Clinton Nixes the GOP's Rx on Prescription Drugs

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Health and Human Services Secretary Donna Shalala

Cheaper prescription drugs — everybody in Washington wanted them last year, and the Republicans had a plan. Pharmacists and drug wholesalers would be allowed to buy American brand-name medicines that had been exported to Canada and other countries where drug prices are controlled. The reimported drugs then could be sold more cheaply to American consumers.

"I urge you to send me the Senate legislation," Bill Clinton wrote Republican congressional leaders in September. By October, the Senate bill had met the House bill, and Clinton called it "little more than a false promise." But he signed it anyway, and Republicans — and some Democrats — made the plan a cornerstone of their re-election campaigns.

Another election casualty

On Tuesday, Clinton sent Donna Shalala out to kill it. "Flaws and loopholes contained in the reimportation provision make it impossible for me to demonstrate that it is safe and cost effective," Shalala wrote. The program will not begin under the Clinton administration.

In the fall, Clinton hadn't wanted to risk losing the prescription-drug issue to Republicans by blocking the bipartisan plan. But the election is over — by week's end Wisconsin governor Tommy Thompson will be George W. Bush's new secretary of health and human services, and Clinton just left him a message: bipartisan doesn't always mean better.

Shalala, bearing the White House's bad news in order to take a bit of the political sting out of the decision, sternly counted the ways in which drug companies could render the bill toothless. They could deny importers access to government-approved labels, rendering the drugs unsaleable in the U.S.; they could make deals with importers to keep their drugs at higher prices. And with only a five-year term for the plan, wholesalers and drug companies alike might just drag their feet until the clock ran out.

And why wouldn't they do any and all of those things? What Shalala called "flaws and loopholes" sound like precisely the reasons why Republicans and drug companies found the bill tolerable.

A prescription that hurts everybody?

The thrust of the plan is rather odious from a free-marketeers' perspective. Canada employs socialized medicine to provide U.S.-made medicines at lower prices. America's free-market system, which makes drug companies (gasp!) profitable, also motivates them to develop the blockbuster drugs that Americans are so sick of paying market prices for. The plan would try for the best of both worlds, using Canada's socialized medicine as an end-run around U.S. pricing — and screwing U.S. drug-companies out of their profit margins in the process.

No wonder there were loopholes — and no wonder House Republicans beat back a Democratic efforts to put price controls on the reimported drugs. These companies do have lobbyists, you know. The loopholes were what made the plan sellable.

The bill's in your court now

So Clinton is throwing it back. He could have vetoed it in October, but that would have made life difficult for Democrats running for Congress. He could have just left it alone, leaving the implementation to Thompson and Bush, and spent his last days pardoning the Whitewater gang.

Instead he's getting one last shot in at his old Republican nemeses in the House and putting the issue back in the hands of a Congress that's even more split than it was last year. Let Bush find a way to do what may be the impossible: get voters free-market-created prescription drugs at socialized-medicine prices.