irresponsible piece of legislation since the 1960s.” Individuals voting in favor of the bill included John Boehner and Paul Ryan.

    This is just one example of why our drug prices are out of control.

    Now the TPP and TTIP “free trade” agreements seek to export our insane drug prices to the rest of the developed world.

    • October 12, 2015 at 5:41 pm
      bob says:
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      “Medicare Part D was passed fully unfunded– it was 100% deficit-financed and added trillions to the public debt.”

      “http://economix.blogs.nytimes.com/2013/11/19/medicare-part-d-republican-budget-busting/?_r=0”

      I only chose this source because you can see how much he is bashing Bush, so I doubt he’s biased.

      Trillions eh?

      I will agree we should have bargaining, I just believe you greatly misquoted what bargaining will do. It will likely cut the cost of medicare part d in half. However you implied that medicare part d was a multi trillion dollar spending bill to date, while it is not.

      Also: Stop trying to link republicans who voted for the bill to aiding pharmacy companies. Voting for a bill the filled the gap for a clearly needed benefit (which democrats don’t want to do away with either) does not mean you voted for it due to pharmacies. For example: The healthcare bill passed by Obama. Democrats voted for it, and some republicans. Did they like the entire bill? No. Some people on both ends voted for areas they didn’t like in the name of getting A bill passed. ONE.

    • October 12, 2015 at 5:43 pm
      bob says:
    • October 12, 2015 at 6:42 pm
      bob says:
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      Let me get this straight, I agree with you and you dislike my posts in that I tell you outright that you completely mislead people about the cost of medicare part d? (Scare tactics at worst, bad information at best, which turns people away from truth and what is best).

      I have told Agent in the past my problem with his commentary is even if he is right, he often is wrong on the methodology.

      I can chalk my statement to you up to that.

      I actually will agree on this particular aspect with the democrat opinion of this post:

      http://www.bloombergview.com/articles/2015-09-24/let-medicare-tackle-high-drug-costs

    • October 13, 2015 at 10:04 am
      Agent says:
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      Hey Excite, before you blame Bush entirely for Part D, the bill enjoyed wide bi-partisan support, unlike Obamacare which was totally partisan from the word Go. I don’t remember any Democrat jumping up and down protesting the legislation. They tend to like entitlements.

  • October 12, 2015 at 1:34 pm
    Dave says:
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    Blame it on 1(800) BAD-DRUG. The trial lawyers and all their suits against all the drug companies no matter what the drug require the drug companies to charge more for drugs they sell in the states to deal with all the lawsuits.
    https://www.youtube.com/watch?v=N9HcWd5ifBA&index=79&list=FL9lJuRBjktDPY_TeM76IBSw

    • October 12, 2015 at 3:10 pm
      Agent says:
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      I am with you Dave. The rise of class action suits against many Pharma companies has to hurt the cost of drugs. Big lawyers advertise all the time that if you have taken —- drug, call us and join the class action suit. Also, the time it takes to bring a drug in as approved by USDA is far longer than anywhere else in the world.

    • October 12, 2015 at 5:43 pm
      bob says:
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      I agree something needs to be done regarding this concept.

  • October 12, 2015 at 1:57 pm
    TX Agent says:
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    I read an article that most of the research and development was actually the government (forgot the branch) and NOT the drug companies. Most of the “new” medicines these companies put out are “Copy Cat” or “me too” drugs. I’m not a big government guy but if this is the case Drug Mfg don’t have a point. FYI by wife takes “Prograh” which has been out for decades to stay alive (liver transplant and not due to drinking!)., This medicine cost my carrier over $25K a year.

  • October 12, 2015 at 3:24 pm
    intergrity matters says:
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    TX Agent – The drug companies spend millions (if not billions) on R&D, not the govt. However, the drug companies also have to spend millions to get the FDA to review and approve the drugs. That is also driving up the cost, as well as, the lawyers and legal system. I believe a drug company has the exclusive rights to sell a newly patented drug for a set number of years (3 or 7 comes to mind) to recoup their R&D investment. After that, the drug can be copied by others for generic application.

    How did everyone like the statement

    “That makes it by far the most profitable market for pharmaceutical companies, leading to complaints that Americans are effectively subsidizing health systems elsewhere.”?

    Hmmm, sounds eerily familiar. Isn’t this what working Americans are expected to do under Obamacare? Pay more for their healthcare so others can get free healthcare? Where is the democratic compassion to the poor people in underdeveloped countries that can’t pay for their meds?

    I wouldn’t be surprised if we pay more for our TVs, iPhones and other “necessities” of life. Wait…don’t people who live in NY and Calif pay more for things than people in MS and SC? How fair is that?

    For those who don’t know, it’s called the “cost of living adjustment”. If you live in one of those states and don’t like it, you are free to move. Of course, the wages won’t be as high if you move to MS or SC.

    • October 12, 2015 at 5:45 pm
      bob says:
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      I’m going to have to research this one more.

      Very interesting thoughts on this one Integrity.

      This is what I like to see.

    • October 13, 2015 at 9:57 am
      Agent says:
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      integrity, apparently a lot of people are moving from Blue States to the South because of heavy taxation, high cost of living and fewer job opportunities. In our industry, Liberty Mutual is opening a very large office in Plano (DFW)with anticipated 4,000 employees needed there. Why would Liberty do that?

      A few weeks back on this blog, there was an article about 500,000 citizens leaving NY. Gee, I wonder why.

    • October 13, 2015 at 10:00 am
      David says:
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      The only reason drug companies get away with charging Americans absurdly high drug prices is because we let them. Our politicians have created an environment in which we are constantly getting screwed in several different directions. I think there are 4 primary drivers of our high drug costs.

      1. We let drug companies advertise. As I mentioned below, 9 out of the 10 largest pharmaceutical makers spend billions of dollars more on marketing than they do on research, which only serves to drives up costs. Most of the rest of the world bans pharma from advertising drugs, so we could potentially be saving billions of dollars per year just by prohibiting this.

      2. The single largest buyer of drugs in our country (Medicare) is legally prohibited from negotiating prices. Every other first world country has a national health care system that bargains with drug companies for lower prices, because they’re the only game in town. According to an article Bob posted above, we would be saving $16 billion per year just by giving Medicare the ability to use its market power to negotiate.

      3. We have a bunch of stupid regulations and IP protections that favor rent-seeking. A current example is the former hedge fund manager Martin Shkreli buying up the rights to Daraprim, a drug that tens of thousands of people with HIV and cancer need every year in order to live. He found a way to game our current regulatory system to create a virtual monopoly on a 60 year old drug and raise prices over 5000%. If a competitor does try to make a generic version they’ll incur tens of millions of dollars in costs to get FDA approval. All Shkreli has to do is temporarily lower the prices to run them out of business and then he can jack the prices back up to whatever he wants to gouge us for.

      4. We live in an overly litigious society. Drug companies are constantly the target for frivolous lawsuits and have to spend tens of millions per year retaining teams of lawyers to defend themselves.

      • October 13, 2015 at 12:46 pm
        bob says:
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        1. I have mixed feelings here, would we instead let the doctors give us the options? They might be behind on options. My father had such a case when it came to medication for his heart. The doctor just didn’t know a better one with no affect on another health problem he had existed. I’m not sure how we might have drug information available without marketing to some degree.

        2. I am pleased that you used my link. I can agree with liberals on some areas.

        3. I don’t know anything regarding Item 3 with Martin Shkreli. I’ll look into this one, however, are you suggesting we do away with being able to buy a drug company? How do you propose we fix this one? I know that sounds condescending, I’m really not trying to be.

        4. Agreed.

        • October 13, 2015 at 12:54 pm
          Agent says:
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          Bob, I am not opposed to the Pharma companies telling the country about their meds. They are coming out with new drugs all the time. After listing the benefits, they do throw in all the side effects and they say to consult with your doctor before trying them. People can go online, find out about the drug they saw advertised and then call their doctor to see if it could be tried. There is nothing wrong with that at all. Frankly, I don’t know how the doctors stay up with all the medications that come out all the time so they may need some education as well.

          • October 13, 2015 at 1:37 pm
            Bob says:
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            Medical science is certainly an interesting creature.

        • October 13, 2015 at 2:51 pm
          David says:
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          1. I say no direct to consumer advertising, as many studies have shown that such advertising does not lead to improved quality of care or increased rates of early prevention. All it does is lead to over-prescribing of heavily marketed treatments.

          http://www.annualreviews.org/doi/abs/10.1146/annurev-publhealth-031811-124540?journalCode=publhealth

          Doctors do need to be informed of new drugs coming on to the market, but somehow I don’t think the $24 billion per year the pharmaceutical industry spends on marketing to them is going purely towards education about new treatments. They’re still throwing a ton of money in the form of kickbacks to doctors who prescribe certain medications, and it needs to stop.

          I’m by no means a medical expert so I don’t know how to fix this particular problem. Perhaps more coordination between pharmacists and doctors could fix any knowledge gaps doctors have about new treatments.

          3. I’m saying we need a massive overhaul on FDA regulations, especially when it allows for situations like the one I described above to happen. Patents should only last 5-10 years at most, and no one should be allowed to monopolize old drugs and sell them for whatever massively inflated price they want.

          In the Daraprim example, Shkreli bought the rights to the drug and arbitrarily jacked up prices from $13 per pill to $750 per pill. In our current regulatory structure it is economically unfeasible to come up with a competing generic, so a person who needs that pill to live can basically be gouged for whatever he sees fit to charge. Unacceptable.

          As for solutions to that, two immediately come to mind. One is to allow importation of medicine from foreign countries. In India, Daraprim costs $0.22 per pill, but it is currently illegal to import it due to FDA regulations. Alternatively, we could have the government step in and produce generics after the patents on pills expire. They would be following the Constitutional mandate of providing for the general welfare of its citizens for a change.

          • October 13, 2015 at 4:08 pm
            bob says:
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            I’ll ponder this more as I have time.

      • October 19, 2015 at 9:30 am
        Dave says:
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        Again, it costs drug companies much more money to sell drugs in the US than any other part of the world due to our screwed up legal system where the drug companies pay billions in claims and insurance costs which they do not incur overseas. Your estimate of “tens of millions” of dollars spent defending frivolous lawsuits grossly underestimates the problem. Whereas the cost to insure products embedded in the costs of products is usually 0.1% to 10% (depending on the product involved) in the case of drugs it is more like 20-30%. Fix that problem and you get a serious price reduction. But the Democrats and liberals are firmly in the back pockets of the 1-800-BAD-DRUG crowd. No tort reform is coming.
        https://www.youtube.com/watch?v=N9HcWd5ifBA&index=79&list=FL9lJuRBjktDPY_TeM76IBSw

  • October 12, 2015 at 5:47 pm
    Chuck says:
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    Did everyone forget all of the money spent on advertisements?
    Anyone checked out ratio of Pharma Reps to Doctors?

    • October 13, 2015 at 9:11 am
      David says:
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      Good point Chuck. Out of the 10 largest pharmaceutical companies, 9 of them spend more on marketing than they do on research.

      http://www.washingtonpost.com/news/wonkblog/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/

    • October 14, 2015 at 12:52 pm
      Agent says:
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      Pharma reps are not all bad as some suggest. Their job is to educate doctors on their product and how it will help patients who have certain conditions/diseases. The side effects are also brought out and it is up to the doctor to run the needed tests before prescribing a medication. The medication may be right for a small % of the population. It could be effective and extend life for the ones who can tolerate the medication.

      • October 14, 2015 at 2:54 pm
        rnr_risk says:
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        Not even close. The job of pharmaceutical reps is to sell product (kind of like an insurance agent!). They are compensated based on sales – not on how good they are at “educating” buyers.

        • October 19, 2015 at 9:55 am
          Agent says:
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          Both of you are wrong. I have a PA daughter who works for a doctor’s practice. The drug reps are always coming in to their office to educate everyone who prescribes medicine on their new products, what tests have to be run etc. They leave printed info as well. Sales are a by product of the education process. What doctor in his right mind would prescribe a medicine he doesn’t know about and what the side effects would be?

          By the way, an insurance agent educates buyers on the insurance product and how it will protect them better before they make a sale.

      • October 15, 2015 at 12:15 pm
        confused says:
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        do you SERIOUSLY think pharmaceutical rep’s get paid to educate doctors as opposed to them getting paid commissions based on the amount of their company’s drug the doctors prescribe?

        • October 15, 2015 at 12:36 pm
          bob says:
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          Now I can’t decide what your message is here.

          Is it that doctors are too stupid to buy the better product, or too greedy?

          They would never get paid to educate. What type of structure would you suggest to measure the level of education?

          You’re being disingenuous.

          • October 15, 2015 at 12:39 pm
            confused says:
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            you replied to my comment bob but i am not sure if you are talking to me. i never said pharma rep’s get paid to educate doctors and i never said they should. are you really asking agent those questions and just posted them under my comment by accident?

          • October 15, 2015 at 1:28 pm
            bob says:
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            “do you SERIOUSLY think pharmaceutical rep’s get paid to educate doctors as opposed to them getting paid commissions based on the amount of their company’s drug the doctors prescribe?”

            It applies to that. Should we pay the reps to educate? How do we measure that? What system do you propose for payment?

            As for the above: The only way it would matter if the doctors are being marketed to by commission based employees is if the doctors are either stupid (don’t refer drugs based on good education) or greedy (buy drugs because somehow they make money off of it through rebates).

            Whether the agent is paid on commission is to me, irrelevant. We pay on commission base in the insurance industry.

            It seems the best argument to make at that point would not be the commissions, but rather the methods.

            For example: Some people here have said no marketing should be allowed.

            I don’t think we should go that far on the spectrum.

            Perhaps a group who is paid a set amount by the government to monitor various drugs for aliments, have drug companies required to submit their drug name, type, aliment purpose, and studies to this group. This group would then publish a complete report of similar drugs for similar aliments for doctors to review with all drugs. So this way no one company is marketing their product as superior for no reason at all and all products would be up for review. I realize some of the more conservative people wouldn’t appreciate this but I could see it working.

            What do you suggest?

          • October 15, 2015 at 1:34 pm
            bob says:
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            As a side comment these groups already do these studies so giving the results to the alternate group would be a means of free marketing for them if they had the best product, or rather very low cost as furnishing documents isn’t all that hard to do.

            Now many conservatives won’t like an independent group financed by the government handling this. I don’t actually mind in this case. When thinking about simply studying existing drugs by their own studies submitted to you…Heck, students in college could do it as part of their graduation to get a more impressive resume. If we did that College students could review the studies, send their opinions to someone in this funded entity to assist, and the cost of just the extremely knowledgeable folks would be needed. We could literally end up with a program that is only multi millions to cover and is the size of say planned parenthood, instead of 16 billion a year.

          • October 15, 2015 at 1:36 pm
            bob says:
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            So as a side comment when I called you disingenuous I meant this because you didn’t put your alternate means as an option.

            I think you do have one. I could be wrong. So what are your thoughts?

          • October 16, 2015 at 9:23 am
            confused says:
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            my initial thought is that agent was wrong to say a pharmaceutical rep’s job is to educate doctors as it is obvious their job is to sell as many drugs as possible.

            i do not know why you are calling me disingenuous for not providing an alternative solution without knowing if i have an issue with the way it’s run now. since i do not have an issue with the current system, i have no need to provide an alternative solution.

          • October 16, 2015 at 12:35 pm
            bob says:
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            “my initial thought is that agent was wrong to say a pharmaceutical rep’s job is to educate doctors as it is obvious their job is to sell as many drugs as possible.”

            My thoughts are thus:

            By definition if you actually had a solution but weren’t putting it out you were being disingenuous.

            But while that is the case it seemed a lot more likely than you were just saying what you said above. The comment above doesn’t make sense unless you have an alternative.

            I get paid to sell insurance too rather than good insurance. There is practically no way to adjust my pay based on whether or not I sell the best product.

            Would you say that I was not educating clients because I get paid based on sales?

            You’re in the insurance field, your comment doesn’t make sense. The pharmaceutical rep’s job is a lot like an agent.

            The alternate means of paying wouldn’t make sense.

            It would require a different system entirely.

            I think Agent was making a reasonable comment.

            Yours I expected had more to add (ergo disingenuous) but it appears I was wrong.

            What meaning does your comment hold then? It doesn’t just stand up on it’s own.

            These reps don’t get paid to educate….So educating doesn’t happen?

            These reps don’t get paid to educate, so the area of a circle is pi r squared.

            Both these statements are just as silly.

          • October 16, 2015 at 1:04 pm
            confused says:
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            “it seemed a lot more likely than you were just saying what you said above” right. i said what i wanted to say. that was my intent – to say the words that correctly indicated what i felt about the post to which i was replying.

          • October 19, 2015 at 1:20 pm
            bob says:
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            You are far too simple in thought.

            You missed the point of my posts by your final reply.

            So then your point served no purpose in the argument. You just said it to say it.

            I told you I assumed you were disingenuous because I thought you probably were a little smarter than to throw out one liners with no purpose.

            Your reply seems to be something to the affect of “stop telling me what I’m saying” given what you replied.

            Pardon me, but I left options and gave you the ability to say what you were doing. So don’t play this “you’re telling me what I’m saying” crap, ok?

            Now back on topic to reiterate: Your post had no substance and no point. I have to question it’s purpose…Because that’s a part of being logical and rational.

    • October 19, 2015 at 9:32 am
      Dave says:
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      And what about all the money paid for advertisements from the 1(800) BAD-DRUG crowd. Where do you think that money comes from?

      • October 19, 2015 at 5:12 pm
        Agent says:
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        Bob, why do I assume that Confused is not in the business of selling insurance? He apparently doesn’t equate the sales process of one that educates the potential insured before the sale is made. It is much the same way with drug reps. Why would a doctor recommend drugs to his patients before he has the info on them? That is the drug reps job and if he is successful convincing the doctor of the benefits of the drug, the sales will be there.

        • October 19, 2015 at 5:24 pm
          bob says:
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          I still am not sure what to think on anything, but his comments didn’t add or subtract from the argument.

          It’s frustrating to see that when I see your comments with ideas, liberals with ideas, and Dave with ideas…

          And then people just saying essentially insults.

          Maybe Confused is not in the agent side of insurance. That might explain his comments. I am not sure.

          • October 20, 2015 at 3:00 pm
            Agent says:
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            Bob, like so many liberals on this site, they see one of my comments and automatically dismiss them and then throw in an insult for good measure. I promise you that not one of them is an Independent agent/business owner.

  • October 15, 2015 at 12:36 pm
    bob says:
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    Sorry I should say to push the better product or too greedy.

    I’m tired.

  • October 16, 2015 at 3:09 pm
    Trust me I am not a liberal says:
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    They needed to research something that is already known?!! How the hell much did THAT cost!??

    • October 16, 2015 at 3:51 pm
      Rosenblatt says:
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      One of two possible replies for you….

      1) About as much as the NFL and Goodell spent on the Wells report

      2) Obviously you missed the whole point of that story, Brian (I read your comment in Thurgood Jenkins’ voice – not sure if you were going for that reference or not)

      • October 20, 2015 at 3:05 pm
        Agent says:
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        And the NFL is related to what on this story?

        By the way, it was laughable on the Monday night game between the Giants and the Eagles. All the pre-game was about how great Eli was and most predicted a Giant win. In one of the worst, sloppiest games ever played on Monday night with 7 turnovers, the Eagles handed Manning his head. So much for the talk that the Giants had their act together and would waltz off with the NFL Least division. The division winner will be lucky to have an 8-8 record with the level of mediocrity in that division.



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