- The Washington Times - Thursday, June 1, 2000

While it's certainly true that the grass often looks greener on the other side of the fence, anyone who has gotten a closer view can tell you where the crabgrass grows. That couldn't be any more true than in the debate over prescription drug prices.

Those who are making political hay by holding up Canada's system of health care on the basis of cheaper drug prices are playing a false and dangerous game of bait and switch. The truth is Canada's drug prices are linked to a system of health care that no American would settle for. Don't trust anyone who pretends to sell you one without the other.

Just as Democrats say Americans should flock to Canada for drugs, Canadians already flock to the United States for treatment. The Canadian government uses a "big government" approach that rations health care and discourages new medical technology. As a result, Canadians wait three times longer for cancer treatments and nearly 12 weeks to see a specialist. Canada also strongly controls the prices of innovative medicines, which has discouraged investment in research to develop new medicines.

Worse yet, the Canadian government will not pay for many of the latest breakthrough medications. For example, a number of top-selling drugs that are widely used by seniors in the United States drugs that treat ailments such as arthritis, osteoporosis and allergic rhinitis are not reimbursed by some of Canada's biggest provincial health plans that provide prescription drug coverage to the poor, elderly and disabled.

Additionally, Canadians face longer waits in gaining access to new medicines produced by Canadian drug makers. The Canadian government typically takes about a year and a half to approve a new drug for sale that is at least six months longer than it takes here at home. And, then each provincial government in Canada takes additional time in deciding whether the new medicine will be placed on its list of reimbursable drugs.

Even after approval, it can take almost two years for officials in Canada to place a medicine on the provincial reimbursement list. In British Columbia, it took another one and a half years to place an ulcer medication on the list. In British Columbia it took more than two additional years to schedule an anemia medicine for reimbursement. Typically, elderly patients with serious health problems don't have that kind of time to spare.

A recent report from the highly regarded Fraser Institute in Vancouver found that 76 percent of Canadians believe that their health care system is "in crisis." Seventy-one percent said that changes are needed because health care needs are not being met. The study also found that Canadian patients are often forced to use the medicines selected by the government solely for cost reasons. Patients who would respond better to the second, third or fourth drug developed for a specific condition are often denied the preferred drug and are stuck with the government-approved "one size fits all" drug.

Perhaps most significant, however, is the fact that Canada's system of establishing artificially low drug prices has resulted in Canadian drug makers investing less in their own research and development of promising new medicines. And foreign companies are often reluctant to introduce new drugs in Canada because of price controls. This means that Canadians' access to life-saving new drugs is limited.

Yet this Canadian-style health care with prescription drug benefits is what some in Washington are proposing for America.

Just recently, we proposed a plan that modernizes Medicare and adopts a prescription drug coverage benefit, providing more health care choices for seniors in rural and undeserved areas as well. Unlike a one-size-fits-all plan, the plan is a market-based solution that gives Medicare beneficiaries real bargaining power through private health plans to purchase drugs at discount rates, and guards against escalating out-of-pocket drug costs by setting a monetary ceiling beyond which Medicare would pay 100 percent of beneficiaries' drug costs. By contrast, the president's plan leaves beneficiaries vulnerable to pay full and unlimited drug costs above $2,000.

Our plan is 100 percent voluntary and preserves current coverage for seniors who want to keep what they have, while extending to other beneficiaries the choice of several competing prescription drug plans. By rejecting the big government, Washington-mandated approach, our plan would not only provide a needed prescription drug benefit, but ensure continued innovation and the development of life-saving drug therapies by American pharmaceutical companies.

Today, America's pharmaceutical industry, which is being criticized in the current debate, spends about $24 billion on the research and development of more than 1,000 new medicines that could combat a wide range of diseases. But this effort comes with a cost it takes 12 to 15 years and an average of $500 million to bring each new drug from the laboratory to the market.

For every dollar that American pharmaceutical companies earn in drug sales, 20 cents is reinvested in developing newer, better drugs. In many instances, American companies invest the money and research time in discovering new medicines that Canada and other countries then turn around and reproduce at a cost of a few pennies per pill. The reality is that the Canadian system works because of the free market practices of the United States and other nations.

Since 1980, research spending by American pharmaceutical companies has increased by double digits every year except for 1994 and 1995, when President Clinton proposed prescription drug price controls as part of his failed health care reform package. It's clear that even the threat of price controls can harm research efforts.

America sets the global standard for creating new medicines. Let's keep it that way, so that all Americans and the rest of the world can continue to reap the healthful benefits of our homegrown ingenuity.

Rep. J.C. Watts is chairman of the House Republican Committee.

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