Unsound medicine on drug pricing

Supporters of what amounts to a government price-fixing proposal claim it will save the average Medicare prescription drug beneficiary about $500 a year.

Perhaps the measure, pushed by House Democrats, will save seniors money. But at what cost to future generations as pharmaceutical research dollars dry up? That's the question the Senate needs to answer before going along with this proposal.

Americans are rightly concerned about prescription drug costs, especially prices for new medicines. The drug industry has brought some of this wrath on itself by negotiating lower drug prices with foreign governments than Americans can obtain and lavish spending on advertising, marketing and lobbying efforts.

But the proposal to allow the federal government to negotiate prices for 23 million seniors enrolled in the Medicare prescription drug program is like treating the flue with chemotherapy.

Competition among various plans covering Medicare enrollees already is keeping drug prices down. More than half of the $13 billion in projected Medicare drug benefit savings has been attributed to competition.

At risk is loss of an estimated $200 billion from research budgets over the next two decades in an industry where it costs $1.2 billion to bring a new drug to market.

There are better approaches to helping seniors struggling with high drug costs. Eliminating government rules that dissuade drug companies from offering free or reduced-price prescriptions to certain Medicare beneficiaries would do for starters. So might giving pharmaceutical companies ongoing royalties from generic drug makers on medications whose patents have run out. It could lead to a slight markup in generic drug prices, but reduce costs for breakthrough drugs.

Price-fixing isn't the answer.

The Indianapolis Star