Just a spoonful of socialism helps the medicine go down
Congresswoman Shelley Berkley, D-Nev., believes pharmaceutical manufacturers have a "right to make a profit" ... but the federal government should decide how big a profit.
The nation's 10 largest drug manufacturers made $20 billion last year. If the new price controls she favors start out by reducing that by a quarter, well, "I don't believe if they make a $15 billion profit next year they will not be able to do research and development," the congresswoman sneered, addressing a receptive gaggle of geezers at the Henderson (Nevada) Senior Center last week.
Of course the seniors would like to pay cheaper prices for drugs. Who wouldn't? In fact, some federal regulations probably do stand in the way of more drug-price competition, as does the fact that physicians -- and all too often, their patients -- tend to demand the latest patented brand-name nostrum to come down the pike, even when older, less expensive drugs with generic analogs might serve as well.
But Ms. Berkley was not promising to slash FDA red tape in order to make the introduction of new drugs less expensive. Oh no. Nor was she promising to lower taxes and reduce unfunded mandates which get passed along to consumers -- all things a congresswoman from a "less government" state might honorably undertake. Oh no.
What's needed are price controls, like those in Canada, the congresswoman revealed, demanding to know why the cholesterol medication Zocor costs 142 percent more here than it does in Canada -- why prescription drugs on (start ital)average(end ital) cost 92 percent more here than in Canada.
Does she really want to know?
This federal price control proposal was actually introduced by second-term congressman Tom Allen of Maine, who invited "60 Minutes" cameras along when he recently shepherded a bus full of Vermont geriatrics to Montreal so they could buy medicines at half the price they'd been paying at home.
"President Clinton played on this bit of stagey drama as only he can, biting his lip and demanding to know why Canada's drug companies can charge customers so much less than their American counterparts," reports Knight Ridder/Tribune health journalist Jim Lafferty.
"The answer, fortunately, was not long in coming."
In response to President Clinton's rhetorical question, the editors of the daily Calgary Herald noted Canada's federal government has indeed controlled drug prices since 1987, but pointed out that this slice of socialized medicine "comes with a cost."
For one thing, arbitrarily low prices discourage foreign companies from introducing new drugs in Canada, restricting Canadians' access to thousands of new medicines, the Herald observed. And Canadian firms can't fill the gap because their artificially capped prices (and thus, profits) prevent them from accruing the capital needed to research and develop their (start ital)own(end ital) new drugs.
In fact, the Canadian daily points out, Canada's prescription drug system only works because of "the free market practices in other nations. Most major Canadian drug companies are subsidiaries of U.S. and European drug giants. With streamlined drug approval processes and an absence of price controls, the U.S. provides companies with a faster return on investment. Canadian subsidiaries get a free ride on the successes of their parent companies while still offering lower drug prices in compliance with regulation."
Kind of like the way Soviet commissars used to figure out how to set prices on consumer goods under communism -- by checking the ads in the Paris and London newspapers.
"If pharmaceutical companies are prevented from recovering costs and building revenue, they won't undertake new research," The Herald continued. "If the benefits of producing today's drugs are too small, the result will be that tomorrow's drugs won't be produced at all."
The paper's conclusion? President Clinton (and the rest of America's "can't get enough of big government" gang) "may think Canada's drug price controls look good, but the fact is that the system relies on the free enterprise of the U.S. Any attempts to upset that symbiotic relationship will come at his peril, and Canada's."
The proponents of the federal income tax, remember, said it would never go higher than 4 percent, and would be a levy "only against millionaires." All government proposals to regulate "unconscionable profits" start out promising "moderate, reasonable" restrictions on profit-taking -- and all end up with some government bureaucrat demanding "We leave you enough to live: What more do you need?"
Congresswoman Shelley Berkley and the Washington Democrats: stifling innovation and free enterprise in so many ways.
Vin Suprynowicz is assistant editorial page editor of the Las Vegas Review-Journal. His new book, "Send in the Waco Killers: Essays on the Freedom Movement, 1993-1998," is available at $24.95 postpaid from Mountain Media, P.O. Box 271122, Las Vegas, Nev. 89127; by dialing 1-800-244-2224; or via web site http://www.thespiritof76.com/wacokillers.html.
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Vin Suprynowicz, vin@lvrj.com
"The evils of tyranny are rarely seen but by him who resists it." -- John Hay, 1872
"The whole aim of practical politics is to keep the populace alarmed -- and thus clamorous to be led to safety -- by menacing it with an endless series of hobgoblins, all of them imaginary." -- H.L. Mencken
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