MENU

Reason.com

Free Minds & Free Markets

President Trump: Competition Is the Solution to High Drug Prices

Change drug prices by changing the market.

HighDrugPricesSkypixelDreamstimeSkypixel/DreamstimeToday President Donald Trump recognized that the increasing competition, not price controls, is the way to lower prescription drug prices. All companies seek to set their prices by the rule "whatever the market will bear." The best way to change prices, therefore, is to change the markets. Imposing price controls would lower prices, but at the cost of creating shortages, developing fewer new drugs, and—ultimately—compelling Americans to lead sicker and shorter lives.

In his remarks at the Rose Garden today, the president asserted that his administration is "increasing competition and reducing regulatory burdens so drugs can be gotten to the market quicker and cheaper." The Food and Drug Administration (FDA) approval process is currently too slow, too costly, and too precautionary. This induces caution in drug companies, who constrict their development pipelines to less risky "sure thing" therapies. The high regulatory costs also keep smaller companies from entering the market in the first place.

Alas, the president did not suggest how his administration would reduce regulatory burdens on drug manufacturers. So here's a suggestion: He should dramatically modernize the FDA drug approval process so that new treatments become available to patients once they have made it through the Phase II safety testing. Patients who choose the new treatments would essentially be enrolled in Phase III efficacy trials. This would encourage new entrants and drastically cut the time and expense it takes to get new medicines to people.

The president did point out that under a new commissioner, Scott Gottlieb, the FDA is already spurring competition by speeding the approval of generic drugs. An FDA study has found that as the number of competing manufacturers for a drug goes up, the price falls dramatically. When two companies compete, the price falls an average of just 6 percent; when there are nine competitors, the price drops by an average of 80 percent. Another important reform that the president proposed is to "speed up the approval process for over-the-counter medicines so that patients can get more medicines without prescription."

Trump also denounced the ways Big Pharma companies regularly abuse the regulatory process to prevent generic drug companies from competing with medicines that have come off-patent. For example, big companies often restrict the supply of their medicines so that generic manufacturers cannot make the required comparisons to make sure that their products are similarlly efficacious. "Our patent system will reward innovation, but it will not be used as a shield to protect unfair monopolies," Trump declared. Brand name companies get 18 years of patent exclusivity, and that is enough.

One proposal the Trump administration has discussed that will not likely lower prices in the U.S. is somehow trying to force foreign countries to pay more for medicines developed in the United States. Such a move would have the salutary effect of providing drug companies more money they might spend on research, but higher prices abroad is no incentive for companies to lower prices at home beyond what competition in the marketplace will force.

But the good news is that the president recognizes that the solution to high drug prices is the same thing that encourages lower prices in any market: competition.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • JFree||

    So here's a suggestion: He should dramatically modernize the FDA drug approval process so that new treatments become available to patients once they have made it through the Phase II safety testing.

    Speeding up the process for getting exclusivity for a drug can't do a damn thing to change costs or improve competition.

    Ya want competition? Get rid of the patentability of chemicals altogether.

  • loveconstitution1789||

    Patents are in the Constitution and not by themselves the problem.

    Length of patents is one issue and well as government butting their nose into the medical realm that should be 100% free market.

  • Bubba Jones||

    Branded Prescription drugs are only 10% of medical spend.

  • JFree||

    We didn't patent chemicals (discovered) until the 1920's. Only a particular process (invention) to synthesize them. Germany's industrialization was based almost entirely on the chemical industry and they didn't allow chemical patents (only process) until we forced them to in the 1970's.

    Ayn Rand understood the difference even though she was wrong about what we patent

    a discovery cannot be patented, only an invention. A scientific or philosophical discovery, which identifies a law of nature, a principle or a fact of reality not previously known, cannot be the exclusive property of the discoverer because: (a) he did not create it, and (b) if he cares to make his discovery public, claiming it to be true, he cannot demand that men continue to pursue or practice falsehoods except by his permission.

    Patenting chemicals raises the cost of any production process because it eliminates many of the products that could be produced. Eliminating scale. Patenting process encourages research in discovering uses for products/byproducts. Improving scale.

  • JFree||

    The analogy is an oil refinery. If gasoline, kerosene, diesel, asphalt, BTX and olefins were all patented and owned by different people; then no refinery would have ever been built - and all those products would have to be manufactured in small amounts by a craft-style process that would be unique for each of those products.

  • Sevo||

    JFree|5.11.18 @ 6:21PM|#
    "The analogy is an oil refinery. If gasoline, kerosene, diesel, asphalt, BTX and olefins were all patented and owned by different people; then no refinery would have ever been built - and all those products would have to be manufactured in small amounts by a craft-style process that would be unique for each of those products."

    Counterfactual bullshit.

  • JFree||

    You just don't know a damn thing about the Gesner/Young patent wars over their coal-to-lamp oil process (one trademarked as Kerosene, the other as Paraffine). Or Sam Kier (US) and Ignacy Łukasiewicz (Poland) and the Mehedinteanu bros (Romania) - all a couple years later - but from petroleum seeps as a feedstock - with none of them going for process patents.

    Which meant the 'petroleum mining' industry could look for sources of petroleum supply to refine into lamp oil without getting strangled by royalties. Sure enough, within 5 years of the start of that patent war, oil was found via drilling not seepage in large quantities in Romania, US, Canada, Italy, Russia. And Rockefeller (the entrepreneur not the later rent-seeker) was the accountant and part-owner of his first refinery.

    While coal distilling went nowhere. And to you and your scummy ilk the solution is obvious. More extensive monopoly grants to the rent-seeker.

  • Sevo||

    "You just don't know a damn thing about the Gesner/Young patent wars over their coal-to-lamp oil process (one trademarked as Kerosene, the other as Paraffine). Or Sam Kier (US) and Ignacy Łukasiewi[...]
    getting strangled by royalties. Sure enough, within 5 years of the start of that patent war, oil was found via drilling not seepage in large quantities in Romania, US, Canada, Italy, Russia. And Rockefeller (the entrepreneur not the later rent-seeker) was the accountant and part-owner of his first refinery.
    While coal distilling went nowhere. And to you and your scummy ilk the solution is obvious. More extensive monopoly grants to the rent-seeker.'"

    Uh, yeah, man, that's DEEP!
    I'm sure an idiot like you thinks there is a lesson buried in that word salad, but you're not real birght. Keep up the arm-waving. It does nothing other than prove you are a lefty idiot.

  • aajax||

    How about a little civility here?

  • Sevo||

    aajax|5.11.18 @ 11:58PM|#
    "How about a little civility here?"
    JFree used up his ration of civility long ago; this is a lefty imbecile hoping someone buys his bullshit.
    I'll be more than happy to be civil to JFree when JFree stops posting lefty bullshit as something worthy of consideration.
    JFree has done nothing of the sort and deserves to be call on his(?) bullshit early and often

  • aajax||

    How about a little civility here?

  • Bubba Jones||

    Why would I spend $500M demonstrating the safety and efficacy of a product of if anyone can replicate it for a nickel?

  • JFree||

    Why would anyone spend a nickel figuring out how to reduce the costs of producing a substance when they can rentseek perpetual protection just by tweaking this or that?

    Insulin was discovered 100+ years ago. Synthesized by the 1950's. The chemical itself has been the object of at least 4 Nobels (from 1923 to the 1970's). Today a dose sells for $2-3 in Iran/India v $60 in the US.

  • jonnysage||

    Why dont we buy it from Iran then?

  • leninsmummy||

    Because the US market is where drug companies recoup their research and development costs.

  • aajax||

    Countries that subsidize products generally don't let them be sold to foreigners at anywhere near the subsidized price.

  • Sevo||

    aajax|5.12.18 @ 12:06AM|#
    "Countries that subsidize products generally don't let them be sold to foreigners at anywhere near the subsidized price."
    Idiots who make comments like this generally don't know what they are posting about.

  • Sevo||

    "Insulin was discovered 100+ years ago. Synthesized by the 1950's. The chemical itself has been the object of at least 4 Nobels (from 1923 to the 1970's). Today a dose sells for $2-3 in Iran/India v $60 in the US."

    "The price of insulin could be much lower (and hence more affordable)" Cite missing.
    Nowhere in there is there any reasons given for the different prices; it is worthless to your argument, which is not surprising.

  • aajax||

    If they could invest a nickel and reduce costs by a dime, that might be worth it.

  • Sevo||

    aajax|5.12.18 @ 12:02AM|#
    "If they could invest a nickel and reduce costs by a dime, that might be worth it."
    If, if, if...
    Did you have a point?

  • jonnysage||

    Why would anyone bother developing them then?

  • Elias Fakaname||

    If there is no profit motive in drugs, then no one will invest the money to develop them. Then we will get stuck with the government taking over drug development. Which is worse.

  • aajax||

    The government is heavily invested in drug research, much to the benefit of the industry.

  • JFree||

    Oh - so govt should create the profits for drug development by prohibiting competition - and also often fund/do the basic research as well - and help to create the discount rates that determine the rate of return on investment - and pay for much of the final product as well.

    And we can call that a free market.

  • Sevo||

    Oh, boy! A pile of JFree bullshit to jam back in his face:

    JFree|5.12.18 @ 12:15AM|#
    "Oh - so govt should create the profits for drug development by prohibiting competition"
    So idiots like you presume the right to profit from a costly development is a "creation" of a profit? Was third grad math difficult?

    "- and also often fund/do the basic research as well - and help to create the discount rates that determine the rate of return on investment - and pay for much of the final product as well."
    Cite missing and will continue to be missing. Idiots like you lalim much and deliver little.
    Fuck off, scumbag.

    "And we can call that a free market."
    No, imbeciles like you invent strawmen and do so.
    Again, fuck off, scumbag.

  • damikesc||

    They do that with movies, music, etc.

    Why should drugs, which cost dramatically more to create not be covered?

  • BestUsedCarSales||

    I hope he follows through. This could do a lot of good if it is pushed hard and people don't freakout and fallback the first time someone has some weird reaction to a medicine.

  • loveconstitution1789||

    Trump has a fairly easy time telling people to fuck off, so I am hopeful that he will tackle FDA reform, social security reform, and medicare/medicaid reform.

  • BestUsedCarSales||

    Here's hoping. Because he also seems to have a tendency to change his mind randomly.

  • loveconstitution1789||

    He does. You cannot really go by what he tweets.

    He did campaign on reforming those huge social programs and he does seem to try and keep campaign promises.

    We'll see, says the Chinese Zen Master.

  • BestUsedCarSales||

    I'm always hopeful, and I will give him credit if he does it.

  • Calidissident||

    Trump explicitly said he wasn't going to touch Social Security and Medicare.

  • Palin's Buttplug||

    Shhh, LoveCons actually believes his own bullshit.

  • Elias Fakaname||

    Do you believe yours, you fucking traitor.

  • Moo Cow||

    "I'm not going to cut Social Security like every other Republican and I'm not going to cut Medicare or Medicaid."

    Donald J Trump

  • aajax||

    Actually he campaigned on NOT reforming Social Security or Medicare. Cutting programs that help the poor, like Medicaid and SNAP were the only promised reforms. So much for helping unemployed coal miners and rust-belters.

  • Sevo||

    aajax|5.12.18 @ 12:13AM|#
    "Actually he campaigned on NOT reforming Social Security or Medicare. Cutting programs that help the poor, like Medicaid and SNAP were the only promised reforms. So much for helping unemployed coal miners and rust-belters."
    Aw, poor, poor aajax. Lost with that hag, did you?
    Well, grow up and shut up.

  • Rev. Arthur L. Kirkland||

    Trump has a fairly easy time telling people to fuck off, so I am hopeful that he will tackle FDA reform, social security reform, and medicare/medicaid reform.

    Try your damnedest, wingnuts.

    You probably should plan to get it done before January, though -- or the administration-crushing indictments, whichever comes first.

  • loveconstitution1789||

    I take it Reason is chocking this up into the Trump: Good column?

    I always wondered who soothes Reason staff when they cannot handle all the items in the Trump: Good column.

  • aajax||

    Got a list? I'll bet it is 75% not good at all.

  • Steve-O||

    Probably a fair assessment. On the one hand, it is Reason's role to criticize. On the other hand, from a libertarian perspective, Trump is probably the best president of my lifetime . . . which is incredibly sad.

  • damikesc||

    This site's writers lost me with their election piece. Where several said they'd vote for Hillary and zero for Trump.

    If you will vote for Hillary, you have zero claim to being libertarian.

  • Shirley Knott||

    Do be aware that moving drugs from prescription to over-the-counter status will increase, sometimes dramatically the *seen* cost of drugs.
    Expect lots of "my insurance used to cover this and now it costs too much."

    I think the changes proposed are good ones, but shifting costs will have impacts that will increase the cries for wrong solutions to the problem.

  • Sevo||

    Shirley Knott|5.11.18 @ 4:55PM|#
    "Do be aware that moving drugs from prescription to over-the-counter status will increase, sometimes dramatically the *seen* cost of drugs.
    Expect lots of "my insurance used to cover this and now it costs too much.""

    You're right. The distortion would be competed-out sooner or later, but given the upward price-distortion of O-care on medical care, it might well get lost in the overall noise.
    Not sure what the answer is when people are getting 'free shit' paid by others and then lose it when the goods are priced at market.
    Other than not allowing the government to distort the prices in the first place, but that bell has been rung long ago.

  • BestUsedCarSales||

    How to get from here to there is one of the hardest parts of libertarianism. It's also one of the most frequent weapon used against us. That we'll immediately take all the SS money from Grandma. That we'll immediately just start selling all roads or some shit. I don't know.

    My hope for some amount of gradualism is probably my most conservative tendency come out. But it's a painful process, and it's difficult to teach the nation at large to rip off that damn band-aid.

  • Sevo||

    BestUsedCarSales|5.11.18 @ 10:58PM|#
    "How to get from here to there is one of the hardest parts of libertarianism."

    I'm agreeing in that we live in a world where those who cast votes can vote to pick your pocket with little harm to themselves; the assholes presume someone else is going to pay for it. I'm also not sure the way forward is to fight every effort to pick pockets.
    This means fighting every single battle with the Revs, turds, Tonys, etc. who claim they deserve it.
    Theres'a an alternative: make the turds, Tonys, Revs, etc justify every single one of their desire to pick pockets every time they propose to do so.
    How about the "Anti Pocket Picking Law"?

  • aajax||

    I'd start with dismantling the rent-seeking at the corporate level, but even this will be difficult when it affects numerous workers.

    We may not be too far from the time when younger folks will be willing to reign in grandma's sense of entitlement, though, once they wake up to what's going on.

  • Sevo||

    aajax|5.12.18 @ 12:23AM|#
    "I'd start with dismantling the rent-seeking at the corporate level, but even this will be difficult when it affects numerous workers."
    Yep Elon Musk is gonna be pissed along with al the (non-union) folks in that Fremont plant that the lefty CA congress-critters arranged for him.
    Is that what you intended? Just checking.

    "We may not be too far from the time when younger folks will be willing to reign in grandma's sense of entitlement, though, once they wake up to what's going on."
    We may not be far from those like you find out there is no free shit, but I have my doubts.

  • Benitacanova||

    Higher prices abroad might not lower costs for u.s, customers, but it sure as hell will be more fair than what's going on now. It's nuts that the same brand will go for a fraction of the price over here (Italy). It makes it easier for them to pretend that socialized healthcare is superior.

  • Rich||

    He should dramatically modernize the FDA drug approval process

    by just labeling everything with the disclaimer: "These statements have not been evaluated by the Food and Drug Administration.These products are not intended to diagnose, treat, cure or prevent any disease."

  • Cynical Asshole||

    Well, pigfucker, I find the best way to tell someone they're a pigfucker is through and anonymous internet comment. OK, pigfucker?

  • Bubba Jones||

    The scenario you describe is that the FDA allow me to sell a product when I have proven it safe.

    Will you also allow me to make marketing claims that I have not yet proven in clinical trials? Or will I still have to run the phase iii trials before I can market or get reimbursed for the drug?

    And what do you mean by safe? All drugs are toxic. "Safe" is defined by the risk benefit of the toxicity vs the efficacy. But phase II doesn't prove efficacy so I can't calculate a risk/benefit ratio and therefore can't make an informed decision about whether to take the drug, prescribe the drug or reimburse for the drug.

    The pundits on this topic really lack a deep understanding of what is involved.

  • Christophe||

    Going by Wikipedia it seems that phase II does measure efficacy (eg: impacts tumor size) but not effectiveness (eg: improves cancer survival rates).

    So that does seem like a reasonably effective place to start selling, especially when the impact is high.

  • damikesc||

    I don't see the point of FDA review.

    Companies do not WANT the risk of massive lawsuits for unsafe drugs. FDA approval provides zero protection from suits.

    So what is the POINT of it?

  • Palin's Buttplug||

    Actual Nazi leads GOP field in California Senate Race with 18% (Feinstein has 38%)

    https://goo.gl/fnwRps

    Little, 33, calls himself a White Nationalist. He rejects the labels of White Supremacist and neo-Nazi, saying the latter would just play right into the hands of the Jewish media. During the interview, he rattles off some familiar anti-Semitic tropes: that the Holocaust is a hoax, that Israel played a major role in the 9/11 terrorist bombings, that Jews controlled the African slave trade before the Civil War, that "Jews kill Christians — they do it a lot historically."

    He adds a few more contemporary charges, such as that President Donald Trump is being held hostage by Jews and that media organizations including Fox News are mouthpieces for Israel. He says one of his major goals as a senator from California would be to re-route all U.S. aid now going to Israel to Hezbollah, and make it a crime — punishable by the death penalty — if any politician ever suggests aid be restored to Israel.

  • KevinP||

    From your article:

    The California Republican party, however, has repudiated him and barred him from last weekend's state convention in San Diego

  • Palin's Buttplug||

    Little led all candidates among voters who described themselves as Republicans, conservatives and those who had not attended college, polling at 46 percent of Republican respondents.

    Nazis are at home in today's GOP.

  • ||

    Actually, it looks like Nazis are at home in today's California.

  • ||

    Although, actually it looks more to me like the poll this was based on was flawed, since this guy has not shown up with any significant following anywhere in any other poll.

  • Palin's Buttplug||

    538 rates SUSA an 'A' - at the top of the pollster list.

    https://goo.gl/zvqSrf

  • ||

    And?

  • Palin's Buttplug||

    You said the poll was flawed.

    Probably because you don't like the data.

    According to RCP no one else has polled the CA Senate race yet you cite "other" polls.

  • ||

    Bullshit. There are at least eight polls available on the CA senate race and only one (the one you cited) shows this bozo with any following at all.

    If RCP says that they are wrong however knowing your reading ability I suspect it is you.

  • Christophe||

    Looks like you're right Isaac, although the Republican numbers swing around widely depending on who's listed in the question.

    Seem like the likely explanation here is that republican respondents more-or-less pick an (R) at random from the list, without checking the guy's platform. So if list a nazi as an R in your poll, he automatically gets a decent chunk of the republican vote (especially if you also don't list other republican candidates).

    Most polls didn't even bother asking about Republican candidates at all.

  • ||

    It also looks suspiciously like the poll in question actually listed only this guy's name with a few other low pollers in their list of Republican hopefuls, all the while omitting the name of the Republican frontrunner in all the other polls.

  • Sevo||

    "It also looks suspiciously like the poll in question actually listed only this guy's name with a few other low pollers in their list of Republican hopefuls, all the while omitting the name of the Republican frontrunner in all the other polls."

    SHOCK!
    turd would knwoingly cite a skewed poll to 'prove' one of his lies???!!!

  • Elias Fakaname||

    So there's this one weirdo Nazi? But every single progressive is a communist traitor. You're the same as him? You're just arguing over who is in charge.

  • Cynical Asshole||

    Surely you weren't expecting honesty from Shriek?

  • Palin's Buttplug||

    Does Little lead among conservative voters?

    Yes, he does.

    Learn to fucking read.

  • Cynical Asshole||

    Nazis are at home in today's GOP.

    The California Republican party, however, has repudiated him and barred him from last weekend's state convention in San Diego

    Learn to fucking read.

    You first, you fucking dishonest little shithead. If Nazi's were "at home in today's GOP" then why has the California GOP repudiated him?

  • Palin's Buttplug||

    Because the party leader and elected GOP executive calls fascists/Neo-Nazis "fine people" and courts their vote as his base.

  • leninsmummy||

    Yep. Because there are certainly enough nazis in this country to form a base of a major political party. Not sure where they all were when Obama got elected.. probably in Israel learning how to troll social media from The Russians.

  • Sevo||

    "Because the party leader and elected GOP executive calls fascists/Neo-Nazis "fine people" and courts their vote as his base."

    Cite missing, turd, and hint: Taking quotes out of context just proves what a slimy piece of shit you are.
    Go ahead you scumbag, put those cites out here where you will be proven to lie yet one more time.

  • Elias Fakaname||

    PB, ideologically, YOU are pretty much a Nazi.

  • Elias Fakaname||

    No one likes any favor of socialist except you amd your commie faggot friends Shreek. So just stop. Your little tantrum is an embarrassment to yourself.

    You amd people like you are the nazis and communists. All just different bastard children of Marxism. Not republicans or libertarians. You just split hairs and argue over who should be in charge. But the bottom line is you're evil, and we're good.

  • ||

    One fucking poll shows this bozo anywhere.

    I find it hard to believe that any candidate is getting anywhere with Republicans making the kind of anti-Israel statements this guy is making.

  • damikesc||

    Democrats in DC voted for a virulently anti-Semitic candidate for council.

    He didn't win the nomination. He won the election.

    Maxine Waters, whose brain stopped working decades ago, still wins EASY election.

    Hank Johnson, who worries that too many people will make Guam CAPSIZE wins easy election.

    Again, not primaries. ELECTIONS.

  • KevinP||

    The Photo That Never Saw The Light of Day: Obama With [racist and anti-semite Louis] Farrakhan in 2005


    Quote:
    A journalist announced last week that he will publish a photograph of then-Illinois Sen. Barack Obama (D) and Nation of Islam leader Louis Farrakhan that he took in 2005 at a Congressional Black Caucus meeting, but did not make public because he believed it would have "made a difference" to Obama's political future.

    The photographer, Askia Muhammad, told the Trice Edney News Wire that he "gave the picture up at the time and basically swore secrecy."
  • Palin's Buttplug||

    Farrakhan is a scumbag.

    Maybe he and Little can get together and persecute some Jews.

    Let me know when Farrakhan gets 30% of Dem vote like Little did with the GOP.

  • ||

    The bullshit smell of that poll is too strong.

    No one has ever accused Republicans of being anti-Israel.

  • Palin's Buttplug||

    And the GOP is not anti-Israel at all. In fact Israel may be the only country conservatives like now that South Africa has eliminated apartheid.

  • ||

    Wait, is it wrong to be pro-Israel or is it wrong to be anti? I'm confused. Is Israel somehow the moral equivalent of apartheid-era South Africa? I've heard some people suggest this but none of them were Republicans.

  • leninsmummy||

    Democrats like to be anti Israel, because their white(ish) western presence in an ocean of oppressed brown(ish) people mirrors the struggle of the proletariat to throw off the chains of western white religious oppression.

  • ||

    And yet Democrats continue to get the Jewish vote.

    In the immortal words of Richard Nixon, "Fuck the Jews, they never vote for us anyway." :)

  • ||

    Interesting that maybe Buttplug thinks that Israel may be the moral equivalent of apartheid-era South Africa. Tell me, Shriek, are some of your best friends Jews?

  • damikesc||

    Farrakhan is a scumbag.

    Maybe he and Little can get together and persecute some Jews.

    Let me know when Farrakhan gets 30% of Dem vote like Little did with the GOP.

    Does the #2 man in the RNC hang out with Little?

    Because the #2 man in the DNC hangs out with Farrakhan.

  • damikesc||

    You mean when the party basically runs nobody, anybody can claim to be a member?

    I can throw Alvin Greene in your face, if you'd like.

  • KevinP||

    Thank you, President Trump!

  • leninsmummy||

    Saying the right thing is only the first step. Hopefully words will be followed by actions.

  • Entelechy||

    Good to know that Pharma can afford to pay whatever the market will bear to encourage homilies such as this.

  • leninsmummy||

    Don't forget to boycott 'big pharma' next time you need medicine.

  • Sevo||

    "Good to know that Pharma can afford to pay whatever the market will bear to encourage homilies such as this."
    Yes it it, since that's what's used to develop the next med. Like leninsmummy, I suggest you eat some tree bark next time you're sick; it's cheap, and you deserve it.

  • jerbigge||

    Note that "right to try" could be expanded as a way to shorten the length of time before the FDA "approves" a drug. Also note that we have examples of drugs which were approved by the FDA that later were withdrawn from the market as the drugs were found to be less safe than thought.

  • jonnysage||

    I don't really understand why we treat drugs different than other products regarding price. If you can't afford it you cant have it. Same as anything else. Want to live forever get rich.

  • John B. Egan||

    If 'free market capitalism' is what Donald thinks would force drug prices down, then how about we stop blocking our US taxpaying citizens from using that 'free market capitalism' right to purchase of the same drugs we buy here at 20% of the cost we pay ... from Germany, Britain, Canada, etc? A lady friend was paying $340 a month for her Symbicort asthma inhaler... until the Post Office caught us. We were buying 2 inhalers from Germany with shipping for $100 total.. Or $50 each.... Let's face it. We do not have free market capitaism in the US, we have a captive market that allows our buinesses to screw the citizenry for profit as if they were cows who are milked until they get too old or sickly and are then slaughtered to be used for dog food.

  • Kreel Sarloo||

    Well, while it is not an legitimate reason to stop people from shopping this way, there is, in fact, significant evidence of widespread fraud in the "Canadian Pharmacy" racket.

    Contrary to popular myth, Canadians are not the universally nice people that they (and a lot of Americans*) want you to believe they are. Crime statistics show this.

    *of course, a lot of Americans believe that Canadians are hardy pioneer stock who live in igloos without indoor plumbing and drive dogsleds on their daily commute.

  • Kreel Sarloo||

    Still, "caveat emptor" and all that. All I know is that I'm not going to be getting my blood pressure meds from "Joe's Friendly Canadian Pharmacy" any time soon.

  • Sevo||

    John B. Egan|5.11.18 @ 8:19PM|#
    "If 'free market capitalism' is what Donald thinks would force drug prices down, then how about we stop blocking our US taxpaying citizens from using that 'free market capitalism' right to purchase of the same drugs we buy here at 20% of the cost we pay ... from Germany, Britain, Canada, etc?"

    Because those prices in those countries are mandated by those governments, which, I hasten to add, is not 'free market' by any means whatsoever. And I have no doubt you purposely conflated the issues, right?

  • BILKER||

    amen sevo. drugs in Mexico and Canada are much less in price than here in the US. so much so that one could afford them without insurance covering much of the cost.

  • Devastator||

    Trouble is he didn't take the wheels off, he just opened up the markets a little more. This may help a little bit, but until Medicare can negotiate prices and you can buy your shit from Canada/Mexico/China easily it's going to remain an oligarchy of a few players colluding and setting the crazy prices since they have a stranglehold on the market.

  • pro bonobo||

    Colchicine, a naturally occurring chemical found in the Autumn Crocus, has been known and used medicinally for about 3000 years. Today its main use is for the relief of pain and inflammation of gout.

    About a decade ago a tablet cost less than a dime, but a company managed to snag a patent after doing research on dosages at the behest of the FDA... and the drug is now about $5 a tablet. Sole sourced. The patent has since been sold to an offshore company and they are raking in profits.

    I found this out after being diagnosed with gout a year ago and I am pissed off. Nothing else works as well.

    Highway robbery.

  • Mark22||

    Highway robbery.

    No, it's a textbook example of how "market mechanisms" used by the government often amount to regulatory subsidies.

    Safety and efficacy studies on colchicine were probably a good thing to do. The three options were: (1) have a public institution do the study, (2) have a private company do the study in return for a monopoly, or (3) have companies in the market do and publish the study without government intervention.

    (1) looks bad on the US government's books, since it requires spending tax dollars.

    (3) is not possible because it would require the FDA to give up control over drug evaluations and approvals

    So it chose (2), which is the least efficient option: instead of a tax, you pay highly inflated prices, and most people don't even realize that this is happening.

    The same crap happens with "free market proposals" like congestion pricing or other public-private partnerships: they are inefficient, hidden taxes. The only efficient solution is (3); for that, the FDA would have to give up control and turn from a regulatory agency into a certification agency, but that's not going to happen.

  • pro bonobo||

    Yes on all counts.

    It also remains highway robbery.

    Benjamin Franklin is said to have been growing Autumn Crocus for relief of his gout which at times was disabling... I can only imagine how many Americans might be doing this now, risking overdose of what is a toxic brew, but unable to pay the $300 a month it can now cost for a daily prophylactic dose, over the $6 a month for the same amount before the dealings of the FDA.

  • pro bonobo||

    Yes on all counts.

    It also remains highway robbery.

    Benjamin Franklin is said to have been growing Autumn Crocus for relief of his gout which at times was disabling... I can only imagine how many Americans might be doing this now, risking overdose of what is a toxic brew, but unable to pay the $300 a month it can now cost for a daily prophylactic dose, over the $6 a month for the same amount before the dealings of the FDA.

  • Joe Emenaker||

    "(1) looks bad on the US government's books, since it requires spending tax dollars"... except that it would be saving a portion of the citizenry (according to "pro bonobo") up to $300/mo.

  • Mark22||

    but higher prices abroad is no incentive for companies to lower prices at home beyond what competition in the marketplace will force.

    That's not correct, for a several reasons. First, the drug market is a non-equilibrium market with changing conditions and price setting is largely about risk minimization, not profit maximization. Second, foreign prices are set by private entities negotiating with governmental monopsonies pursuing political aims, not a market that creates economically optimal outcomes. Third, higher revenue opportunities abroad will attract new entrants into the market, increasing competition and lowering prices.

    Overall, higher prices abroad may well result in lower prices domestically, even though simple introductory textbook economics might make you think otherwise.

  • nicmart||

    God forbid Reason should advocate drug freedom as an end to prescription drug laws. The libertarian movement has become utterly think-tanked, eschewing principled defenses of liberty.

  • nicmart||

    God forbid Reason should advocate drug freedom as an end to prescription drug laws. The libertarian movement has become utterly think-tanked, eschewing principled defenses of liberty.

  • Joe Emenaker||

    "The best way to change prices, therefore, is to change the markets. Imposing price controls would lower prices, but at the cost of ... developing fewer new drugs"

    The author seems to think that there's something magic about a company being forced to take less money for their product because of *competition* and because of *regulation*. Regardless of the cause, if pharma is reaping reduced profit for a drug, they: 1) have less capital to invest in new drug research, and 2) less *incentive* to invest in new drug research because they can't hope to profit as much from each new one (so they're going to stick to cheap-to-develop/large-market projects).

    I'm not arguing that we need to keep throwing all of our money into pharma's coffers. I'm just pointing out that the author is being a little hypocritical in enumerating all of the negative results of price-fixing and then omitting that competition will have some of the *same* negative results. It would be more intellectually honest to just mention the effects which are *different* between them.

  • BILKER||

    "Brand name companies get 18 years of patent exclusivity, and that is enough." this statement is the main detriment to costs. it should be no longer than 5 years.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online