January 2, 2007

Re: Opposition to rationing of life-saving drugs through government-imposed drug price controls in Medicare

Dear Representative:

The National Right to Life Committee urges you to oppose efforts to repeal the Medicare provision that prevents the federal government from interfering in drug price negotiations between the private entities that provide prescription drug coverage for senior citizens and the drug suppliers. Government "negotiation" of drug prices amounts to imposing price controls, which compels rationing and gravely endangers development of life-saving drugs.

Since its inception, the National Right to Life Committee (NRLC) has been committed to protecting the right to life from conception until natural death, which means that we have fought just as strongly against infanticide and euthanasia as we have against abortion. In particular, we have strongly opposed involuntary denial of life-saving medical treatment through rationing.

In 1994 we opposed the Clinton Health Care Plan's proposed insurance premium price controls because they would have forced rationing. In 1995-2003, during the Congressional debate over Medicare restructuring, we successfully fought for the ability of older Americans to add their own money, if they choose, to government payments for health insurance premiums in order to obtain insurance plans that are less likely to ration care.

Now, NRLC is opposing legislative changes in Medicare that would effectively impose rationing of lifesaving drugs through drug price controls. Speaker-designate Nancy Pelosi has made clear that such a proposal will be voted on during the first 100 hours of the 110th Congress.

In 1997, at the urging of NRLC and other groups, Congress created an escape valve – one alternative to Medicare rationing that neither breaks the budget nor requires new taxes.

That alternative permits those eligible for Medicare voluntarily to supplement government payments for health insurance premiums with their own funds, if they wish, in order to obtain unrationed, unmanaged, private fee-for-service insurance. This is comparable to the way in which most retirees supplement government Social Security payments for living expenses with their own funds.

In 2003, Congress applied this alternative to the new prescription drug benefit, allowing older Americans the freedom, if they choose, to spend their own money to save their own lives.

Now, however, there are serious attempts that would derail this freedom by amending Medicare to authorize the government, under the guise of "negotiating" drug prices for Medicare recipients, to take away this choice by effectively fixing prices for drugs across Medicare. More efficacious drugs could be barred from a national formulary if their manufacturers would not meet the price "offered" by the government, excluding them from purchase even by the plans whose members were willing to add their own funds to get unrationed access to drugs.

Drug price controls would have a devastating effect on the development of new lifesaving drugs. Research and development is financed by investors who buy stock or provide venture capital. Investment in pharmaceutical development is risky. Many promising leads fail to work out and never make it to the market. Investors are willing to take this risk in the hope that a "breakthrough" drug that does succeed will have a high return on investment. If the government imposes price controls on the 40% of the prescription drug market that goes to Medicare beneficiaries, that incentive will be severely diminished.

Imagine the consequences for desperately needed new drugs to deal with Alzheimer's disease, cancer, and other debilitating and destructive conditions that disproportionately afflict older Americans. Even from a purely economic standpoint, drastically diminishing the development of new drugs for these conditions is counterproductive when one considers the enormous costs of caring for those with these diseases as the "baby boom" generation retires, unless there are pharmaceutical breakthroughs.

In order to protect the lives of senior citizens from government-imposed rationing, we respectfully urge you to oppose any measure that, by repealing the "non-interference" provision in Medicare, will open the door to drug price controls and deny older Americans who choose to do so the right to use their own money to save their own lives.

Sincerely,

Wanda Franz, Ph.D. , President

David N. O'Steen, Ph.D., Executive Director

Burke J. Balch, J.D., Director, Powell Center for Medical Ethics
National Right to Life Committee

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