If a drug developer were forced to sell that drug to pharmacies at a price linked to what it charged the federal government, then the drug developer would simply charge the government more. The higher prices would then be passed along to the senior citizen. It would combine bad economics with a reduction in supply of drugs. If the government fixes a price for the drug that is unprofitable to a supplier, then the supplier is less likely to sell that drug. Research and development on tomorrow's cures would decline.
Pharmaceutical research is a risky business.
Also, fewer profits mean less money available to invest in the development of new drugs. The real problem, according to Heritage, is the lack of outpatient prescription drug coverage for needy seniors. See related articles in the AgeVenture archives. If you think senior travelers want to sit back and take it easy on vacation, you're right. Some do enjoy a passive, observational tour of the countryside.