Years ago in a residency ethics seminar, a classmate was arguing for government production and distribution of common, generic drugs. I pointed out that doing so was not only an improper role of government, but that it would lead to scarcities and higher prices for newer, potentially better drugs for non-government patients. The leftist classmate reiterated that most people didn’t need the most advanced or newest therapeutics, whereupon an ally quipped, “Oh, so you want second-class drugs for second class patients.” The leftist called us both Nazis, which is what lefties do when people are too slow to open their wallets.
Years after that, I was in D.C. (fighting my urge to go all Jubal Early on that swamp) lobbying with the AAPS against the enactment of Medicare Part-D, aka W’s “Free Drugs for Old Peoples’ Votes” program. We argued to now-Georgia governor/then-Rep. Nathan Deal (Ga.-R) that it was not only inappropriate to use taxpayer money for meds, but that it would lead to significant price increases, and blow holes in a budget that now seems laughably benign. Rep. Deal told us that we were wrong, that we could not expect to provide deserving seniors Medicare without ensuring they could pay for the meds prescribed them by their kindly government-funded doctors.
So after being called names by a moonbeam and schooled on healthcare economics by a politician, what have we? The AP is wondering aloud if government involvement has allowed, and even encouraged drug makers to jack up their prices. The latest straw dog to beat is Mylan CEO Heather Bresch who okayed the gouging of EpiPen prices because, well, she could. For those of you who think I’m saying anything nice about this utterly corrupt woman, you can read my previous criticisms HERE. But when Congress gets into the market and Obama signs a bill providing “free” EpiPens to schools, then the daughter of one of his political allies is bound to see an opportunity for some PR cover. Hey, she’s a scorpion, and scorpions only do one thing.
Medicare Part-D has invited more drug sales, and the new taxpayer money flooding the industry led to price increases, and the development of newer, pricier drugs that Fred and Ethel just gotta have. Sen. Chuck Grassley of (R-Ia) said, “When companies are allowed to manipulate public programs, consumers and taxpayers lose out,” and he ought to know. In 2003, Uncle Sugar ladled out $1.2 billion for powered wheelchairs and scooters, and was shown to have been fraudulently billed in the hundreds of millions. Finance Committee Chairman Grassley responded to this fiscal gaffe by requesting that CMS “Provide a crosswalk from the 49 codes released on February 2005 to the 63 codes released on September 14, 2005.”
From the article: “Fundamentally, we disagree that there is not adequate cost containment for medicines built into Part D, or the ACA,” said Lisa Joldersma, vice president of policy and research with the Pharmaceutical Research and Manufacturers of America. We think the market is best able to manage the holistic picture and to strike the right balance across cost containment, access and continuous innovation,” she added.
Then why do you need government cash and tax shelters Ms. Joldersma? Her answer of course is that without those taxpayer supports, prices would be that much higher. We U.S. voters have created an amazing vortex of crony corporatism whereupon, by the government providing things as rights, those things only get more expensive, with worse price flights and shortages guaranteed if that which increases prices is withdrawn. Give that equation to your local college administrator or teacher union boss, and watch them wink and smile.
The article includes that Rep. Xavier Becerra (D-Ca) doesn’t blame either Bush or Obama for their big government expansions, but still thinks Congress should act. And do what, but make things worse still? The article notes that Obama extended protections of certain drugs from generic competition to 12 years. Cal me a hard-ass, but I still don’t get why drug patents ever expire. Why should a Beatles song still retain its copyright, but not Augmentin? And if drugs kept their patents intact, wouldn’t their profits extend longer, making government subsidies harder to justify? Of course the government would have less influence on drug-makers and drug-takers, so …
This entire perversion under the false flag of “market forces” is so bad, so pervasive, so emotionally guarded, that I’m reduced to agreeing with and Urban Institute economist in the article’s final quote, by Eugene Steuerle: “Government simply cannot provide monopoly power and at the same time say that it will pay a price set in the private market by those companies. Turning the power of the purse over to monopolists is absurd.” He’s got that right.