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Jewish World Review July 18, 2000 /14 Tamuz, 5760

Morton Kondracke

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Consumer Reports

Bush Must Fight Gore's Drug Plan As 'Bad Medicine' -- VICE PRESIDENT Al Gore's attacks on drug companies may be good politics, but they are bad medicine. It's up to Texas Gov. George W. Bush (R) to say so, but so far he hasn't.

Even though medicines produced by pharmaceutical companies are heavily responsible for improved U.S. health and life expectancy, the industry's own polls indicate that the companies aren't popular.

On a favorability scale of zero to 10, a survey conducted in February for the Pharmaceutical Research and Manufacturing Association found that the public rated drug companies at 5.2, only slightly ahead of health insurance companies, at 4.1, and managed care providers, 3.6.

Gore is taking advantage of this reality, pummeling drug companies with populist rhetoric to promote his Medicare prescription drug benefit. He's been hitting HMOs and insurance companies, too.

Gore accuses drug companies of "price-gouging" and says he will make drugs cheaper for senior citizens. He charges that drug companies oppose him -- and donate to Republicans -- in order to keep their products overpriced and their profits high.

What Gore doesn't say -- and Bush should -- is that the Democrat's plan would put the federal government in charge of drug pricing and coverage decisions, almost certainly inhibiting lifesaving medical research and innovation.

There are no direct price controls in the Medicare plan favored by Gore, the Clinton administration and most Congressional Democrats. Theoretically, a private company in each region would negotiate price reductions with drug companies on behalf of seniors.

But that's the theory behind Medicare, too. The reality is that the federal Health Care Financing Administration -- the agency that oversees Medicare -- now rigidly decides how much the government will pay for medical procedures and hospital services. The same thing surely would happen with drugs.

HCFA's over-regulation and underpayment is the reason HMOs give for dropping out of Medicare, forcing 1.4 million seniors to find new coverage.

HCFA's administration of Congressional cost-cutting directives in the Balanced Budget Act of 1997 also has driven many hospitals and nursing homes into bankruptcy, necessitating corrective action by Congress.

In hearings before the House Commerce Committee, witnesses charged that HCFA takes up to four years to approve coverage and reimbursement levels for new medical technologies after they've been cleared by the Food and Drug Administration.

When Medicare claims are denied, they testified, it takes an average of 783 days to process an appeal. HCFA red tape has led many doctors to refuse to treat Medicare patients. HCFA covers up to six months of hospice care for dying patients, but may cut them off if they live longer.

This record suggests that the pharmaceutical industry is right to fear that HCFA inevitably will set prices so low that the industry will not be able to afford to do the research it takes to develop new drugs. These cost on average $500 million to bring to market. Only one in five drugs that undergo human testing actually reach the market.

Those that do make it have produced astounding results, raising life expectancy from 70 to 76 over the past 35 years and saving hundreds of billions in hospital stays, surgical bills and lost productivity.

Tuberculosis, polio and the flu have ceased to be killer diseases thanks to U.S. drug development. Rheumatic fever, stomach ulcers and hypertension are less deadly. And hope for curing cancer, AIDS and Alzheimer's disease lies with pharmaceutical investment. So does exploitation of human genome discoveries.

Drug company profit margins may indeed be "too high" and drug prices for the one-third of all seniors lacking insurance coverage surely are. But how this problem is corrected is a crucial matter for the health of the world -- literally.

U.S. companies produce about half of the major new medicines developed in the world. No disease cures are being discovered in Canada or Mexico, countries that Democrats lionize for their government-controlled low drug prices.

There is reason to doubt that a House-passed Republican alternative to Gore's plan will work. Instead of providing benefits to seniors, it would subsidize insurance companies that offer drug benefits. The insurance industry says companies won't participate.

But a third alternative exists, proposed by Sens. John Breaux (D-La.) and Bill Frist (R-Tenn.), which offers a benefit directly to seniors and opens the way for various companies to compete for their business and negotiate with drug firms on prices, all with more government oversight than the GOP plan.

Breaux-Frist is the alternative favored by Bush. But, do you know about it? Bush is responding to Gore's attacks on the drug industry by accusing Gore of reinventing himself as a populist.

What Bush needs to do is wage an aggressive campaign on behalf of the nation's health, pointing out the dangers in Gore's plan and the benefits of his own. Unpopular as they are, drug companies can't fight the government on their own.

JWR contributor Morton Kondracke is executive editor of Roll Call, the newspaper of Capitol Hill. Send your comments to him by clicking here.


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12/21/99: Bush improves, everyone panders
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10/05/99: Gore moves: Desperate but necessary
10/01/99: Fox, Armstrong make case for NIH
09/28/99: Dems' race brightens Bush's chances
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09/07/99:Airport rage increases, with good reason
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08/02/99: One campaign reform should pass: disclosure
07/27/99: Gore leads Bush in policy proposals

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