March 29, 2024
BANGOR DAILY NEWS (BANGOR, MAINE

The high cost of America’s health-care system has been documented repeatedly for more than a decade. It is often compared unfavorably with Canada’s national system, which is far less expensive and doesn’t exclude a significant portion of the population, as the U.S. system does.

But Americans, and eventually the rest of the world, get something for all the money paid into its private health system that no national system offers: research and development of the latest life-saving drugs. The United States, in fact, develops about half the world new drugs, with most of the rest coming from Great Britain, Switzerland and Germany, whose health systems are not nearly as “nationalized” as Canada’s.

The balance Congress must find as it takes up several health-care bills in its coming sessions is, how can it continue to encourage medical research especially in chronic diseases such as Alzheimer’s while reducing the cost of health care?

First up for the Senate is a bill by Sen. David Pryor, a Democrat from Arkansas, who wants to regulate prices for pharmaceutical companies. The bill, called the Prescription Drug Cost Containment Act, is sponsored by Sen. William Cohen and is appealing to many consumer groups because prescription-drug costs have risen 30 percent in the last couple of years.

Sen. Pryor, recognizing the recent higher-than-average profits of pharmaceutical companies, would reduce tax credits to companies whose drug price exceed the annual rate of inflation. It would also create a price-review commission and require the secretary of health and human services to look at the total subsidies that drug companies receive. The drug companies say, in effect, control our prices through cutting credits and the expensive but necessary research (it costs $230 million and 12 years to get a new drug passed by the Food and Drug Administration) will come to a halt.

Subsidizing companies that are turning large profits doesn’t make a lot of sense and the money currently spent on tax credits could be used, for instance, to support prescription drug costs that Medicaid doesn’t cover. But rather than simply regulating prices, Congress should send the Pryor back to committee and include ways in it that would push the drug business more competitive.

Currently, consumers don’t choose which drug company to buy from; they take their doctors’ prescription to the local pharmacy and pay for what they’re given. A more competitive industry would keep prices lower by giving consumers a choice of brands. The generic-drug industry was supposed to do this in the last decade but never really gained the trust of consumers. Brand name drug manufacturers shouldn’t have this problem.

Pharmaceutical concerns, for their part, want government intervention when it comes to subsidies but try to keep it at a distance when those subsidies come with added regulation. They can’t have it both ways. Drug companies need to prove, by keeping prices down, that they recognize how drug costs affect consumers and that they are willing to compete.


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