Price controls on Medicare drugs

Re “Aid for Medicare patients sought,” April 11

Although the article states that “Democrats say the government could save money if it used its massive purchasing power to negotiate with pharmaceutical companies,” there is little evidence to support their claim.

First, it’s not clear that allowing the government to negotiate prices would yield any savings. According to a recent report from the nonpartisan Congressional Budget Office, “Government price negotiation would not yield lower drug prices compared to current law.”

Second, Democrats cite the Department of Veterans Affairs’ drug benefit as a good model for Medicare Part D. But under the VA model, drug companies must sell their products to the government at a price that is at least 24% less than the non-federal average manufacturer’s price. In other words, the VA institutes price controls.

Medicare covers well over 40 million seniors. If price controls are extended to such a large segment of the market, they inevitably would result in reduced consumer choices and stifled drug innovation.

PETER PITTS

Director, Center for Medicine

in the Public Interest

New York