Hopefully this is just Charlie Rangle talking like he always does. But who knows. This could be a trial balloon.
What “controlling prescription drug prices” means no one knows. But “controlling” any prices is the stuff of economic ignorance. Prices should be free. When prices are free we can actually see what prices are telling us which is better for almost everyone.
What Rangle doesn’t say is that the reason many prescription prices are as high as they are is because of all the government which surrounds and permeates medicine. For instance it is estimated that it costs $1 billion to bring a drug to market largely because of our overly burdensome regs. This obviously impacts the price of drugs as the cost must be recouped (and hopefully more than recouped) when the medicine is finally brought to market.
And there are a million other examples of how government screws up healthcare and specifically (legal) drugs.
But these examples often are not easy to understand. It is much easier to talk about “controlling” drug prices than to talk about all the stuff that government does to mess things up in this part of healthcare. It’s particularly hard to discuss when you and your allies are the ones who instituted all the government regs.
No, much better to have even more regulation on top of all the other regulation. That makes sense.
We are not defending Big Pharma here. Anyone who reads us regularly knows that we have real issues with Pharma. Pharma and the government are to a large degree partners. But “price controls” are dangerous and frankly stupid. That a president would attempt to institute price controls in anything unilaterally is asinine and probably well beyond his authority anyway.
At a town hall in East Harlem, Mr. Rangel, a Democrat, expressed sympathy with a constituent who complained of the high cost of her medication. He blamed manufacturers, who he argued act as a cartel and artificially inflate prices, with the knowledge Medicare will pay whatever they ask.
“These people come together, they arbitrarily, unilaterally, set a price, and the price is based not on people’s ability to pay, but just how much money can they make off of the job? Knowing that in most cases, it’s the federal government’s paying for it,”*
Well then Mr. Rangle the obvious solution would be to remove the incentive for the drug companies which rely on Medicare as an endless pool of funds which exists outside of the market. It is that government is so involved that the prices of many of these drugs are so high – as you say. But you want yet more government? That’s just not smart.
“This president is going to take, use his executive powers, to deal with this thing as soon as he gets back. I’m sorry that he had trusted the Republicans for these seven years,” Mr. Rangel said. “And I’m sure glad that his back is against the wall, and he’s going to be swinging from the floor.”
Yeah, like the president is the good guy here. But hey, some people, many people, will buy it.
*”The government” isn’t paying for it. Taxpayers are.