Friday, Oct. 8, 2004 | 3:57 a.m.
WEEKEND EDITION: October 10, 2004
It's not surprising to see the trend now among states and cities to buck the federal government's prescription drug plan and go out on their own -- to Canada.
It's not surprising because the Bush administration's so-called prescription drug benefit under Medicare has a built-in guarantee for drug companies to reap enormous profits at the expense of state and local governments in addition to individual consumers. The governments must fund their employees' drug plans, subsidize drug plans for senior citizens, and provide discounted or free drugs to the mentally ill, patients at public hospitals and prison populations. Hundreds of millions of dollars are at stake -- all the incentive that states and municipalities need for defying Washington and doing business with Canada, where the retail price of prescription drugs is much lower than the wholesale price here in our country.
The Bush administration's drug bill barred the federal government from amassing buying power through bulk purchases. It prohibited Medicare recipients, numbering more than 40 million, from being considered as a single bloc of beneficiaries. If the federal government was buying in such bulk, and representing so many consumers, the drug companies would be forced to the negotiating table, where they would have to agree to lower prices for everyone. Instead, in a huge sop to the drug companies, the Bush bill required that private insurers, with thousands of customers instead of millions, negotiate prices with the drug companies. This mandatory lack of buying power is what's keeping prices here so high.
Now Democratic state lawmakers in Nevada want to follow the lead of several other states and cities and buy drugs from Canada, a tactic the federal bill also prohibits. While understandable, this plan concerns us, and not because of the smoke screen coming from the drug companies. To protect their federally guaranteed profit margin, they say drugs purchased from outside the United States cannot be trusted to be safe. If there really is a safety issue, then the drug companies are indicting themselves because they're the ones manufacturing the drugs sold in Canada. What we're concerned about is a federal prescription drug policy so weighted toward special interests that states are almost forced to defy it. We're also concerned about tensions between Canadian and U.S. citizens, as drug companies will counter the states' purchasing policies by cutting supplies to our neighbor to the north.
What's truly needed is a federal prescription drug plan fairly weighted between the legitimate economic interests of drug manufacturers and the urgent needs of consumers for reasonable prices.
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