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Big Clout, Cheaper Drugs

July 31, 2001

In today's brutally uneven market for prescription drugs, the best prices have been scored not by individual consumers or companies but by nations like Canada and Australia. They buy drugs in bulk, mustering their purchasing clout to win big bargains, then helping their poorest citizens pay for what they need.

That's good reason to welcome two new multi-state initiatives to create drug-buying pools and wring price concessions from pharmaceutical companies. The Northeast Legislative Initiative was approved by eight Northeastern states at a Boston conference last week; five mostly Southern states are set to approve their own plan at a meeting in Atlanta next week.

The success of both plans is uncertain because they are modeled on purchasing pools in Vermont and Maine that are under court challenge. Swift action in Congress to give states explicit authority to form such pools would remove the cloud of doubt. Sens. Olympia J. Snowe (R-Maine) and James M. Jeffords (I-Vt.) are now crafting a bill to do just that.

Drug industry lobbyists argue that the bill could bleed away profits the industry needs to fund "risky" and innovative research and development to discover new drugs. However, a report released last week by the consumer health group Public Citizen concludes that the drug industry actually spends only about one-fifth of what it says it does and that the chief research spender is the U.S. government.

The prospects for costly Medicare prescription drug coverage are vanishing. A White House initiative to promote the drug companies' own "discount cards" leaves consumers at the mercy of the manufacturers. So President Bush should work with, not against, Snowe and Jeffords to ensure that this economical, free-market drug entitlement becomes law.

During last year's presidential campaign, Bush promised that "reforming regulatory barriers" to help states spend more efficiently on health care would be his first health reform goal. Bush can do exactly this by supporting the Snowe/Jeffords plan.

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