The need for scrutiny is even more compelling on price controls for Medicare prescription drugs. Under the Medicare Part D benefit that took effect last year, private companies negotiate prices. Democrats want to allow the government to deal directly with drug companies. They argue that this would lead to lower prices for medicines, but the more likely outcome is fewer drug choices and price controls.
Democrats point to the Department of Veteran Affairs as a model, but we doubt seniors will like that story when they learn about it. The government already negotiates drug prices directly with the VA. But as Robert Goldberg wrote last month in the Weekly Standard, "Far from negotiating prices, the VA imposes them. Federal law requires companies to sell to the VA at 24% below wholesale price. If they won't, they are banned from selling medicines to Medicaid, Medicare and the public health service."
The VA has created a list of approved drugs for its patients. Companies that don't pay the VA price don't make the list, and a slew of drugs fall into that category. They include Azilect and Tysabri, two of the newest therapies for Parkinson's and multiple sclerosis, respectively. That's what happens when keeping prices down takes priority over getting the best available medicines to patients. Both drugs are available through Medicare Part D, by the way. Maybe Congress ought to debate this.