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Published August 1, 2001

Pharmaceutical Price Controls and Patient Welfare
John E. Calfee, Ph.D.
Annals of Internal Medicine Volume 134, 6/5/01

John Calfee of the American Enterprise Institute examines the negative effects of price controls on pharmaceutical R&D and patient welfare. He describes the important role market-based pricing structures play in pharmaceutical research and development and explains how government price controls would “substantially reduce incentives to pursue innovative research, as is evident in advanced economies in which price controls are now in force.”

Price controls, notes Calfee, “offer short-term gains for a small proportion of patients at the cost of curtailing research that promises to bring far better therapies in the future.” He concludes, “The notion that controls could provide reasonable incentives for future research has no foundation.”

The full text of John Calfee’s article, “Pharmaceutical Price Controls and Patient Welfare,” is available on the Internet at

Jeffordsonian Health Care
Robert Goldberg
National Review Online 6/4/01

The real impact of Senator Jim Jeffords leaving the Republican Party may be on health care, says Robert Goldberg of the National Center for Policy Analysis. With Jeffords’ departure from the Republican Party, the powerful Kennedy-Clinton health care base will have the upper hand; it can be expected to push the Patients’ Bill of Rights, expansion of Medicaid, and a prescription drug benefit with price controls and limits on patents. Goldberg says the “war on medical progress and market-based health care has begun.”

The full text of Robert Goldberg’s guest commentary for National Review Online can be found on the Internet at

Right and Wrong Ways to Address the Needs of the Uninsured
James Frogue
The Heritage Foundation

The recently passed federal budget contains $28 billion to help reduced the number of uninsured Americans. In his final Heritage Foundation paper before joining Rep. Kay Granger’s (R-Texas) staff as legislative director, Jim Frogue outlines the right and wrong ways to spend that money.

The wrong ways, notes Frogue, would be to allow “above-the-line” tax deductions or to expand the troubled Medicaid program. Instead, the money would be best spent on refundable tax credits that allow families to purchase and have ownership of their own health plans.

The full text of Frogue’s June 4 Executive Memorandum is available on The Heritage Foundation’s Web site at

Why Adopting the “Common Ground” Health Care Proposal Would Be a Costly Mistake
Robert E. Moffit, Ph.D.
The Heritage Foundation

The “Common Ground proposal” developed by the Health Insurance Association of America (HIAA) and Families USA contains unsound health policy, says Robert Moffit of The Heritage Foundation.

The proposal is flawed for a number of reasons, according to Moffit:

  • Its requirements would be extremely difficult for businesses to implement, requiring them to gather “an unreasonable amount of personal information on household income to verify eligibility;”
  • It relies on an inefficient small employer system;
  • It reinforces flaws in the current system that spur patient dissatisfaction;
  • It would significantly expand Medicaid; and
  • It would lay the groundwork for further government control of the health sector.

Robert Moffit’s analysis of the Common Ground proposal is available on the Internet at The Heritage Foundation’s Web site:

A Better Patients’ Bill of Rights
John Hoff
National Center for Policy Analysis

The proposed Patients’ Bill of Rights would greatly increase litigation, increase the cost of health insurance, and decrease the number of Americans with health insurance, according to health care attorney John Hoff.

In a paper for the National Center for Policy Analysis, Hoff contends litigation causes “more money [to be] spent in the friction of the process than in compensating injured victims”; it is “time-consuming and delays recovery for injured plaintiffs,” he says.

According to Hoff, the Early Offers approach developed by Jeffrey O’Connell, professor of law at the University of Virginia, would give both health care plans and beneficiaries incentives to avoid costly litigation and settle coverage disputes.

The full text of John Hoff’s Brief Analysis, issued on April 19, is available on the NCPA Web site at