Millions of seniors could soon lose access to some of the prescription drugs they need. In Congress, Sen. Richard Durbin (D-Ill.) and Reps. Jan Schakowsky (D-Ill.) and Marion Berry (D-Ark.) recently introduced legislation to completely revamp the Medicare prescription drug benefit. In the process, they inserted provisions that would stifle medical innovation.

The Medicare drug benefit, known as Part D, is currently administered by the private sector. Seniors choose a drug plan from one of many competing insurance companies. Nationwide, according to a 2008 study from the Kaiser Foundation, there are over 1,800 plans available.

So in order to get customers, insurance companies compete for business by offering generous coverage at an affordable price. This competition helps explain why, in 2008, the monthly premium for a basic Part D drug plan was just under $28, significantly less than the $44 that the Congressional Budget Office had predicted when the program was created.

The proposed bill would scrap this model by establishing one or more government run drug plans to compete with private insurers.

The government, though, can operate at a loss. So in the long run, the government would undercut private providers and drive most of them out of the program, squelching the competition that has been so instrumental in holding down drug prices in the Medicare Part D program. Even some Democrats in Congress admit not only that the bill will have this effect but also that they intentionally designed it to. Rep. Berry recently told Congressional Quarterly that "if this [bill] works as we think it will, most of the private plans would drop out."

The bill has another dangerous provision.

As currently structured, Part D prohibits the government from negotiating drug prices directly with pharmaceutical companies. In other words, it's the private insurers that negotiate prices with drug companies. The bill would eliminate this prohibition and allow the government to step in and negotiate drug prices. This provision would create a de facto system of price controls.

The federal government is far too powerful to negotiate on a level playing field. Negotiating with the government is like negotiating with the Mafia -- it makes you offers you can't refuse. The drug benefit at the Department of Veterans Affairs (VA), for instance, "negotiates" prices by requiring drug companies to sell their products at a price that is at least 24 percent off the average price of what others pay.

Companies that are willing to drop their prices this low make it onto the VA's drug formulary. Many companies, though, aren't willing to budge. That's why the VA benefit offers so many fewer drugs than its Medicare-Part-D counterpart. According to a Lewin Group study, of the top 300 drugs used by the Part-D population, only 65 percent are included in the VA plan. The most popular Part-D plan covers more than 95 percent of those 300 drugs.

This is a natural consequence of price controls. It costs about $1 billion to bring a new drug from the initial research stages to market. So the VA makes it difficult for drug manufacturers to recoup their massive investment. Price controls in the much-larger Part D program would likely turn drug development into a money-losing enterprise. This would leave drug companies with little choice but to simply stop financing research into new treatments.

This is exactly what happened when Florida imposed price controls on homeowners insurance a few years ago. State Farm, once the largest writer of homeowners insurance in Florida, announced last month that it was discontinuing its operations in the state. Since price controls came into effect, the company had been losing $20 million a month. Other insurance companies have also fled the state or dropped policies to avoid losing money.

The advocates of the Medicare Part D legislation being considered in Congress might be well intentioned. But their plan would result in fewer choices for America's seniors. And it would choke off research into future medical treatments.

Lawrence A. Hunter, Ph.D., is president of the Social Security Institute (www. socialsecurityinstitute.com) and a senior fellow at Americans for Prosperity (www. americansforprosperity.org).