The American Spectator

The Public Policy

Late Wednesday the Senate voted in favor of a resolution supporting government control over "negotiating" for the price of 60 percent of all medicines sold in the United States. The two supporters of the resolution peddle the same lies (yes, lies) to win votes for a measure that itself is a lie: Olympia Snowe claimed, "The rapidly escalating price of prescription drugs threatens to undermine the very drug benefit Congress passed to deliver real savings to seniors."

Rapidly escalating? Drug prices are increasing at the same rate as other medical expenditures. Drug costs are going up more slowly. Drug coverage is expanding. True, co-pays have been rapidly escalating, but that's a function of health plans, not drug companies. So Snowe is lying or ignorant or both.

She went on to say, "Our amendment manages costs in a common-sense way -- harnessing the buying power of millions of seniors to give them a better value for their healthcare dollar." According to the Los Angeles Times, "Sen. Ron Wyden (D-Ore.), the other sponsor, said over and over: 'This is not price controls.'"

Okay, let's take them at their word that it's not price controls. Let's say it is the government being the biggest single purchaser of medications in the entire world and that as a result it has huge leverage over prices. That's just common sense, right? Since drugs are only 12 percent of total health-care spending, why not extend this common sense approach to other important purchases, especially those not paid for by third parties? The Republicans who voted for this "negotiation" resolution include those from oil producing and refining states (Richard Shelby, Tim Hutchinson, Lisa Murkowski, and Ted Stevens). Why not have the federal government simply buy up oil directly and negotiate the price with oil companies? Do the same for natural gas. Why not do the same for agricultural products? Actually we do that, except we call those price supports and jack those prices up above market rates. But what if we just had the government use its power to ratchet down food prices so others may eat? Why should drugs be the only target of this negotiation?

Wyden was prancing around the Senate floor telling colleagues that negotiations involved no price controls or formularies, i.e. lists of medicines that would be reimbursed by government because the price was right. Others would not be allowed except under limited conditions. That's ridiculous. How do you negotiate prices without using the hammer of denying a company access to your customer? That's how every single-payer health system does it. That's how Medicaid does it and the Veterans Affairs system does it. So Wyden was lying and is lying about the formulary issue.

If you want to know how the Snowe-Wyden proposal would really work, just ask Catherine Pytel who knows first hand how a government-run drug negotiation affects people. She lives in Canada, where the government "negotiates" drug prices exactly how Snowe and Wyden want the federal government to do with Medicare.

She is waiting to use a drug called Zevalin, which works in 80 percent of people with advanced forms of large cell lymphoma. It gives them an average of an additional year of disease-free life and sometimes is a cure. It has been used in America since our FDA approved it in 2003. But in Canada, it took two years to "negotiate" a price and even then only two provinces decided to put it on their formulary since they in turn want to negotiate prices further. While Catherine received a free dose of the drug from its developer, the province in which she lives, Ontario, decided not to pay for Zevalin, acting on a recommendation from the Drug Quality and Therapeutics Committee. That's one of those expert advisory committees that Snowe and Wyde would put in place to make sure health-care costs are managed in a common sense way.

As a result, "many hospitals in Ontario are not set up to administer the drug," reports the Toronto Globe and Mail. Neither are many others throughout Canada. Instead, Catherine has to wait to find a clinical trial that uses the medicine of which there are few because as Canada delays and restricts more and more cancer drugs, there are fewer hospitals doing clinical trials. Why invest in resources to administer a medicine and care for patients if the government is not going to pay for it?

"They're saying this drug, it's taken people from palliative care and made them feel better," Catherine told the Globe and Mail. "This situation doesn't make any sense to me. They have these laws where you can't commit suicide and then they turn around and do this to me. They might as well be handing me a gun."

Americans United, a union and Democrat Party front group, is now pouring money into key congressional districts to push for enactment of the Snowe-Wyden resolution. So it is important for politicians of both parties to understand that the proposal will hand millions of seniors the same gun the Canadian government has given to Catherine: Such "common sense, non-price control negotiations" are killing people in Canada and elsewhere. They will kill Americans too if it becomes law here.

topics:
Medicaid, Law, Oil, Medicare