Democrats’ pre­scrip­tion for a po­lit­i­cal scam

The Washington Times Weekly - - Commentary - RICH LOWRY

Democrats hate that Repub­li­cans are will­ing, on the is­sue of em­bry­onic stem­cell re­search, to let their strait­ened moral views sup­pos­edly stand in the way of med­i­cal progress. But Democrats have their own eth­i­cal prob­lem with med­i­cal progress — based on their moral qualms about the profit mo­tive.

Dur­ing the 2006 cam­paign, Democrats ar­gued Pres­i­dent Bush’s pre­scrip­tion-drug pro­gram — Medi­care Part D — could never be cost-ef­fec­tive un­less the gov­ern­ment was al­lowed to ne­go­ti­ate di­rectly with drug com­pa­nies. Ac­cord­ing to the Democrats, the “D” in Medi­care “Part D” stood for “dystopia,” forc­ing dazed and con­fused se­niors to be ripped off by rav­en­ous drug com­pa­nies.

They never both­ered to no­tice that Medi­care Part D has been an un­ex­pected suc­cess. Per­haps not since John F. Kennedy’s cam­paign against a nonex­is­tent “mis­sile gap” in the 1960 pres­i­den­tial cam­paign has win­ning elec­tion-year rhetoric been so bo­gus.

The ab­sence of gov­ern­ment ne­go­ti­a­tions has been key to the pro­gram’s suc­cess. Private health plans ne­go­ti­ate drug prices with the drug com­pa­nies and then of­fer a menu — a for­mu­lary — of cov­ered drugs through Medi­care. Se­niors choose among the var­i­ous plans, pick­ing the one with the drugs they want at the best price.

Ac­cord­ing to the Cen­ters for Medi­care and Med­i­caid Ser­vices, the ro­bust com­pe­ti­tion has meant pre­mi­ums for the ba­sic drug ben­e­fit av­er­age $22 per month, 40 per­cent less than pro­jected. Se­niors are es­ti­mated to save, on av­er­age, $1,200 a year on drugs, and 80 per­cent of se­niors en­rolled in the pro­gram are sat­is­fied with it.

Ahh, but some­where, some­one might be mak­ing a profit. Demo­cratic Rep. Jan Schakowsky, Illi­nois Demo­crat, re­cently noted that drug com­pa­nies reaped $8 bil­lion in in­creased prof­its in the first six months of Medi­care Part D, so “it’s time to pro­tect the in­ter­ests of the Amer­i­can peo­ple.” Never mind that one fac­tor in the prof­its, ac­cord­ing even to an anal­y­sis by Demo­cratic lib­eral lion Rep. Henry Wax­man of Cal­i­for­nia is “higher sales vol­umes of drugs. Many se­niors who pre­vi­ously did not have drug cov­er­age now do.”

As it hap­pens, gov­ern­ment ne­go­ti­a­tions of prices won’t do any good un­less the gov­ern­ment is em­pow­ered not to of­fer cer­tain drugs, thus achiev­ing real bar­gain­ing power. This would re­quire cre­at­ing a na­tional for­mu­lary — in other words, lim­it­ing the drugs avail­able in the Medi­care pro­gram.

The U.S. De­part­ment of Vet­er­ans Af­fairs — touted by Democrats as an ideal ex­am­ple of gov­ern­ment ne­go­ti­a­tions — has just such a for­mu­lary. If the latest drug isn’t on the VA list — well, there are al­ways old drugs. Columbia Univer­sity Pro­fes­sor Frank Licht­en­berg re­ports that “only 38 per­cent of drugs ap­proved in the 1990s and 19 per­cent of the drugs ap­proved by the FDA since 2000 are on the VA Na­tional For­mu­lary.” Robert Gold­berg of the Cen­ter for Medicine in the Pub­lic In­ter­est points out that Azilect, the latest drug to treat Parkin­son’s dis­ease, is cov­ered by ev­ery private Medi­care Part D plan, but not by the VA.

Democrats don’t want to im­pose a for­mu­lary on Medi­care Part D be­cause they know it will cause a re- volt. So their ne­go­ti­a­tion scheme, passed by the House two weeks ago, has no chance of low­er­ing prices. At least Democrats will have struck a sym­bolic blow against prof­its.

They used to com­plain that drug com­pa­nies made too many “me-too drugs,” but the variety of drugs avail­able to treat the same con­di­tions has cre­ated healthy price com­pe­ti­tion. Now Democrats com­plain about one-of-a-kind break­through drugs, where there isn’t (yet) such com­pe­ti­tion.

But drug re­search is risky and hideously ex­pen­sive. No one will do it with­out the prof­its. One com­pany Mr. Wax­man ex­co­ri­ated for mak­ing prof­its in his anal­y­sis last Septem­ber was Pfizer. Too bad he didn’t wait un­til De­cem­ber, when Pfizer’s new choles­terol-low­er­ing drug proved a fail­ure, mean­ing it had lost 15 years and $1 bil­lion in re­search and de­vel­op­ment costs. Now Mr. Wax­man could at­tack the com­pany for plan­ning to lay off work­ers.

If they con­tinue cru­sad­ing against drug-in­dus­try prof­its, Democrats will only ob­struct med­i­cal progress, to the detri­ment of se­niors and all of us.

Rich Lowry is a na­tion­ally syn­di­cated colum­nist.

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