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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