The new Medicare Part D drug benefit will cost seniors less in premiums than anyone expected, ensure access to virtually any FDA-approved medicine , and cut total drug spending for those with moderate or high prescription costs by about two-thirds.

Families USA, a group that calls itself “the voice for health care consumers,” doesn’t like it. The organization’s president, Ron Pollack, went on a rhetorical rampage these last few weeks. He claimed that instead of Part D, seniors should get the same drug benefit the Department of Veterans Affairs gives former servicemembers.

Huh? The VA provides an important service, but it is rarely held up as a model of cutting-edge medicine—with good reason: The VA drug formulary, which determines the medicines available to veterans, is severely limited.

Only 19 percent of drugs approved by the FDA since 2000 are listed on the VA formulary. Only 38 percent of drugs approved in the 1990s are listed.

For example, the top-selling drug Lipitor, a statin that lowers the risk of heart attack and stroke, is not on the list.

Similar cholesterol-lowering statins are on the formulary, and Pollack would probably just direct patients to one of them. But one size really doesn’t fit all: Patients react to different drug variations in different ways.

Lipitor, moreover, is the one size that would fit most: Clinical trials have shown it to be best in its class at reducing death rates.

This is what happens when a single buyer must meet the needs of 4 million people. The buyer — in this case, the VA — tries to control costs, and some needs don’t get met. Now Pollack wants to see this system instituted for the nearly 40 million Americans who rely on Medicare.

Why? Pollack argues that if Medicare acted as sole middleman pharmaceutical companies and the seniors who buy their products, it could wrangle dirt-cheap prices for all. He claims that this is what the VA does -- using its size to negotiate bulk discounts -- and that if the VA can, Medicare can too.

Pollack is wrong. The VA’s negotiating power comes from the federal government’s forcing of drug makers to sell to the VA before they sell to other government programs, like Medicaid, which dwarf theVA in size. These government agencies control about 15 percent of the entire U.S. prescription drug market.

Since the 4 million veterans who benefit from VA services make up a small market, drug companies can absorb the cost of the VA discount.

Extending the same cut rate to 40 million Medicare beneficiaries would be a radically different proposition. They constitute the bulk of the U.S. drug market, so giving Medicare theVAdiscount would amount to implementing nationwide price controls.

Let’s look at what would happen under price controls: Pharmaceutical makers would take a big hit to their bottom lines. In Pollack’s economic fantasyland, that doesn’t matter because drug companies have infinite profit margins. No matter how much we squeeze profits, this magical theory says, the companies will keep on inventing and making the medicines we clamor for.

That’s simply not true. It costs a company about $800 million to develop a new drug and see it through the FDA approval bureaucracy. If companies cannot sell at a price that covers costs and turns a profit, they will stop inventing new drugs.

Government intervention has already choked off drug innovation virtually everywhere else. This is why people the world over use cancer and AIDS medications invented in the United States. If we mandate price controls here, more life-saving breakthroughs will be lost.

In addition to shutting off the path to future scientific advances, national price controls could hurt patients right now. In his new study “Older Drugs, Shorter Lives?” Columbia Business School professor Frank Lichtenberg found that the VA formulary may have a negative impact on veterans’ life expectancy.

In the six years before the formulary was introduced in 1997, both overall U.S. male life expectancy and veterans’ life expectancy increased significantly. From 1997 to 2002, though, while overall U.S. male life expectancy continued to rise, growth in veterans’ life expectancy came to a halt.

Instead of mandating nationwide price controls, the new Medicare drug benefit creates competition among numerous private drug insurers. Ten nationwide companies plus many more regional ones are already jostling to offer consumers the best prices and cost-benefit combinations.

The Medicare drug plan is far from perfect, but seniors will have access to virtually any medicine, however cutting-edge. Instead of trying to force America’s seniors into the VA’s pharmaceutical straitjacket, Families USA should be advocating that veterans be able to transfer to the new Medicare benefit, where they’ll be more likely to get the precise medicines they need.