The Congressional Budget Office says that the cost of paying for drugs for those on Medicare will be much higher than White House estimates. The prediction drew a sharp rebuke from President Clinton, who said that "whenever there's been a difference between the CBO and us, we've been right and they've been wrong."

• The CBO figures the benefit would cost $50 billion more over 10 years than administration estimates.

• The administration predicts the cost over a decade would be $118 billion, while the CBO says it would reach $168 billion -- or 40 percent higher.

• In addition, the budget office says that the proposed savings in the traditional Medicare program -- which the White House estimated at $64 billion over 10 years -- would actually amount to only $48 billion.

Experts say that if the Clinton plan becomes law, Medicare officials will do everything they can to make sure costs don't rise faster than projected. Prescription-drug expenditures for the elderly are growing at an annual rate of about 15 percent. But the administration projects only a 5 percent a year increase.

The Clinton plan is to hold down costs by assigning a single management firm to negotiate prices and specify drug choices for each geographical region of the nation. Few doubt that full- blown price controls on pharmaceuticals would follow.

Experts warn that controls would spell the beginning of the end of pharmaceutical research here.

Source: Laurie McGinley, "CBO Pegs Cost of Medicare Drug Benefit Far Above Estimate in Clinton Proposal," and John E. Calfee, "Price Controls Are a Prescription for Disaster," both in the Wall Street Journal, July 22, 1999.

For CBO text http://www.cbo.gov
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