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The Honolulu Advertiser

Posted on: Tuesday, November 25, 2003

EDITORIAL
Medicare reform needs more time

The largest Medicare overhaul since the program's creation in 1965 is bound to be a compromise. But that doesn't mean it need be rushed. After all, the keystone drug discount plan proposed in the Medicare bill won't kick in until 2006.

We applaud any effort to lower the price of prescription drugs. But we believe Medicare recipients deserve a bill that pays more attention to the concerns of elderly low-income Americans and less to special-interest groups and politicians with an eye on the 2004 elections.

Americans pay more for prescription drugs than citizens of any other nation, and those hit hardest are senior citizens living on fixed incomes. Meanwhile, the pharmaceutical industry makes huge campaign contributions to both Republicans and Democrats. So whom will the bill enrich?

Under the 1,100-page measure, Medicare would be greatly expanded to provide a prescription drug benefit for beneficiaries, providing 15 percent to 25 percent savings per prescription. It would also provide $12 billion in subsidies for private plans to compete with Medi-care. Presumably, the bill's authors hope the involvement of private insurance companies will bring down costs.

The bill also includes some great provisions, including $25 billion for rural hospitals and healthcare providers. And Medicare certainly is overdue for reform. But at what price?

The bill is expected to cost at least $400 billion over the next decade. Critics on both sides of the aisle say it's too expensive and will burden future taxpayers. They also argue that benefits are inadequate and serve only to enrich drug companies.

Perhaps the most telling feature of the bill is a section that prohibits the government from negotiating lower drug prices for Medicare recipients.

We understand that research and development costs are built into the price of prescription drugs. It's important to finance drug research. At the same time, though, the government has a responsibility to keep down the cost of Medicare.

Why can't Uncle Sam use his huge purchasing power to lower the cost of drugs to Medicare recipients? The U.S. pharmaceutical industry already faces stiff competition from Mexico and Canada.

Drug price controls restricted to Medicare won't break the industry but would keep costs down and help consumers.

As Democratic Rep. Tom Allen of Maine points out, a government intending to spend $400 billion on drugs over the next decade ought to be able to haggle for those drugs.

The ban on government purchases should be removed before the drug plan takes effect.