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<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Washington, D.C., March 23, 2004—Today the federal government issued its report on the financial state of the Medicare trust fund, and the news is grim. At the same time that the program’s liabilities are rapidly expanding, Congress, in the form of last year’s prescription drug benefit, is adding greater costs to the program. The program is now slated for bankruptcy earlier than ever, with no reform proposals on the horizon.
“The folly of last year’s rush into an expensive drug benefit has come home to roost,” said Competitive Enterprise Institute President Fred L. Smith, Jr. “Not only has the estimated cost of the program ballooned wildly in the months since it was passed, public interest groups across the country and the political spectrum have begun documenting its flaws. The only responsible policy for Congress now is to fix these flaws through a structural reform of the prescription plan—or better yet, to repeal it entirely.”
In addition to ever-increasing cost estimates, the drug benefit would encourage private employers to move retirees into the government program, which would end up providing inferior coverage and raising costs overall. In addition, it would provide no protection to U.S. drug companies from foreign re-importation, which erodes their ability to fund research and development and develop new drugs, nor would it do anything to help speed the approval process of new drugs and treatments.
“If Congress is really interested in making prescription drugs affordable, they should start by looking critically at the Food and Drug Administration’s unnecessarily slow and expensive approval process,” said Smith. “For years, polls have shown that physicians think the FDA is too slow to approve new drugs and medical devices. The price of that painfully slow process is paid both in price increases to consumers and in the lives lost while waiting for new treatments.”
The Competitive Enterprise Institute is a member of the Coalition Against Higher Medicare Drug Costs, a group of over 50 state and national public interest groups formed in 2003.