Get Ready for a New Drug War — on Prices

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O Canada! Why are your prescription drug prices so low while ours remain so bloated? On Monday, President Clinton, contrasting domestic costs of medicines with those in Canada, ordered a federal study of prescription drug pricing. The study, slated to be completed in 90 days, is set to further ruffle the feathers of the already defensive drug industry and reignite the debate over possible Medicare drug price controls. In addition to his probe into drug costs, the President wants to make prescription coverage part of Medicare, and pharmaceutical companies, fearing for their profit margins, are resisting what they see as an inexorable push toward federal price controls. A consortium of pharmaceutical companies recently launched a bitter ad campaign attacking the President’s plan, calling it "big government in our medicine cabinets."

Of course, that's just what happens in Canada — and most of Europe — where drug prices and health care are subject to government control. And while Americans in general appear reluctant to go down the road to so-called socialized medicine, there is growing public anger at the sky-high cost of many medicines. The President is well aware of this simmering resentment, and if he’s able to pit the Republicans against a move to control drug costs, he could do his own party a great deal of good. At the same time, says TIME national economic correspondent Adam Zagorin, the President should recognize that this is a highly nuanced issue, with voters aware that pharmaceutical companies need to recoup a certain profit to cover past investments and to continue research into new drugs. "The key to this issue is balance," he says.

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