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Who Should Negotiate Drug Prices? Paul Weyrich Though many of us fought vigorously against Medicare and the other initiatives which made up President Lyndon B. Johnson's "Great Society" of the 1960s most such programs yet are with us and it is doubtful they ever will be eliminated. Our citizens are used to them and expect them to continue. It required more than 30 years to get minimal reform of the welfare system and it probably would take the collapse of Social Security for Congress to roll back some or all of the various programs, such as Medicare and Medicaid, that date back to 1965. Sad to say, it is also getting more and more difficult to find legislators of either party who are truly in favor of smaller government. I can remember when President Ronald W. Reagan spoke of eliminating entire departments, such as the U.S. Department of Education. But today it appears that regardless of their party affiliation members of the House and Senate seem to have a difficult time saying "no" to voters. After spending a few years in office most of them wish to continue their jobs and that often involves giving voters what they want. A good example is the newest entitlement, the so-called prescription drug benefit clause added to Medicare (Part D) which both Houses of Congress voted for and President George W. Bush signed into law in 2003. Few can argue with the idea behind the prescription drug benefit. Many of the oldest members of our society live on fixed incomes and need help paying for costly prescription drugs. Unfortunately, the federal government can't afford to pay for them either, at least not with "real" money from the budget. (The phenomenon of borrow and spend and borrow and spend is what keeps federal government going.) One of the original compromises that lead to passage of the prescription entitlement in 2003 was the provision that the private sector would negotiate drug prices. Now the new congressional majority leadership wants to renege on the deal. Story Continues Below
There is another truism at work. In Washington, the old saw that says "If it isn't broke, don't fix it," seldom applies. Between the President and the Congress and the alphabet soup of governmental bureaucracies eating up our tax dollars, someone is nearly always trying to fix something with unneeded legislation. And this legislation is not needed. Almost since day one, the Medicare (Part D) prescription drug program has come in under initial the budget estimates of the Congressional Budget Office (CBO). That's right: There really is a federal program that costs less than it was supposed to. I cannot remember ever hearing — or reading — those words before. However, there are those in the Senate right now who would put an end to that success. The proponents of the officially titled Medicare Fair Prescription Drug Price Act of 2007 (S 3) say they need to "fix" this program but what they really are interested in doing is giving more power to the federal government. S 3 would repeal portions of the original legislation and transfer the power to negotiate "fair" prescription prices to the Department of Health and Human Services (HHS). Pharmaceutical companies, pharmacies, and prescription drug plans (PDPs) currently negotiate very well with one another under the existing law and they had years of experience doing so before 2003. The only federal agency with extensive experience in negotiating with pharmaceuticals is the Department of Veterans Affairs, which appears to have far more complaints, fewer drugs available, and higher prices. Under the current Medicare prescription system, studies have shown that 92 percent of eligible seniors are enrolled and last year, in 2006 the average premium paid fell from the original CBO estimate of $37.00 to $23.00 per month. So far, in 2007 the average premium has fallen to $22.00 per month. The result is an 80 percent overall satisfaction rate on the part of the participants, who are averaging $1,200.00 a year in savings on their prescription medications. Senate Minority Leader Mitch McConnell, R-Ky., on April 18, 2007 helped defeat one cloture vote which would have ended debate and allowed the Senate to vote on S 3. It is quite likely the Democrats will bring S 3 back at some point during the year, especially if they believe they can win a straight vote. Common sense should tell everyone to leave this alone. The voters are happy. The seniors are happy. The free market is working as it should, with honest competition and fair results. Let S 3 die quietly somewhere in a committee room. This program isn't broken. Paul M. Weyrich is chairman and CEO of the Free Congress Foundation.
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