Ensuring Fairness in Prescription Drug Prices

The Nov. 2 editorial "An Election on Drugs" overlooked one salient fact. Most of the money spent on developing new drugs comes from public funds via the National Institutes of Health and universities. In fact, according to an analysis by health services professor Alan Sager, the big drug companies spent only 11 percent of their budget on research and development in 1999. This compares with 16 percent profit.

More important, they spent 31 percent on marketing and administration. This marketing is principally aimed at getting us to use expensive drugs in situations where cheaper drugs would suffice. It includes not only the odious ads bombarding us on television and radio and in magazines and newspapers but also the thousands of ill-educated drug "pushers" who flood doctors' offices with misinformation.

It also includes payments to physicians both direct (incentives to prescribe very expensive drugs) and indirect (meals and vacations at resorts under the guise of conferences and education).

All of this is not only unnecessary but actually harmful. Drug prices could be reduced by one-third without affecting research in the slightest.

LEONARD S. CHARLAP

Princeton, N.J.

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With profit margins at pharmaceutical companies soaring, why is The Post more concerned with preserving incentives for those companies than providing drug cost savings for seniors on fixed incomes?

A Medicare-operated Part D plan with drug prices directly negotiated with pharmaceutical companies will deliver billions of dollars in savings.

Research by respected economist Dean Baker shows that the federal government and Medicare beneficiaries would save $600 billion from 2006 to 2013 if Medicare were allowed to directly offer a Part D benefit and to negotiate prices with drug manufacturers. Such significant savings could be used to close Part D's "doughnut hole" and to lower cost-sharing for Medicare beneficiaries.

Supporters of the 2003 Medicare Modernization Act often point to a price tag for Part D than has been lower than predicted as evidence that privatization has "worked." What they don't say is that seniors will bear an increasing share of the costs through higher out-of-pocket expenses each year.

Part D should not be run as an experiment in "smart purchasing" that subjects seniors to a privatized system of confusing choices and increased costs.

Medicare beneficiaries should be given the choice to get their prescription drug benefits from the traditional Medicare program that they know and trust.

BARBARA B. KENNELLY

President and Chief Executive

National Committee to Preserve

Social Security and Medicare

Washington