Reactions to NAAG Report on Cost and Benefits of Prescription Drugs

Published June 20, 2005

(June 20, 2005 — Chicago, IL) Earlier today, 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 Heartland Institute, an independent nonprofit research organization based in Chicago, offers the following resources to reporters covering the release of this report:

  • A statement by Joseph Bast, president of The Heartland Institute, who attended the January conference. The statement appears at the end of this media advisory.
  • A 54-page collection of background information on drug costs and benefits, which was sent to the 50 AGs and scheduled speakers at the January conference shortly before the conference took place. That collection can be found online at
  • The following experts on drug costs and benefits may be willing to provide background information on the subject to reporters:
  • Twila Brase, RN, president, Citizens’ Council on Health Care, [email protected], 651/646-8935
  • Dr. Richard O. Dolinar, M.D., senior fellow, The Heartland Institute, [email protected], 602/526-1235
  • Jim Frogue, state project director, Center for Health Transformation, [email protected], 202/375-2001
  • John Goodman, president, National Center for Policy Analysis, [email protected], 800/859-1154
  • Devon Herrick, senior fellow, National Center for Policy Analysis, [email protected], 800/859-1154
  • Merrill Matthews, director, Council for Affordable Health Insurance, [email protected], 703/836-6200 x383
  • Sally C. Pipes, president and CEO, Pacific Research Institute, [email protected], 415/955-6105

The following statement on the new report can be attributed to Joseph Bast, president of The Heartland Institute and coauthor of Why We Spend Too Much on Health Care (1993):

This report demonstrates that in a 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.

The new NAAG report generally does a good job presenting two competing points of view on issues surrounding prescription drug advertising, pricing, and regulation. I commend General William H. Sorrell of Vermont first for organizing a conference where both sides could be heard, and now 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. They 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.

The least impressive part of this report is the “Industry Overview” section that leads off the report. It seems fixated on increases in spending on prescription drugs and the marketing expenses of innovative drug manufacturers, implying a nefarious link. But 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, a national nonprofit organization based in Chicago. Founded in 1984, Heartland’s goal is to help build social movements in support of ideas that empower people. Among other publications, Heartland publishes Health Care News, a monthly publication on health care policy. Heartland is supported by approximately 1,500 donors and members. For more information, call Ralph Conner, Public Affairs Director, 312/377-4000, or email him at [email protected].