WS>>Misguided drug plan

carl william spitzer iv cwsiv_2nd at JUNO.COM
Tue Nov 25 18:35:33 MST 2003

          by Donald Lambro

          West  Virginia  Gov. Bob Wise  wants  a  Canadian-style
     system to control pharmaceutical prices.

           But  if  he gets his way, West  Virginians  will  have
     fewer drug choices and longer, more costly illnesses.

           Faced  with a state budget crisis, deepened by  rising
     Medicaid costs, Mr. Wise blames higher drug prices for  West
     Virginia's  fiscal woes and wants drug-makers to charge  the
     same  prices  set  by the Canadian government,  not  by  the

           But  Canada's  rigid price-control  system  isn't  the
     answer.  Because of its price-fixing, many of the newer  and
     more effective pharmaceuticals for illnesses like cancer and
     hypertension are unavailable there.

           The  price  of many medicines here is high,  but  they
     treat  or prevent illnesses that would cost people  hundreds
     of thousands of dollars more than the medicines  themselves.
     Price controls that impose disincentives to develop new drug
     treatments,  or prevent the best drugs from getting  to  ill
     patients, would make health care worse, not better.

           A  study  by economist Frank Lichtenberg  at  Columbia
     University  shows that every dollar spent on  newer  genera-
     tions  of  drugs saved four times that  amount  in  hospital

           Citizens for a Sound Economy (CSE), a Washington-based
     free market group that is lobbying against Gov. Wise's plan,
     explains  that  "because prescription drugs are  more  often
     used for preventive care, they stave off more  debilitating,
     more  costly  medical  conditions  requiring  expensive  and
     lengthy  hospitalization. While a $600  annual  prescription
     for  two leading cholesterol-reducing drugs may seem  expen-
     sive,  it is the long-term effect of those drugs that  helps
     avert  an  emergency bypass operation and  lengthy  hospital
     stay at an average cost of $300,000."

           CSE  has launched a public awareness campaign in  West
     Virginia  to  counter Mr. Wise's misguided proposals  for  a
     Canadian system. In addition to a series of radio ads criti-
     cal of the governor's plan, it is sending "Canadian  Health-
     Care First-Aid Kits" to state legislators.

           Included  is  a five-year calendar "so  West  Virginia
     citizens  can  schedule their emergency surgery  at  a  pace
     consistent  with the delays Canadian citizens must  endure."
     "Wise's  proposed  solution  to West  Virginia's  crisis  is
     nothing more than a hidden tax on drug-makers one that will
     force  citizens  to  ultimately pay the  price  through  the
     drastic  reduction of services and lack of  availability  of
     life-saving drugs," said CSE President Paul Beckner.

           In  many cases, West Virginians will be forced to  use
     cheaper  generic  drugs that are often not as  effective  as
     original drugs or the newer drugs that replace them.

           But there is more in Mr. Wise's initiative than  meets
     the eye. The governor has had a long affiliation with  Busi-
     ness for Affordable Medicine, a fat-cat lobbying group whose
     members "will reap billions of dollars in windfalls if  more
     patients  are forced to switch to generic drugs,"  according
     to the CSE.

           Mr.  Wise's  crusade to adopt  Canada's  price-control
     system  ignores  some important facts, according  to  a  CSE
     study. Among them:

           *  Some,  though not all, drug prices are  cheaper  in
     Canada,  subsidized  by taxpayers who on average  send  more
     than 35 percent of their income to finance the  government's
     welfare state programs.

           "But  when  a government buys drugs,  it  must  ration
     them. With no private sector alternatives, patients have  no
     choice  but to accept what their government not their  doc-
     tor decides is best," says a CSE spokesperson.

           * If Americans were required to buy the same pills  in
     Canada  that  they bought here, they would end up  paying  3
     percent more, according to a study by University of Pennsyl-
     vania professor Patricia Danzon.

           The  reason,  according to the CSE, is  that  "generic
     drugs, which account for half of U.S. consumption, are  less
     expensive under the competitive U.S. system than the  price-
     controlled Canadian system."

           *  The  Canadian plan that Wise wants to  copy  has  a
     notoriously poor health care record. Writing in the Canadian
     Medical Association Journal, Dr. Richard Davies, a cardiolo-
     gist at the University of Ottawa, found that more than 1,500
     people  were on lengthy waiting lists for heart bypass  sur-
     gery. Some die before surgery can be scheduled.

           * As for Canada's drug program, a recent survey  found
     that nearly 30 percent of British Columbia doctors  reported
     that  patients ended up in the hospital because  of  govern-
     ment-mandated substitutions of prescribed drugs.

           Congress will no doubt be debating a prescription drug
     plan this year. And there will undoubtedly be lawmakers here
     who, like Wise, want to use Canada's system. That would be a
     monumental, and in some cases deadly, mistake.

           A market-oriented plan can be devised to help poor and
     low-income people get the medications they need. This  could
     be  part of a competitive prescription drug  benefit  system
     that lets consumers shop around for the health-care coverage
     that suits their needs and their pocketbook.

           Such  a  plan should be part of a larger  reform  that
     gives taxpayers a tax credit to offset their medical expens-
     es, including drugs.

           The best way to keep down drug prices is to  encourage
     competition in the pharmaceutical industry and wider choices
     among public and private benefit plans. The worst way  would
     be a Canadian-style, state-preferred drug list that  prohib-
     its doctors from prescribing the most effective drugs on the
     market for their patients.

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