By Mariann Caprino
NEW YORK _ One of the drug industry's favorite arguments
against lower prices is the possibility that money would be
deprived from research critical to developing lifesaving
Experience in countries where drug prices are regulated shows
pharmaceutical makers are right _ up to a point.
"Simple observation would show that there is little
pharmaceutical research undertaken in nations having the lowest
pharmaceutical prices," said Albert Wertheimer, dean of the
Philadelphia College of Pharmacy and Science's School of
Take Australia, where 90 percent of all prescriptions are
regulated. Drugs cost 55 percent of average world prices in
But one result, Wertheimer said, is that "with virtually no
incentive to develop new drugs, the pharmaceutical industry there
produces few new medications."
The U.S. drug industry, one of the most profitable businesses
in the world, is a key target of the Clinton administration as it
grapples with taming the nation's spiraling medical bills.
The industry's drug prices have been deeply criticized as a
symbol of heartless greed. Several lawmakers have called for
price restraints to be included in the health care reform package
the administration is shaping.
Drug makers have suggested that such restraints would obstruct
the pipeline of new drugs.
"What's important is to find some happy medium that makes
drugs available at affordable prices but does not stymie the
efforts of an extremely successful industry," said Dr. Alan L.
Hillman, director of the Center for Health Policy at the
University of Pennsylvania's Leonard Davis Institute.
It might feel like walking a tightrope, but experience in
England, France and Germany shows it is possible to lower drug
prices without harming the industry, he said.
In Britain, for example, home of drug giants Glaxo, SmithKline
Beecham and Wellcome, the government allows companies with more
innovative products to keep more of the profits.
France, with stiff regulations on the drug industry, is home
to a number of successful, large drug companies like
Rhone-Poulenc. Drug makers there are required to show a new drug
will save costly medical treatments down the road in order to
justify the price.
U.S. drug makers already know how to operate in regulated
markets; about 45 percent of their sales are derived overseas. …