"The price of drugs floats all over the place in this country because we don't have anybody negotiating for all of us," said White. "The obvious question is: Why doesn't our government negotiate those kinds of low prices for everybody? Imagine the prices you'd get if you were negotiating for that many million people."
The pharmaceutical industry — which maintains more than 620 lobbyists in Washington, D.C. — flatly opposes that idea. "We have learned to live with the fact that public health clinics, Indian health service clinics and others will get this discount," said PhRMA's Trewhitt. "But if you try to extend this price control to all parts of the marketplace, it would stifle innovation and research into new drugs."
PhRMA devotes a large percentage of its budget to lobbying against drug price controls. A congressional bill that would have required the federal government to insist on FSS prices for all Medicare recipients has "languished in committee since February," said Alison Cassady, Research Director of U.S. PIRG. "It's not going anywhere." The Medicare bills that are under discussion do nothing to regulate drug prices, she said.
Thomas Scully, a Bush appointee, heads the Centers for Medicare and Medicaid Services. The government can't enforce lower prices for groups as large as Medicare, he told USA Today. "If we did it, we wouldn't be negotiating. We'd be price fixing ... If we did that, we'd destroy the market."
Would the market be destroyed?
Back to that West Virginia Lasix prescription: Who gets the extra $12, the difference between the West Virginia drug store price and the price the federal government pays?
In the case of Lasix, the pharmacy and wholesaler get around $3. The pharmaceutical company gets most of the other $9.
"The majority of the price differentials are the result of drug manufacturer pricing strategies, not wholesale or retail markups," said a report from the Committee on Government Reform of the U.S. House of Representatives.
There appears to be a lot of wiggle room for price negotiation. The pharmaceutical industry is the world's most profitable, with 17 percent profit. The actual ingredients for most pills cost 5 cents on the dollar, according to U.S. PIRG. About a third of the price of many patented pills is spent on advertising, according to statistics from a number of sources.
PhRMA's Trewhitt strongly protests the implication that drug prices could be slashed without courting a disastrous cutback in research into new lifesaving drugs. It takes approximately $800 million to develop a new drug, he said. "If there was a government mandate that prices would be cut, it would probably force a cutback in research and development," he said.
Organizations like the Alliance of Retired Americans say the federal taxpayers fund most drug research through organizations like the National Institutes of Health. Absolutely not so, says Trewhitt. "NIH does only core research," he said.
Boston University's Sagar sees FSS prices as a logical peg for widespread discounts. If the government gets the discount, the citizens should too, he said. "If prices were cut for all Americans, say at the FSS level, at today's prices, that might deprive the drugmakers of $40 to $50 billion in revenue," he said.
In the long run, he says, such a cut might actually end up being good for the drugmakers.
"If you cut prices, what happens? Quantity and demand revives. So the drugmakers recoup much of their profits because people can afford to fill their prescriptions."
If the government subsidized drugs for people who still couldn't afford them, more of the pharmaceutical company profits would be restored, he said.
Asked to comment on this idea, PhRMA's Trewhitt sighed. He said that Canada has only produced two new drugs through research since national price controls were imposed. "So what Sagar is advocating has not worked in reality," he said. "Government price-setting has badly stifled innovation in pharmaceuticals in other countries."
Trewhitt and Sagar clearly use different yardsticks when they measure the success of government price control. Trewhitt measures success by the number of new drugs developed. Sagar measures it by the number of people who can afford to buy necessary medication.
National price-cuts to FSS levels — or any other — would be "cutting off your nose to spite your face," Trewhitt said. "We need better medicines. We cannot stop now. We are not providing quality of care with the existing arsenal of medicines for Alzheimer's, cancer, any number of diseases. We cannot stop now."
He wants Congress to pass the Medicare bills that Sagar says give the pharmaceutical industry a blank check. Prices will soar if such a bill passes, Sagar predicts, "and high prices are the enemy of profit and research because high prices make Americans desperate.
"They try to go to the VA, and they try to go to Canada," he said. "And if those safety valves are blocked — by the U.S. FDA or anybody else — desperate Americans who can no longer get lower-priced drugs will rise in fury and elect the angriest Congress in the history of the nation."
"We cannot stop now," Trewhitt repeats.