DRUG COVERAGE: U.S. Gov. Should Control Costs, Experts Say
Testifying before the House Prescription Drug Task Force yesterday, Alan Sager, a Boston University School of Public Health professor, presented a proposal advocating the reduction of drug prices to a level comparable to other developed nations, the Boston Globe reports. In a study comparing U.S. drug prices with those in developed countries like Canada and Australia, Sager and colleague Deborah Socolar found that wholesale drug costs are 25% to 68% higher in the U.S. Sager noted that prescription drug expenditures will reach nearly $120 billion in the U.S. this year, second only to physician services in the nation's health care budget. He contends that the ability of the U.S. government to negotiate drug costs with pharmaceutical manufacturers down to the level paid in Canada would save U.S. residents nearly 13.5% -- about $16.2 billion -- providing enough savings for all residents to receive the necessary medications. Nearly 70 million U.S. residents have no drug coverage. Currently, Medicaid and some state public health departments already negotiate for lower drug prices, while the Massachusetts and Vermont legislatures are trying to establish similar policies. In Congress, two bills have been proposed; one calling for "international parity" on drug costs and another permitting pharmacies to purchase drugs at a nominal fee for Medicare patients. Sager states that his report "does not propose or support specific legislation." He said, "We're trying to identify some principles that good legislation should follow. There is a lot of good in many of the bills." Pharmaceutical manufacturers believe that any price control would seriously impede drug development. Jackie Cottrell, a spokesperson for the Pharmaceutical Research and Manufacturers of America, said that "any effort at a government mandate or price control will hurt research and, ultimately, patients." She added, "There are ways to expand drug coverage without harming the industry and innovation," referring to a recent study from Brandeis University that concluded price controls would "stymie" drug development (Kong, 7/28).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.