AGs Issue Report on Drug Policy Debate

Published August 1, 2005

On June 20, the National Association of Attorneys General (NAAG) released a report written by two Vermont assistant attorneys general titled “Addressing the Cost and Benefits of Prescription Drugs.” The report contains background information and edited transcripts of eight presentations made at a conference held in Chicago in January of this year.

The report demonstrates that in fair and open debate, a free-market perspective on health care policy clearly bests the statist or anti-market approach. The best way to attain the important benefits of prescription drugs in the future is to continue to avoid the price controls, restrictions on advertising, and other regulations that have crippled the pharmaceutical industry in Europe.

Competing Views Presented

The NAAG conference generally did a good job presenting two competing points of view on issues surrounding prescription drug advertising, pricing, and regulation. General William H. Sorrell of Vermont is to be commended for organizing a conference where both sides could be heard and issuing a report that faithfully reports the words of real experts on these issues.

The edited transcripts of presentations by John Calfee, Scott M. Lassman, Daniel Troy, and Michael E. Doodson clearly and succinctly explain why concern over rising spending levels, “me-too” drugs and related patent protection issues, and direct-to-consumer advertising is largely misplaced and provides no justification for government interference. Anyone who needs to understand these issues will benefit from reading these presentations.

The presentations by Marcia Angell, Jerome Kassiser, and John Kitzhaber, by contrast, seem only to trot out the now-familiar anecdotes and assumptions of liberal critics of America’s health care system. These authors pine for the days when life-saving drugs were not considered “commodities” and when premature death was simply accepted as “inevitable.” Few doctors or patients, I think, will be persuaded to embrace their reform agenda.

Industry Overview Deficient

The least impressive part of this report is the “Industry Overview” that leads off the report. It seems fixated on overall increases in spending on prescription drugs and the marketing expenses of innovative drug manufacturers, implying a nefarious link.

More attention to drug prices, especially the rapid fall in drug prices when generic drugs reach the market, and the increase in industry spending on research and development, especially when compared with falling R&D spending by pharmaceutical companies in Europe, would provide readers with a more accurate understanding of how the industry works.

Joseph L. Bast ([email protected]) is president of The Heartland Institute and publisher of Health Care News.

For more information …

“Addressing the Cost and Benefits of Prescription Drugs,” the June 20 report by the National Association of Attorneys General, is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to, click on the PolicyBot™ button, and search for document #17452.

A detailed report on the January NAAG conference written by Joseph Bast, “NAAG Casts Its Eyes on the Drug Industry,” is available online at

Two articles on the January conference appeared in the March 2005 issue of Health Care News and are available online: “Prescription Drug Pricing Attacked, Defended,”, and “Advertising Prescription Drugs: Is It Wasted?”

“Research and Commentary on the Costs, Benefits, and Regulation of Prescription Drugs,” a 54-page collection of background information on drug costs and benefits, which was sent to the 50 attorneys general and scheduled speakers at the January conference shortly before the conference took place, is available online at