As someone who feels that the prescription drug entitlement pushed by President Bush and passed by the GOP-controlled Congress was one of the most appalling departures from conservatism Republicans have committed in recent years, pointing out this tid-bit of information in an article about Dem plans to allow the government to negotiate drug prices under the Medicare plan is sort of like putting lipstick on a pig.  But it does demonstrate once again how Democrats just flat-out fail to see (or refuse to see) the benefits of market-driven pricing.

The Bush administration has come out strongly against government negotiations, and Senate Majority Leader Harry Reid, D-Nev., would have to recruit at least nine Republicans to get the 60 votes necessary to ensure the bill can come up for a vote.

In preparation for the vote, the administration released new estimates of how much the benefit would cost. Originally, the program was expected to cost $926 billion from 2006 to 2015. Now the administration has dropped the estimate to $640 billion.

The most recent drop is largely because of competition among prescription plans resulting in lower costs, said Leslie Norwalk, administrator for the Centers for Medicare and Medicaid Services.

“If it’s working, why would you want the government to interfere with these negotiations?” Norwalk said.

So, thanks to competition among drug companies to attract the business of people using this prescription drug entitlement the cost to we taxpayers has gone down significantly.  Of course, I’d argue that we shouldn’t even be spending $640 billion on a prescription drug entitlement (people should be buying their own drugs), but the point here is that market forces work.

What the Dems want to do is allow the federal government to set the prices it is willing to pay for prescription drugs.  They call this “negotiating,” but we all know that the federal government doesn’t negotiate prices.  They set what they’re willing to pay and drug companies will either comply or not do business under the program.  Essentially, what this is is a half-way nationalization of the prescription drug industry, which is a terrible idea.

Drug companies have to invest hundreds of millions, even billions, into researching, designing and testing a new drug before it even becomes available to the public.  They charge certain prices on their already-public drugs in order to fund that research, design, etc., but if the federal government begins fixing prices in the drug industry they won’t be able to raise as much money for creating new drugs.

That means fewer pharmaceutical innovations for you and I, which isn’t a good thing at all.  But Democrats aren’t thinking of that.  Instead, they’re just thinking of pandering to a constituency with lower drug prices in the short run.