Any decision to expand federal coverage of pharmaceutical benefits should not be saddled with provisions that limit the ability of the government to negotiate for lower prices. If the US government is obligated to provide coverage, it must retain the flexibility to restrain patent owners from charging excessive prices for medicines. In the absence of even the possibility to negotiate lower prices, there will be no restraint in terms of price increases. The United States already is spending more than 2 percent of GDP on pharmaceutical purchases, and these outlays continue to skyrocket.

Every European country and most OECD countries have authority in domestic legislation to negotiate lower prices for medicines under government reimbursement programs, and/or the authority to order the issuance of compulsory licenses in cases of abuses by patent owners. If the US government has no authority to protect consumers or taxpayers, they will predictably be exploited by drug makers. This is particularly galling, because US taxpayers already provide massive direct and indirect public subsidies for the development of new drugs. US taxpayers and consumers should not be by hamstrung by the Medicare bill. If Sam's Club can negotiate for lower pharmaceutical prices, why can't Uncle Sam?

The defense of the "don't negotiate prices" provision in the Medicare bill is the familiar argument that any measure to protect taxpayers or consumers will undermine the development of new drugs. This argument is used time-and-time-again to justify an ever-expanding list of corporate welfare schemes and pricing abuses. However, rather than simply accept the notion that it is necessary to give unlimited power to the patent holders and drug manufacturers, Congress needs to explore more fiscally responsible alternatives.

Prudent negotiations of pharmaceutical prices will free up significant resources to provide greater coverage of seniors.

The "don't negotiate prices" provision on the Medicare bill is the wrong approach. What we need is a new commitment to negotiate better terms for the money we spend (publicly and privately) on R&D.