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Subsidies and Price Controls Aren't the Answer to Skyrocketing Prescription Drug Prices

Prescription drugs are getting more and more expensive thanks to the needlessly complex interplay of intellectual property, public funding, and FDA regulation.

MICHAEL CRABTREE / MEGAMICHAEL CRABTREE / MEGAAt a dinner with business leaders last Tuesday, President Donald Trump promised to do "something" to get drug prices "down really substantially," reports Reuters.

But what, exactly? This isn't the first time the president has threatened to shake up the complex world of prescription drug pricing. And even though policy details aren't really his forte, Trump seems to favor the use of government coercion rather than market forces. Trump railed against Big Pharma, accusing them of "getting away with murder" during his 2016 campaign. More recently, he browbeat Pfizer into reversing some of their drug price increases and released a rather ambiguous "blueprint" to bring down drug prices.

Despite what the president would have you believe, the problem of high drug prices is not one with a simple solution. Subsidies and price controls, options that Trump seems to favor, could slow innovation and hamper progress in the industry. If Trump really wanted to bring down drug prices, that "something" must address the problems of government overreach, including the public funding of prescription drugs, drug patents, and the web of regulation engendered by the Food and Drug Administration—a combination of factors affecting both the supply and demand sides of the equation.

On the demand side, Medicare and Medicaid artificially increase demand for drugs by using tax dollars to subsidize consumption. That enables large pharmaceutical companies to raise their prices without suffering any meaningful decrease in their sales. Medicare Part D, for instance, was enacted in 2003 to help seniors afford prescription drugs, but it has actually trigged the opposite effect. A report from the American Association of Retired Persons, a senior citizens interest group, surveyed 528 medications many older adults take daily and found that "the average retail price was $12,951 in 2015, more than three times the average price for such drugs in 2006."

"Medicare part D has opened the floodgates for higher prescription prices," says Mark Thornton, a senior fellow at the Mises Institute and an expert on drug regulation. "The prices for cancer drugs are simply outrageous, but the government continues to pay despite no guarantee they will work."

In addition, these programs aren't cheap. In 2016, we spent $672.1 billion on Medicare and $565.5 billion on Medicaid, but healthcare and pharmaceutical costs remain stubbornly high, and are increasing.

The Trump administration's blueprint endorses price "negotiation" through these federal programs, but this is nothing more than government price controls. These controls might lead to lower prices, but they would almost certainly cause pharmaceutical companies to scale back their research into drug development. As Reason's Ronald Bailey discussed back in January, "If price controls pressure the U.S. industry into a more conventional process industry model, like that of the chemical industry, pharmaceutical R&D budgets would be slashed."

Another problem is the drug patent system, which was conceived to ensure the welfare of American consumers, but now seems to advantage large pharmaceutical companies. Because drug companies are given the opportunity to monopolize drug markets and charge exorbitantly high prices, they are able to freeze out competition that might drag prices down.

"If a manufacturer of acetaminophen, for example, wanted to charge a thousand dollars a tablet, they wouldn't sell any tablets," says Gilbert Berdine, associate professor of internal medicine at Texas Tech and a faculty affiliate with Texas Tech's Free Market Institute. "It would be pointless for them to do that, because a competitor would capture the entire market by underpricing them."

The White House, however, seems to recognize the issue of extended patents. "Lower-cost drugs are kept out of the market by drug companies gaming regulatory processes and the patent system in order to unfairly maintain monopolies," reads the administration's proposal. Serious patent reform would require congressional action, but Trump is right to urge the House and Senate to work on legislation to roll back the arcane patent laws that dominate the pharmaceutical industry.

Drug companies will argue that patents incentivize investment. That's true. By disproportionately increasing the rewards for producing specific goods, the government essentially offers a subsidy of sorts to drug companies, which certainly boosts production. However, this subsidy, like all others, transfers investment from productive sectors of the economy to the pharmaceutical industry, who don't have to fear the consequences of competition that control other industries.

"There have been pharmaceutical developments long before there were patents and there would continue to be pharmaceutical developments in the absence of patents," Berdine says.

Atop this milieu of subsidies, the government restricts supply with a smorgasbord of regulations, mostly promulgated by the FDA, that restricts competition and stymies the discovery process of the market.

"The FDA hampers innovation by requiring extensive and expensive testing," continues Thornton, "There are tons of drugs and devices that work and would be at low prices and would definitely save and improve lives, but they are unavailable because of the FDA."

Trump's FDA Commissioner, Scott Gottlieb, has gained a reputation for his relatively speedy drug approvals, but that doesn't address the underlying cause of having a massive, bureaucratic agency dedicated to limiting competition in the industry. According to the BrightFocus Foundation, a non-profit focused on supporting medical research, the costs for trials demanded by the FDA can cost hundreds of millions of dollars. This serves as a formidable barrier of entry to startup drug companies looking to introduce potentially life-saving drugs to the marketplace. Massive pharmaceutical companies can afford these regulations, but smaller competitors cannot. This dynamic expands the monopolization of pharmaceutical giants, who can dragoon consumers and insurance companies into paying heavily amplified prices.

Skeptics of laissez-faire are quick to point out the possibility of dangerous drugs being released in the absence of an all-powerful regulatory agency. The FDA's litany of rules might stop some bad drugs from reaching consumers, but the discipline of the market is a far more effective regulator than a gang of Washington bureaucrats.

"Dangerous drugs that hurt or killed people would lead to lawsuits, not to mention the loss of good will. Ineffective drugs might hang around via the placebo effect, but would probably be competed away in the long run," argues Thornton.

Trump seems to have a strong penchant for economic deregulation, and if he were to apply this to the pharmaceutical industry, he just might be able to make real progress on an issue that's stumped many an administration before his.

"The market is a beautiful thing," says Berdine, "one layer of regulation after another is not going to fix the problems created by the previous layer of regulation."

Photo Credit: MICHAEL CRABTREE / MEGA

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  • Vernon Depner||

    Outlaw direct-to-consumer advertising of prescription drugs. Like it used to be.

  • Sevo||

    "Outlaw direct-to-consumer advertising of prescription drugs. Like it used to be."

    Sarc, right?

  • Vernon Depner||

    Wrong. The idea behind restricting drugs to sale by prescription is that only a physician is competent to decide which of these drugs a patient needs. The patients themselves are considered not competent to do so. Given that, it makes no sense to allow direct consumer advertising of prescription drugs. The wide-open prescription drug advertising we see today has only been allowed since 1992. Since then, the cost of advertising and marketing drugs to consumers has skyrocketed, with marketing expenses in many cases exceeding the cost of developing a drug.


    Brief history of drug advertising

  • Sevo||

    Fuck off, slaver.

  • Vernon Depner||

    No, thank you.

    The non-"slaver" approach would be to eliminate the requirement for prescriptions. Requiring prescriptions AND allowing direct advertising at the same time is nonsensical.

  • Sevo||

    A-1 has something to say about your BS.
    Sorry, I don't want information hidden from me by slavers like you.

  • Vernon Depner||

    You equate advertising with informing. I'm sure the ad men would be deeply touched.

  • Sevo||

    "You equate advertising with informing. I'm sure the ad men would be deeply touched."

    You are obviously stupid enough to think there is a difference. I'm sure your logic instructor would be appalled.

  • Unicorn Abattoir||

    In the sense that the advertising brings the drug to your attention, it is informing. You are not subordinate to your doctor, and have every right to weigh in on treatment options.

  • MichaelL||

    Patient/doctor partnership? I was told that was a terrible way to practice...in the late '80-s! Funny how things change, but stay the same! But, I have to say that the fast speaking advertisers are not the group that I would put my trust in. But, the doctor/patients relationship has taken a big hit recently. The pain management doctors can give us an earful. They might have "government" officials come in and take the patients charts, if they do not like the medicine you are prescribing. (What about HIPPA??!?!) It is amazing how medical professionals, who have never seen the patient, can make better decisions, about the patients' medical care, than their own doctors. I am glad that I don't swim with those sharks any more! So much for the doctor/patient relationship!

  • MichaelL||

    Vernon,

    Isn't that why they are required to put the disclaiming drug information, in the form of a fast speaking spiel, at the end of the advertisements? They are required to do it, by law. But, as long as they follow the letter of the law...and not the spirit! I, fully, expect this is just the beginning of the end for our personal control of the physician/patient relationship. Medicine by committee is stupid! The drug reps hated me! I wrote for generics whenever the patient did not demand otherwise. I, personally, use all generics and get by with a third of the amount that I would have spent on my prescriptions, plus paying for the insurance ($700/yr as opposed to $2300/yr!). I dropped the part D!

  • Sevo||

    Well, goody for you!
    I haven't met an MD in many years who would prescribe 'name brands' once they fell off patent. And once they do, the prices ten to compete to the mean pretty rapidly.
    Patting yourself on the back with such enthusiasm might cause a broken arm; you'd better be careful.

  • Echospinner||

    When selecting a doctor for primary care and ongoing issues. Best thing in my experience is look for grey hairs. The docs who have more years tend to treat with proven methods which are less costly or risky.

    The thing is a lot of it is trial and error. You want someone who has made enough error to know what works.

  • buybuydandavis||

    The idea behind restricting drugs to sale by prescription is profit for the medical mafia.

    Health care is cheap.
    Government enabled rent seeking is expensive.

  • chemjeff radical individualist||

    What's wrong with more informed patients, even if they don't have the authority to buy the product directly?

  • Vernon Depner||

    Calling what drug advertisements do "informing" is ludicrous.

  • Sevo||

    Vernon Depner|8.17.18 @ 1:58PM|#
    "Calling what drug advertisements do "informing" is ludicrous."

    OK, ignoramus, here's the deal:
    You draft up a first shot of a law prohibiting what, in you abysmal stupidity, you don't want to see, while not running afoul of A-1 and allowing what you, in your abysmal stupidity, would allow the public to see and post it here.
    I'll check back here from time to time, but, since you are full of shit, I'm guessing I'll never see a thing.
    Fuck off, slaver.

  • Sevo||

    Still waiting.....

  • jrd||

    Sev, you go, girl!

  • Sevo||

    jrd|8.17.18 @ 9:38PM|#
    "Sev, you go, girl!"

    Dunno if you are serious or not, but those who claim 'libertarian', *but* only want to limit what I can read or watch by some reasonable....
    I stop reading at the "but"; it means they think they are so much smarter than those who might read X that they are willing to take up arms to enforce their views.
    Hey, VD, fuck off, slaver.

  • Sevo||

    VD, still waiting...

  • Qsl||

    It's... complex.

    Prior, you had direct "advertisements" to doctors direct from pharmaceutical companies wishing to promote their products (it still survives somewhat today via presentations from drug company sponsored studies complete with dinner), but that was considered poor form and ripe for abuse. As an industry, it has been pretty much eliminated as a practice, but now you have all those advertising dollars with no place to go. What to do, what to do...

    So now the practice is to market directly to the public at large, but as you notice with the "ask your doctor" blurbs in every ad along with a list of common side effects, drug interactions, etc. there is a fair amount more to consider than whether said drug will treat said symptoms. That's not quite as clear cut as "more informed patients", but closer to partially informed patients who will still require guidance from a MD, pharmacist, etc. just to determine safety, let alone efficacy. It's not like pharmaceutical companies are just listing relevant studies for people to read.

    So now you have the libertarian tendency of free to choose butting up against medicine's ethics of informed choice where people are kind of caught in the middle.

  • Vernon Depner||

    So, there is another adult in the room.

  • Sevo||

    Vernon Depner|8.18.18 @ 1:25AM|#
    "So, there is another adult in the room."

    Yes, and it ain't you. Still waiting, twit.

  • Sevo||

    "but now you have all those advertising dollars with no place to go. What to do, what to do..."
    Bullshit. Those dollars would go to the bottom line, unless it was felt they'd do better elsewhere.

    "So now the practice is to market directly to the public at large, but as you notice with the "ask your doctor" blurbs in every ad along with a list of common side effects, drug interactions, etc. there is a fair amount more to consider than whether said drug will treat said symptoms. That's not quite as clear cut as "more informed patients", but closer to partially informed patients who will still require guidance from a MD, pharmacist, etc. just to determine safety, let alone efficacy. It's not like pharmaceutical companies are just listing relevant studies for people to read."
    OK, and?

    "So now you have the libertarian tendency of free to choose butting up against medicine's ethics of informed choice where people are kind of caught in the middle."
    WIH is that supposed to mean?

  • Unicorn Abattoir||

    It's not informed choice if you don't know every treatment option available. Again, nobody is subordinate to their doctor.

    I own me. My doctor does not. To suggest that information should be cloistered within a profession under the assumption that your doctor will know everything and should be deciding your fate for you is unsat to me. It's not informed consent, and it's sure as hell not ethical.

  • Qsl||

    Does that include every risk with a treatment, and do you think that can be adequately conveyed in 30 second spot on tv? Also, I am unaware that a Physician's Desk Reference was only made available to medical professionals, or does all of your medical advice come only from advertisements?

    Likewise, medical professionals own their professional liability, and as every treatment option available could include anything from contemplating your navel in a vat of lukewarm urine to aligning your chakras, there are concerns. As it is, there was that unfortunate faux pas when inserting an ice pick through an eye socket and doing your Furtwangler impression was strongly advocated for; it might have been more ethical just to leave it alone no matter how fervently it was pushed. And how dare medical science keep such a treatment option from you and your loved ones!

    More practically, until you earn your medical degree yourself, you will always be subordinate to a doctor's knowledge base (one would presume that is why you are seeking their professional opinion in the first place).

  • Unicorn Abattoir||

    you will always be subordinate to a doctor's knowledge base

    Not what I said, and you know it.

  • Qsl||

    Then here is your opportunity to clarify, keeping in mind your are always free to refuse a treatment or seek another opinion.

  • Sevo||

    Qsl|8.18.18 @ 9:26PM|#
    "Then here is your opportunity to clarify, keeping in mind your are always free to refuse a treatment or seek another opinion."

    And I'm still waiting for you do correct your baffelgab, per my post above.

  • Unicorn Abattoir||

    There's no need to clarify. You know that's not what i said, and adding "knowledge base" to my statement was a deliberate obfuscation.

    Now answer Sevo.

  • Sevo||

    We're not going to get a (non-bafflegab) answer.
    Qsl ("It's...complex) is trying to justify the 'Doctor is Omniscient' model, and the only way to do so is by claiming the 'complexity' is so profound only he and his anointed cadre are qualified to make such judgements.
    Well:
    "Courtesy Liz Moench
    Liz Moench thought it was obvious. During her job interview with Boots Pharmaceuticals in 1981, at its Shreveport, La., offices, the 23-year-old Moench asked company president John Bryer to describe the drug maker's main customers.
    "Doctors," Bryer said.
    Moench was surprised. "Why isn't it the consumer?"
    She got the job, and the rest is history. On May 19, 1983, Boots aired the first broadcast television commercial in the United States for a prescription drug, the pain reliever Rufen."

    Liz (who should be a heroine) nailed only one to the door, but that tired shit Qsl (along with VD and the random Myk) get to hand over the bibles for the rest of us to read.

  • Sevo||

    But that approach is working so well to make rental property cheap in San Francisco (among other places)

  • I'm Not Sure||

    Why not just outlaw disease and injury?

  • Sevo||

    OT, but we may end up finding out more about Tesla than we really want to know, like the CEO's a junkie:

    "Tesla Tumbles After Tearful Musk Tells NYT Nobody Reviewed Tweet"
    [...]
    "...Musk also detailed his frequent use of the sleep-aid Ambien -- a drug he's discussed using before, and whose well-known side effects include sleepwalking...."
    (Your fave Bloomberg reseller)

  • Brian||

    Sigh. Now he has his "get real" moment?

    Sad.

  • buybuydandavis||

    "sleeptweeting"

  • Sevo||

    butt-dialing - I get at least one dead call per week from wife...

  • Brian||

    Let anyone buy any drug without a prescription.

    Giving government/doctors a monopoly on who gets to have what drugs is just a bad as banning abortion.

    If you don't agree, fuck off.

  • Vernon Depner||

    I could get on board with that, with the exception of antibiotics. With those, there's an environmental issue that affects everyone, not just the user.

  • Sevo||

    "I could get on board with that, with the exception of antibiotics. With those, there's an environmental issue that affects everyone, not just the user."

    Yeah, since the government regulations have done such a wonderful job of preventing that, right, ignoramus?
    Fuck off, slaver.

  • JeremyR||

    It illustrates a problem though. If everyone used antibiotics, then after a while they wouldn't work anymore, things would grow a resistance to it.

  • Sevo||

    JeremyR|8.18.18 @ 12:47AM|#
    "It illustrates a problem though. If everyone used antibiotics, then after a while they wouldn't work anymore, things would grow a resistance to it."

    To use the old quote: "Utopia isn't an option".
    I agree that some people will misuse anything offered to them, but I think you'll notice that government control of antibiotics hasn't been successful in preventing the evolution of resistant strains.
    And, to pick but one more obvious example of the proficiency of Top Men, by limiting the use of DDT, the UN has pretty much guaranteed the development of 'resistant' mosquito strains, causing some millions of deaths since its restricted use in 1972:
    "There are an estimated 216 million cases of malaria each year around the world, and about 655,000 deaths due to malaria."
    http://www.malaria.com/questions/malaria-death-3
    Let's say that's a constant rate: 46 years X 655K = ~30 million. Aren't you thrilled the Top Men are looking out for our welfare?

  • EscherEnigma||

    To use the old quote: "Utopia isn't an option".


    … do you not see the irony of using this quote to support your demand for "Utopia" (in this case, completely deregulated free market for drugs)?

    Utopia isn't an option.

  • buybuydandavis||

    I'm fine the exception on antibiotics.

  • buybuydandavis||

    Bingo!

    The only place you can find libertarianism at Reason is in the comments section.

    End the government enabled rent seeking of the medical mafia.

  • Overt||

    Our "All you can eat Buffet" style of Healthcare funding is a mess.

    An acquaintance's 2 y/o daughter was flagged as "Potentially Autistic". Now note that this is a kid who can barely speak. They flagged her by observing her reactions to people doing stuff- how long her attention was held and that sort of thing. Now he is taking his daughter to therapy sessions, and getting referrals to specialists. All because there is a SMALL chance of autism. In just the last four months he has racked up over $30,000 in costs.

    My first daughter had a bad cold back in 2008. It meant several nights of her waking up at night coughing and crying until our doctor told us to just give her some children's benadryl to help her sleep through the night. Flash forward 5 years and my son had the exact same problem. This time, the doctor prescribed albuteral treatments, using a rented nebulizer mask that we had to strap to his face (to an 18m/o this was basically water boarding). After two days, we had enough torturing our son that I called the doctor to ask if there was an alternative to the medication. The doctor told me that the albuteral was really just to make him more comfortable, and we could give him some benadryl to sleep through the night.

    Thousands and thousands of dollars wasted on "comfort", or to reduce a tiny, tiny amount of risk when there are far more cost effective regimes available- or even no necessary treatment at all. And this is because no one ever has to be cost conscious.

  • Unicorn Abattoir||

    Since when is autism diagnosed at 24 months????

  • Echospinner||

    Do you think it is a simple matter to diagnose and treat a young child with a cough?

  • Hamster of Doom||

    The Stabilization Act of 1942 has a lot of explaining to do. It's almost as if every political intervention has the opposite effect it states on the tin.

  • librich||

    It is impossible to critique any particular element of the prescription drug world in America, because the system has been jiggered so many different ways by the government. Example: government subsides were instituted to provide incentives to develop new antibiotics BECAUSE the government had made developing new antibiotics a losing proposition by restricting the marketing window and requiring the drugs become genericized. If you eliminate the subsidies, we'll go back to having no new antibiotics. Once a society has embraced the idea that the government should fix whatever is broken, you create a snarl that can't be easily untangled.

    This problem exists in many business sectors. Net Neutrality, for example, is government interference. But the interference is designed to remedy the government's cronyist support for the cable and landline duopolies. Once the government has radically limited competition in the broadband circuit world, you need Net Neutrality to prevent the duopolies from crushing smaller content providers.

    Libertarian critiques are regularly off-base because the commentator is unfamiliar with a landscape of prior misguided government intrusions which the new intrusion is meant to correct.

  • Saorla||

    Drug companies aren't interested in manufacturing new antibiotics because people who take them get better. Drugs that cure things are nowhere near as profitable as drugs that mask your symptoms, which you will have to take for the rest of your life. If they manufactured cures for illnesses, like diabetes for example, they'd lose a multibillion dollar a year industry. I am pro- free market, but this is one area where free market incentives simply do not work.

  • Sevo||

    Saorla|8.17.18 @ 7:32PM|#
    "...I am pro- free market, but..."

    Fuck off slaver, you are nothing of the sort.

  • Myk||

    As I've explained, YOU are the slaver, Sevo. That is who you support by calling the real slaves, slavers.
    I gather from your well thought out replies to the topic you're just their useful idiot.

  • Hamster of Doom||

    Oh, he's just cranky sometimes. Don't mind it too much, as far as our bad habits go, 'cranky' doesn't even make the top 10.

    Also, let's talk definitions. I'm having trouble squaring government control of the means of production and distribution with a free market. We're told what we may buy, from whom we may purchase it, who is allowed to manufacture it, and what we're allowed to do with it after we've bought it.

    In 1500 characters or less, I'd like to know why that's a free market to you.

  • Vernon Depner||

    Oh, he's just cranky sometimes.

    Puberty does that to everyone.

  • Sevo||

    Did puberty make you stupid, or are you a per-pubecnet imbecile?

  • Sevo||

    You're right, HoD, I *DO* get cranky when dealing with imbeciles who think it's just ducky for the government to withhold information from me. It's a 'failure' of mine.
    And I notice the imbecile Myk has somehow not found a way to answer your request.
    VD's right; there are at least two adults in the room. Neither VD, nor Myk, nor Qsl qualify.

  • Hamster of Doom||

    I don't think it's a failure, Sevo. Maybe more like a quirk. Personally, I've got a near-crippling case of Resting Bitch Voice, so imma try not to judge. Shine on.

  • Sevo||

    Myk|8.18.18 @ 12:54AM|#
    "As I've explained, YOU are the slaver, Sevo."

    Fuck off, slaver.

  • Sevo||

    Myk|8.18.18 @ 12:54AM|#
    "As I've explained, YOU are the slaver, Sevo. That is who you support by calling the real slaves, slavers.
    I gather from your well thought out replies to the topic you're just their useful idiot."

    Unlike VD, who somehow can't respond to a request he defend his claim, YOU, as a fucking ignoramus, deserve a bit more of an answer.
    You've "explained" nothing whatsoever. You seem to suggest that by my pointing out the idiocy of VD's bullshit, I have become a 'useful idiot'.
    You are either ignorant of the meaning or mis-applying it; I'm guessing both.
    So: Fuck off, slaver.
    Oh, and VD? If you are to make such claims, either support them of admit you are a fucking ignoramus. In short, grow up.

  • John B. Egan||

    The answer to high drug prices is very simple... But with our donor-based Congress, unlikely. Just allow US citizens the right to buy the very same drugs made here , by the same manufacturers from Canada, Britain, etc. The consumers would save 80% or more by removing the pathetically greed-induced law blocking Americans from enjoying that supposed revered 'capitalism' that allows a person to comparison shop. Viagra here is $65 a pill.. In Canadian pharmacies, $12. It's even cheaper if you buy them as generics. Life-saving Epipens, which have skyrocketed from $100 to $600 under our absurd corporate welfare system are available in Canada for $82.

  • Sevo||

    John B. Egan|8.17.18 @ 7:12PM|#
    'The answer to high drug prices is very simple... But with our donor-based Congress, unlikely. Just allow US citizens the right to buy the very same drugs made here , by the same manufacturers from Canada, Britain, etc."

    Did you study for stupid, or were you born that way?
    Anyone as the 'right' top buy meds at any price, but it takes a certain sort of stupid to presume the prices in Canada or Britain have anything to do with 'rights'.
    Those prices are government-mandated, in case you didn't know, and those of us paying market prices for those meds are subsidizing Canada and Britain, much as we are by supplying their defense.
    I'm tired of subsidizing the lazy bastards and tired or pointing out such obvious causes to idiots.

  • No Yards Penalty||

    You're not subsidizing us you fucking spastic retard. Go wash dishes and soak your head in the cold water afterwards. Fuck me you're tiresome. Worse than LC1789.

  • Sevo||

    No Yards Penalty|8.19.18 @ 1:31AM|#
    "You're not subsidizing us you fucking spastic retard."

    Imbecilic assertion proposing to be argument.
    Yes, you fucking ignoramus, all of us paying full price are subsidizing assholes like you.
    Stuff it up your ass.

  • jerbigge||

    Repealing prescription laws is one good way to reduce prices. You can end up spending as much as $250 (doctor office visit, lab tests) to be able to legally buy the same drug you've been taking before at Walmart for $10 for a 90 day supply.

    This is one reason why our health care costs are so high. Most common chronic conditions can be medicated, but not cured as such. People can live for decades with these conditions and going by my own experience, waste about $500 a year getting prescriptions for the same medications they've taking for the last decade or more. Prescriptions that might only cost someone $40 a year, but require paying $500 a year for the privilege of spending $40 at Walmart.

  • buybuydandavis||

    So any people calling for the actual libertarian solution of more patient freedom!

    Yay!

  • Fmontyr||

    There is an unholy alliance between Pharma and government regulators (patent system included) which is the cause of our outrageous drug prices. Lobbyists ensure that change will not happen. The public is screwed!

  • Spookk||

    What a load of crap. Of course price controls would help. They work fine in other parts of the world. You could also nationalize research and health care, then put money into those things instead of pointless wars, huge military expenditures, etc. Fuck the private pharma industries.

  • Sevo||

    Spookk|8.17.18 @ 11:19PM|#
    "What a load of crap. Of course price controls would help. They work fine in other parts of the world. You could also nationalize research and health care, then put money into those things instead of pointless wars, huge military expenditures, etc. Fuck the private pharma industries."

    What a pile of shit.
    Fuck off, slaver. You think we haven't read your bullshit many times? You think you're offering some magic which hasn't be pitched by assholes like you forever.
    Stuff it UP YOUR ASS!

  • Unicorn Abattoir||

    Price controls would do nothing but make R&D money go to other fields, and would drive companies to eliminate less profitable products.

    Want to lower costs?

    Improve the approval process at FDA. I'd prefer to see it go away and replaced by private review agencies. Don't think it can work? Tell it to Underwriters Laboratories.

    Allow de-facto approval of drugs if another 1st world country's review agency approves it. UK/France/Japan, whoever.

    Repeal the Bayh-Dole Act.

  • buybuydandavis||

    Nice to see an article at Reason taking a little whack at the government enabled rent seeking of the medical mafia.

    But if we want to talk *free* markets, how about patients being free to purchase medicine and medical service from whomever they damn well please?

  • Echospinner||

    OK.

    You walk into wal mart.

    They have a blood pressure thing. You read out 180/110 with heart rate of 102.

    What do you prefer. Beta blocker we have eight of them to choose from, alpha blockers, angiotensin II receptor agonists, HCTZ, loop diuretics, which would you like. Just buy it from the person at the checkout.

    Is that what you are proposing?

  • turco||

    "They have a blood pressure thing. You read out 180/110 with heart rate of 102..what you are propsing?"

    I would ask an online expert with good reviews, and pay him $25 for the "consultation" .
    Or I can go physically to someone with a medical degree, and ask him which one I need and pay him $100 for the consultation.
    Or drive to a local charity clinic , wait in a long line , and ask them .
    Or research it online because I have some medical knowledge and realize a heart rate of 102 is too fast and maybe I need an EKG to figure out if I have an arryhthmia, unless I was running into walmart or I am terribly out of shape.

    Point is , I should have the choice. In an affluent society, *most* people would pick the medical doctor option. It should not be government imposed, however.

  • Sevo||

    turco|8.19.18 @ 3:15PM|#

    "They have a blood pressure thing. You read out 180/110 with heart rate of 102..what you are propsing?"

    I would ask an online expert with good reviews, and pay him $25 for the "consultation" .
    Or[...]
    Point is , I should have the choice. In an affluent society, *most* people would pick the medical doctor option. It should not be government imposed, however.

    I thinks we have a thread winner!

  • Unicorn Abattoir||

    That's not what he's proposing, but I will. You could do all the things turco just listed, or yes, make your own decision and assume the risk that comes with it.

  • turco||

    Before Medicare Part D came along, there was a large population of cost-conscious shoppers. Since Medicare D , the demand increased because it is now subsidized. Pharmaceuticals can now get away with charging more ( and pharmacies marking up higher) since Medicare is paying. Instead of a generic drug maker charging 50 cents per pill to sell more, they are better off putting on a high sticker price ( say $10 per pill), and then negotiating a discount with a Medicare D plan to sell it for $2. Sure they lose sales from patients outside that plan, but they make it up by gouging up the plan members.
    If all pharma companies do this , they all benefit. An outsider can easily undercut such a cartel scheme, except that regulations present a high barrier to entry. Once you clear those barriers, you might as well join in the cartel behavior.

    THis is a market failure. Caused by government regulations, as usual.

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  • EscherEnigma||

    Do you know what would really rein in prescription prices?

    If you outlawed prescription drug coverage, along with any coupons, rewards programs, or any other third-party intermediary that would soften the blow. Sure, we'd be right back to "do I buy food, or my prescription meds", but knocking out the consumer-side subsidies means that the only way any of that crap gets bought is if it's affordable at sticker-price.

    Though I suppose the real question would be: do insurance companies reduce their premiums as they no longer cover prescriptions, or do they keep jacking up insurance rates anyway? I'd bet on the latter, but it's a moot point as the scenario will never happen anyway.

  • guyjones||

    There is no magic panacea to the issue of high drug prices, at least, not on the pharmaceutical company end. And, as per usual, the "solutions" being offered by the Dumb-o-crats are predictably infantile and foolish, reflecting fiscal illiteracy & a profound lack of understanding regarding drug development.

    There are unavoidable & unalterable costs involved in drug research, testing and manufacturing. Let's start with the axiom that around 90% or so of all pharmaceutical compounds that are tested by pharmaceutical companies will fail at some point in the drug development pipeline, mostly for lack of efficacy, unacceptable toxicity, or some related issue. These companies are testing tens of thousands of compounds to treat a given ailment, to find the one compound that has the right mixture of efficacy, low/absent toxicity, good bioavailability, etc. We're talking about Ph.D-level chemists and biologists -- exceptionally bright and brilliant people. Finding and developing these compounds takes years, plus, considerable time and money. Then, once some attractive candidate compounds are discovered, they have to be tested, extensively -- first with animals, then, with human clinical trials. This takes additional years, plus even more money. And, of course, while all of this is going on, regulatory paperwork is being submitted to the appropriate government regulatory bodies, intellectual property efforts are undertaken to protect discoveries and inventions -- more time and money.

  • guyjones||

    By the time a successful drug compound is finally brought to market, we are talking about roughly twelve to fifteen years of development, plus, anywhere from $500 million to $1 billion spent by the drug company, before one pill is even sold. The up-front costs are gigantic. And, frankly, this entire process of drug discovery and innovation is entirely unappreciated by most patients, and, certainly by most politicians of the Dumb-o-crat persuasion. Drug costs are reflecting not only the enormous costs of drug discovery and testing, but, also, the costs of the 90% of candidates that, for whatever reason, did not make it through the development pipeline.

    Nobody can do what the pharmaceutical companies are doing, and, no company is going to spend billions of dollars on drug development costs if they aren't going to be allowed to make a decent return on their investment, and, if their intellectual property isn't going to be protected. There would be no incentive whatsoever to swallow the development costs, without exclusivity rights that are patent-protected for a certain number of years, before generic variants are allowed to hit the market.

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