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Drug Prices

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While the Democrats were touting the potential future benefits from stem cell research, a future I like (see previous post) there was a less encouraging moment during the convention for those of us who are optimistic about the future of our physical health. It came during Kerry’s acceptance speech. It was a single line that I have not seen discussed.

Under our plan, Medicare will negotiate lower drug prices for seniors.

Yikes! I like low prices for seniors, too. Good idea. But if the government negotiates lower prices for seniors, you’re on the road to price controls while pretending you’re on the road to freedom. Budget pressures will force prices down, cut into pharmaceutical profits and reduce the incentives for future innovations. And by starting with lower prcies for seniors we’ll encourage drug companies to keep working on drugs that eliminate crow’s feet rather than Alzheimers. If we want the elderly to get lower prices, let’s subsidize them. Let’s give the elderly money. Let’s speed up the regulatory approval process. But to make drug companies pay for cheaper drugs in the form of lower profits is a hidden way to get cheap drugs. The costs will be paid by our children and grandchildren who will miss out on innovations that will no longer be profitable. My longer take on the price of drugs is here [2].

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