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Wednesday, February 21, 2007
John Stossel :: Townhall.com Columnist
No Drug Price Controls
by John Stossel
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Will the Dems' health care Christmas Present to America be an improvement or detriment to our health care system?


The occasional success makes it all worthwhile.

So when the government uses its muscle to force prices to sub-market levels, the drug companies will develop fewer life-saving drugs. We will suffer more pain and live shorter lives.

Medicare participants probably won't even have access to some drugs that are already developed. To see this we need only look at the Department of Veterans Affairs. I happened to have lunch with Sen. Hillary Clinton recently. When I went into one of my usual libertarian rants about free markets, Ms. Clinton cited the VA as an example of government success. Indeed, under her husband's administration, the Veterans Health Administration came to provide the "best care anywhere," according to The Washington Monthly. Great.

But government monopolies like the VA never embrace innovation in the same way the private market does. And sure enough, the VA now rations drugs. If you are a VA patient and you need a new and expensive drug, you can't get it. Writes Sally Pipes, president of the Pacific Research Institute and author of "Miracle Cure: How to Solve America's Health-Care Crisis and Why Canada Isn't the Answer", "Only 19 percent of drugs approved by the FDA since 2000 are listed on the VA formulary, and only 38 percent of drugs approved in the 1990s are listed. ... ".

In other words, the department keeps a rein on costs by withholding drugs from veterans.

The giant Medicare drug program, which created the cost problem the Democrats say they will solve, shouldn't have been created. We ought to get our drugs through the private marketplace or from private charities. If government must be involved, at least let it be through the states so they can compete against each other.

The last thing we should do is give federal officials more power. When government controls prices, it must eventually ration supplies. Consumers suffer. When the product is medicine, the results could be catastrophic.

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About The Author
John Stossel blogs at http://blogs.abcnews.com/johnstossel/ is an award-winning news correspondent and author of Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know is Wrong.
 
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©Creators Syndicate
drug intervention
The government should educate people on how to use drugs and use minimum daily dosages. There should be divided interventions and thus competition can control the prices.

Raj
http://www.drug-intervention.com/kansas-drug-intervention.h tml

John Stossel, Coolmoose and Pirate

Interesting and informed comments, all. And I apologize for the length of my comments here, but I believe them to be necessary.

I fought tooth and nail to keep the Medicare Modernization Act, with its Prescription Drug Plan, from becoming law.

My thinking was that there was no reasonable way to "lower" the prices of drugs when there are so many middlemen to consider. Not only must middlemen be considered, but simply try to imagine the increased numbers of insurance company employees, increased numbers of Medicare employees, increased space needed for these personnel, and increased numbers of computers, increased health care and prescription drug coverage for all these additional personnel. It boggles the mind to consider it. To believe this will help "lower" drug prices is madness.

Adding insult to injury, I have no idea of the current number of billions of dollars of taxpayer funds are provided to the National Institutes of Health -- but it is a huge number. These billions of dollars are used for, among other things, drug and pharmaceutical research and development. Who benefits from this? Well, first of all, of course, drug companies do.

Therefore, I do not need to drag out two or three hankies for all the tears shed for the horrendous costs that must be borne by the poor drug companies in their research and development. Those companies are getting a lot of help from Uncle Sam. The result: taxpayers pay three or four times, counting Prescription Drug Plan assistance for seniors utilizing it.

And let us not forget that much of drug companies' "research and development" pertains directly to market research and development, not drug research and development. Please let us also not forget the millions of dollars spent on drug company advertising. While we are on the subject, let us also not forget the tax write-offs drug manufacturers receive from the government for research and development, and, of course, advertising. And don't forget manufacturing, either. Tax write-offs for companies using knowledge created by government-paid personnel do make me somewhat irritable.

Let us also not forget that there are many occasions where drug companies pay off generic manufacturers not to manufacture generics. That way, the original patent holder can extend the time frame during which it may continue charging the highest prices. Sometimes the companies get caught at this game, but not always.

It probably is not nice to instill fear, but it is nice to instill information. Attempt to learn how many foreign manufacturing facilities are utilized by American drug manufacturers. The numbers are unknown, but perhaps they can be rooted out by a good TV journalist/writer. John Stossel, maybe?

After discovering how many foreign manufacturing facilities are in use by American drug companies, then attempt to learn how often the FDA inspects these facilities. Attempt to learn how diligent these inspections are. If you happen to be taking a medication in its original bottle that was purchased here in the U.S., try to find the country of manufacture. If you are able to find this on these bottles, it will truly mess with your mind.

In the event anyone noticed, I do not weep for drug companies.

As for Medicare, or, in this case, the Department of Health & Human Services, "negotiating" lower drug prices on behalf of the Medicare Prescription Drug Plans, please, Democrats, just think about this before voting for it. That goes for a few Republicans and perhaps Independents, too. There is the same problem here as with the Medicare Modernization Act: too many middlemen.

And here is a little-known fact: some of Wal-Mart's (and perhaps others') generic drug prices are lower than those of the VA. There is absolute proof of that. All one needs to have are copies of the formularies used by both entities.

Competition, free enterprise, plain old capitalism, along with supply and demand, will lower drug prices. Remember Milton Friedman's "Free to Choose."

We are not now free to choose.
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