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Jewish World Review Oct. 6, 2000/ 7 Tishrei, 5761

Marianne M. Jennings

Marianne M. Jennings
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Consumer Reports

The government as the pharmacy: Don't -- TOCQUEVILLE wrote that the American Republic would endure until lawmakers were able to bribe citizens with their own money. Both George W. and Al Gore are in full swing with prescription drug bribes for seniors. Once Al Gore could tie his dog, Shiloh, and his mother-in-law, into one gripping story, i.e., both have budget-crippling arthritis prescriptions; help was only a campaign away. Speaking with the moral authority of someone whose co-pay on prescriptions runs $300 per month, I beseech America: Don't take this bribe!

There are three reasons prescription drugs set us back a pretty penny. Reason one is that research and development for pharmaceuticals are huge sunk costs. For every 5,000 tries in the lab, one compound makes it to clinical trials. With the FDA controlling every step and PETA flailing about over animal testing, the process takes between 12 and 15 years. The average cost per drug, from start-to-finish, is $500 million.

At the tail end of the process is a crowd of attorneys, armed with class action suits, waiting for one good reaction from the drug in the general population. A little litigation and it's goodbye profits and sunk costs and hello, Chapter 11 bankruptcy. New drugs recoup these costs in addition to their R & D.

Reason two is international cross-subsidization. Clozapine, for example, costs $51.34 in Spain, $89.55 in Germany, $271.08 in Canada, and $317.03 in the U.S. The other countries listed here have price controls. If drug companies withheld the drugs, there the hue and cry would be justifiably vicious. So, we pay more for the rest of the world's access. We offer not just the finest pharmaceuticals; we sell on credit and pay the loan ourselves. The nations with price controls and socialized medicine have, like all good comrades, demanded egalitarianism and handed others the tab. When Kyoto treaty equity discussions abound, this bonanza should be fodder for our smokestackless friends.

Reason three is that HMOs, federal agencies and other networks of businesses band together for group discounts on drugs. Those paying hefty chunks of their budgets for prescriptions are not in these pools and retail prices are killers.

The Feds can't afford coverage for all seniors, who buy one-third of all prescriptions sold here ($250 billion). How will the Feds decide whom to cover? What of the two-thirds of Medicare recipients who already have prescription drug coverage? A full-blown government program will discourage such self-reliance. When seniors flock for freebies, the Feds will draw lines in their usual fashion: with a plethora of regulations enforced by folks who have the flexibility of plywood. You place your prescriptions in the hands of the same folks who mandated Braille on drive-through tellers under the Americans with Disability Act.

When screening applicants proves insufficient for narrowing the eligibles, more regulations will limit drugs. Enter more government employees for these decisions. If you think your HMO is arbitrary and capricious, wait until 100 million yuppies, afflicted with retirement age and arthritis, are vying for the same pool of prescription money. Baby boomers in their Lincoln Navigators and Cole-Haan loafers will bring road rage to the parking lots of social security offices as every man, woman, and beast clamors for free prescription drugs. Hell hath no fury like a freeloader yuppie with lumbago.

When the regs and floodgates don't work, enter price controls. Exit innovation

What is it about this era that finds even Republicans touting government solutions? This state intervention is irritating in its presumption that families are not responsible for each other, including medical expenses. The government is now the first, last and only resort for unexpected costs. Self-reliance and family support are dismissed for second homes and dinners out (about $2,200 per year spent by folks 65 and older).

Even without family support, there are non-government solutions. Band together those with prescription burdens to get them the same discounts the health plans and federal workers enjoy. Or, encourage them to take advantage of the generosity of the drug companies that gave away 2.8 million prescriptions, or $500 million, to the financially strapped last year. Interestingly, the drug companies don't look at assets, as the Feds do, in determining eligibility. They look only at income after medical expenses.

In other words, these price-gouging companies have compassion and understanding - No bureaucRAT ever had such simplicity. Find the free drug programs at Still another solution is vouchers for supplemental prescription coverage. Vouchers don't fiddle with the market but do give purchasing power.

Bribery sounds terrific when you're facing $300 a month for prescriptions on income of $1,000. But, bribery benefits the few at the expense of many. Bribes, even in the form of free prescriptions, are a temporary fix, a rush of cash as a facile solution. Bribes for bids from a contractor or government funds pledged for votes by a shameless politician are the same. They corrupt the system. You could end up on Shiloh's drugs.

JWR contributor Marianne M. Jennings is a professor of legal and ethical studies at Arizona State University. Send your comments by clicking here.


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© 2000, Marianne M. Jennings