Should Congress negotiate drug prices?

Last year, leading Democrats promised if they gained control of Congress, they would move quickly to require the government to negotiate the prices on pharmaceuticals covered by the new Medicare drug benefit.

Last month, House Democrats made good on their campaign promises by passing Bill HR4 to do just that.?Their rationale is if government negotiators can force drug prices down, resultant savings could be used to make the benefit more generous.

At first blush, this all sounds like a good idea.? However, further examination and analysis suggest it may actually be a bad idea, or at least a premature one.

For starters, Democrats hail the policy of the Department of Veterans Affairs, which negotiates discounts for the drugs covered under the veteran?s health program. So far, so good, but as pointed out in a recent Washington Post article,

?The department can do this because it is free to deny coverage for drugs whose makers refuse to provide discounts: Fully 3,000 of the 4,300 medicines covered by Medicare are unavailable under the veterans? program.?

This saves money, but it is cold comfort for those veterans who need one or more of the 3,000 drugs not covered by the VA.? Recognizing this policy has reduced the quality of their health benefit, some 1.5 million veterans have opted to buy the more inclusive Medicare coverage.

So, citing the Department of Veterans Affairs drug discount policy as the exemplar of success in government negotiation worthy of widespread adoption seems a bit disingenuous to me.

By the way, the Democrats? faith in the government?s ability to successfully negotiate drug discounts across the board for Medicare is not shared by the Congressional Budget Office, which has estimated the savings from such efforts would be ?negligible.?

In stark contrast to their outright optimism for government negotiation of drug prices for the new Medicare drug benefit, Democrats appear to be downright pessimistic about the current system, whereby private insurers who administer Medicare drug benefits do the price negotiating as well.?Despite their pessimism, the current system seems to be working well by most accounts I?ve read.?In short, private insurers have profited enough from successful drug discounts that they have been able to reduce average monthly premiums since the program began about a year ago.? Reduced premiums are likely to attract even more customers.

Obviously, I?m no expert on this emotional and complicated healthcare issue.?Like Will Rogers, much of what I know about it comes from what I read in the newspapers.?Still, many of the articles and editorials I?ve read in recent days, including those in the Washington Post and USA Today, combine to suggest that the plan envisioned by House Bill HR4 is either premature, ill-advised, or both.?Similar views have been expressed by healthcare and business experts.

Fortunately, HR4 is still just a bill, not yet a law. It could face stiff opposition in the Senate.?Given what I know so far, such opposition would be richly deserved.

If you agree, let your representatives and senators know before it is too late.

Thomas B. Vaughn is an instructor at Motlow College and co-host of the radio show ?Viewpoints,? which airs on WCPI 91.3 FM.