The Wall Street Journal joined the crowd pronouncing the Medicare drug plan a great success, going so far as to tell readers that the Democrats may not be able to bring down the cost of the plan, even if Congress allowed Medicare to negotiate prices. In fairness, the Congressional Budget Office (CBO) also says that Medicare could not get lower prices. This raises the obvious question -- why do we think that Medicare could not negotiate the same sort of prices that the Canadian government receives? After all, it would actually be a larger buyer. Does CBO think that Medicare is run by bumbling and/or corrupt fools? If that's the case, maybe we can just contract with the Canadian health officials to negotiate on Medicare's behalf, Or, maybe we can have the folks at the Veteran's Administration (VA) do the negotiating, since they also pay prices that are 40-50 percent lower than what the private insurers pay who are in Medicare Part D. There is little doubt that the government could establish a drug purchasing system that would get drugs for Medicare beneficiaries at the same price paid by people in Canada or the VA. The WSJ tells readers that the Democrats would be ill-advised to follow this route. Lower drug prices are a clear way to save money in a tight budget environment. If the WSJ considers lower drug prices a bad route, then it obviously believes that it is more politically viable to raise someone's taxes and/or cut other spending. It would be interesting to see the suggestions.
--Dean Baker
