The pharmaceutical industry doesn't need or want a Medicare drug benefit, even though the benefit would spark demand and boost sales. The drug business already is going gangbusters, thank you very much, and the manufacturers fear the kind of oversight likely to go along with a government program.
Pharmaceutical manufacturers already are feeling the heat as Congress debates legislation to grant drug coverage. Fortune magazine recently anointed the drug industry the nation's most profitable business. President Clinton last week declared he's having a "genuine argument" with drugmakers regarding their profits.
Robust revenue and healthy bottom lines are almost guaranteed for years to come, unless the government intervenes with rate-setting or price controls. For a dose of what happens when the government becomes your business "partner," drugmakers need look no further than the nose dive in hospital profits since the Balanced Budget Act of 1997 took hold.
We do buy into the party line that drug companies need ample cash to adequately invest in research. But the profits of late have been almost gaudy, especially in comparison with the modest financial results posted by hospitals, nursing homes, physician groups and health plans.
Even the fat-and-sassy pharmaceutical industry may not be able to stop the political momentum of handing seniors a drug benefit during an election year. What it can change is its pricing structure and marketing behavior.