Healthy Skepticism Library item: 11327

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Publication type: news

Taylor L.
Democrats’ drug price plans 'will cost lives', says economist
Pharma Times 2007 Aug 23
http://www.pharmatimes.com/WorldNews/ViewArticle.aspx?id=11584

Full text:

A leading free-market economist has warned that, if the US federal government were to be given the drug price control powers being advocated by leading Democratic presidential candidates, “people will die.”

“If there is a 100% chance that Democrats will win the presidency and in two to three years there will be price controls on drugs, there will not be much sense in developing new drugs because the pharmaceutical companies will not be able to pay for it,” said John Lott, a researcher at the University of Maryland and author of Freedomnomics.

The Democrats’ proposals are based on misguided altruism, and the bottom line is that, if the government restricts a drugmaker’s profit potential, that company will have fewer incentives to produce life-saving medicines, Dr Lott has told a meeting organised by free-market think tank The Cato Institute in Washington DC.

Rarely, if ever, have the major Democratic candidates – New York Senator Hillary Clinton, Illinois Senator Barack Obama and former North Carolina Senator John Edwards – used the words “price controls,” yet they all support the purchase of prescription drugs from other nations which have such controls, and they call for Medicare to negotiate drug prices with manufacturers, said Dr Lott.

The candidates’ proposals
– Sen Obama says pharmaceutical companies are selling “the exact same” drugs in Europe and Canada but charging Americans more than double their prices. As President, he says he would: permit US citizens to buy cheaper medicines from other developed countries, if the drugs are safe; repeal the ban that prevents the government from negotiating with drug companies for the Medicare prescription drug benefit; work to increase the use of generic drugs in federal benefits programs; and prohibit drug companies from keeping generics out of markets.

“It’s time to bring together businesses, the medical community and members of both parties around a comprehensive solution to [the health care] crisis, and it’s time to let the drug and insurance industries know that while they’ll get a seat at the table, they don’t get to buy every chair,” says Sen Obama.

– Sen Clinton’s seven-point plan for health care reform would include allowing Medicare to negotiate drug prices and “lower those costs for everyone.” She says: “we know that Americans pay the highest prices in the world for prescription drugs that we have already, in most instances, funded the research on, funded the clinical trials on, done the Food and Drug Administration evaluation of, then we put it into the market place and we end up still paying the highest prices.”

She also calls for allowing the importation of drugs from “certain countries” to lower costs, removing barriers to generic competition and breaking the “monopoly” that biotechnology pharmaceutical companies have over their products which, she says, “can cost us so much money.”

Sen Clinton is also proposing the establishment of an independent public-private Best Practices Institute to finance comparative effectiveness research. A similar proposal which she spearheaded, to authorise the Agency for Healthcare Research and Quality to conduct such research has, she says, revealed that “a lot of these so-called ‘blockbuster drugs’ are no more effective, and sometimes less effective, in treating conditions than old standbys that have been around for a long time, and don’t have all the advertising of, you know, people running through fields of wildflowers that convince patients that they need the new drug, as opposed to the one that has worked well.”

– Former Sen Edwards also says he will promote evidence-based medicine, by establishing a non-profit or public organisation, “possibly within the Institute of Medicine,” to research the best methods of providing care.

Also, to “protect patients against dangerous medicine,” he will restrict direct-to-consumer advertising for new drugs “to ensure that consumers are not misled about the potential dangers of newly marketed drugs,” and strengthen the FDA’s ability to monitor new drugs after they reach the marketplace. Finally, he says he will ensure that researchers evaluating drugs are “truly independent.”