Editorial: Drug companies win, again

Friday, April 20, 2007 | 7:22 a.m.

Senate Republicans have blocked a proposal that would have allowed the federal government to negotiate directly with pharmaceutical companies to obtain lower drug prices for Medicare recipients.

The legislation is one of the core programs in the Democrats' plan to overhaul the nation's health care system. After Wednesday's setback, Senate Majority Leader Harry Reid, D-Nev., told The New York Times that the Democrats were just trying to give Medicare the same advantage for negotiating drug prices enjoyed by health maintenance organizations and companies such as Wal-Mart, which sells drugs to consumers.

Medicare recipients buy their prescription drugs through private insurance plans that are subsidized by the federal government. A law passed by a Republican-controlled Congress in 2003 prohibits Medicare from establishing a list of covered drugs and prevents Medicare from negotiating for, or setting its own, drug prices.

The Bush administration and its Republican supporters do not support such negotiations, which is not surprising, considering that the ban has effectively created a massive taxpayer-supported windfall for large pharmaceutical companies - companies that, not so coincidentally, have contributed heavily when making political donations to Republican lawmakers.

Republican senators said the legislation was a choice between creating a government-run health care system or continuing with a health care system in which costs are controlled through private-sector management.

In reality, this was a choice between giving Medicare recipients - and the taxpayers who assume the program's costs - better choices and lower prices or continuing to allow pharmaceutical companies to rake in publicly funded profits.