A handy scapegoat

Edwin Feulner

March 30, 1993|By Edwin Feulner

PRESIDENT Clinton recently launched an all-out public attack on the pharmaceutical industry for the high prices of prescription drugs and vaccines.

He blames the industry for a host of evils -- but especially for low vaccination rates among preschool children. As a remedy, he wants Washington to spend $300 million, among other things to vaccinate a million children next year. He also wants the government to buy up all vaccines produced in the United States and give them free to physicians and public health clinics.

But are drug companies really the villains they're made out to be? Even in the 12 states where vaccinations are free, vaccination rates are only slightly higher than in the rest of the country. The problem isn't the price -- it's the fact that too many parents don't understand either the importance of vaccination, or that free services are available.

In truth, Mr. Clinton's attack on the price of prescription drugs and vaccines -- echoed by other big-government liberals at recent congressional hearings -- is just the first salvo in a campaign to soften us up for health-care price controls.

Why attack the pharmaceutical industry? It's not because prescription drug prices are increasing any more rapidly than hospital costs or doctor bills or health-insurance premiums. In fact, drug prices have been increasing more slowly. The U.S. Bureau of Labor Statistics reports that in 1992 prescription drug prices increased less than at any time in the last 15 years -- only 5.7 percent. By contrast, overall health-care costs increased by 13 percent.

The real reason Mr. Clinton has singled out the drug companies is simple: because, unlike x-rays or lab tests, most Americans pay directly for drugs. Therefore, they are aware how much costs have gone up. The problem with this approach is that it assumes high prices are the cause -- not a symptom -- of America's health-care crisis.

The fact that the White House could find only one area in the entire health-care industry where Americans know how much they're paying should have made a little light come on. It obviously didn't.

Because employers pick up the tab, most Americans don't know how much they spend on medical care. If such were the case in any other industry, prices in that industry would soon rocket into the upper stratosphere as well.

My organization, the Heritage Foundation, has proposed a plan that would do this by giving the same tax break the government extends for employer-provided health-care benefits directly to individuals. This way, people would buy only what they need --and health-care providers would be forced to give the best deals for the lowest price. Americans wouldn't lose their coverage when they change jobs, and a system of health-care vouchers would ensure that low-income individuals and the unemployed wouldn't be left in the cold.

Edwin Feulner is president of the Heritage Foundation, a conservative think tank.

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