Jim Edwards at BNET pulls together a lot of interesting pieces to the puzzle in terms of rising drug prices, concluding that two major factors may be that A) some patients can’t negotiate their drug prices given life or death circumstances and B) Medicare isn’t allowed to bargain down prices.
BNET Pharma: Drug prices rose 9.3 per cent a year, according to a study by the AARP. The House Commerce subcommittee is holding hearings into why drug prices seem only to go up, and never down.
Sure, some patients can negotiate drug prices. A patient with the flu ought to be pretty sensitive to the difference in price between TheraFlu and Robitussin. But one of the biggest buyers of drugs — Medicare — is currently forbidden from negotiating prices.
Now you can see why drug companies are so careful to develop rationales for drug price increases. They’re living in a Shangri-La of ever-rising prices, facing customers who are too sick or forbidden by law from negotiating, and the justification for it is that their drugs all have above-average effectiveness.
So then let’s take a jaunt over to the October 30th Wall Street Journal:
WSJ: When Congress added prescription drug coverage to Medicare a few years back, the drug industry won a huge victory: The new law barred the federal government from negotiating on the prices Medicare pays for prescription drugs.
The big House health-care bill that landed yesterday would reverse that, and give the HHS secretary the authority to haggle for a better deal.
Healthcare reform is obviously an extremely complicated subject with a lot of moving pieces. Yet the Republicans are being disingenuous when they present themselves as the defenders of free and efficient healthcare markets.
By preventing healthcare reform, they are actually helping to prolong a huge regulatory inefficiency in Medicare which they themselves orchestrated not too long ago. So it’s not that simple. Doing nothing means we’re stuck with the current regulatory system — it doesn’t mean we don’t have any regulations. Healthcare is massively regulated as it stands. Thus inaction is to continue with massive, broken regulation. Which should be fixed.