Consumers Want Government to Limit Rx Prices
By George Anderson
A telephone poll of 1,200 adults conducted by the nonprofit health research organization, The Kaiser Family Foundation, found that nearly two out of every three questioned believe
the federal government should be more involved in keeping down the prices of prescription medicines.
Less than half, 46 percent, said they would support further government regulation of pricing even if it meant pharmaceutical companies had to reduce their research and development
activities.
Half of those surveyed said they take one or more prescription drugs on a daily basis.
Moderator’s Comment: Should drug retailers support greater government involvement in limiting the prices charged for prescription medicines? Why or why
not?
A report by Reuters pointed out the federal Medicare program is prohibited by law from negotiating prices with drug makers even though other agencies
within the government are allowed. –
George Anderson – Moderator
People mostly do not want the government involved in pricing. But when they perceive markets behaving in apparently irrational, unfair ways, they are willing for the government to try to make sense of it for them. Prescription pricing is an example. Why should I be able to buy the exact same item from Canada for less? The fact that government is responsible for that irrationality doesn’t keep us from turning to the problem creator for the solution. (And of course, it is government that issues patents – an absolutely vital part of prosperity – see: Birth of Plenty.)
Similar problems occur with the oil industry, airlines, etc. The market serves us with small ballot boxes, where we can vote a dollar at a time. When we find this inadequate, we turn to the large ballot boxes of governmental elections. In either case, it is about having choices. And our only hope in both cases is that someone rich enough and powerful enough will provide us with the choice that WE want (in return for our dollars or votes). The internet has lowered drastically the price of entry into either “election” which bodes well for our future choices. But it’s always messy, lurching from one power/market configuration to another.
At some point, the voters of this country are going to have to decide whether they consider health care a right or a good. There are a variety of models along that continuum, but we haven’t even made up our minds yet about how to approach the debate. We get surveys like this that show a strong desire for more government involvement, but health care plans that allow for government regulated health care provisions are shot down as “socialized medicine.”
I think there are a lot of tactics for increasing competition and loosening markets that should be tried before we slap another Band-Aid on a broken system.
The only way to offset the drug companies’ over the top profits is to own shares of their stock. I certainly don’t have a problem with any company being profitable but it bothers me more in this case because of the amount of profit and the fact that it is something that people must have. People that can’t afford insurance are really caught in a jam and are forced in many cases to have to choose between drugs that they need or other necessities of life.
Canada and European countries that implemented price controls on drugs have further exacerbated the problem. It looks like we need to do the same thing and thereby force the drug companies to do a better job of justifying their prices and costs, and spreading drug costs more equitably. It seems like we are paying a disproportionate share and will continue to as long as the present system stays in place.
Concerning drug retailers, they would be hurt by lower drug prices just like the manufacturers would be and so have no incentive to push for lower prices other than PR reasons.
It seems to me that one indicator of a desperate situation is to look for the arbiter of last resort (the government) to fix things. And, as medical costs eat up more and more of personal income, this is becoming a desperate situation.
Of course, we should want drug companies to continue to invest in finding new solutions and we need them to be able to recover the cost of their discovery and also profit from it. We just do not want everyone to profit too much.
My opinion is that we all should support more scrutiny and review. Certainly from ourselves, but also from the government.
No, I think drug prices are pretty reasonable – especially generics. Let the market of supply and demand set the price, not the government. The government could do a few things a little differently. First, open up the borders so we can re-import US made drugs purchased from foreign countries. Let the US and State governments negotiate with drug companies or suppliers for the best deals, either in the USA or foreign. The insurance companies tell us what doctor to go to because they negotiate prices with those doctors. The insurance companies need to make deals with the drug companies or suppliers to get special deals too. Some already have with special mail order pharmacies. Limit liability for drug companies when they get sued. The government could reduce patent time limits similar to what other countries have. Finally, get over the fear of foreign drugs. We are over the fear of imported food, like bananas and orange juice, so why not drugs too?
I have a doctor’s appointment today. I always hit her up for a sack load of free samples so I don’t have to waste my money and the insurance company’s money at the drug store.
While I understand – and generally share – a natural reticence to have too much of life controlled by government, there comes a time when regulations are needed because voluntary behaviour is out of order. With no ceiling on the prices that can be charged for drugs, there is little or no reason for manufacturers to consider what customers can and can’t afford. Assuming that all medications prescribed by doctors are actually essential to patients’ health, the term “needs must” has to apply. People don’t actually have the choice about whether or not to make a purchase. Nor is it reasonable for manufacturers to assume that what individuals can’t afford will be underwritten by insurance companies (who will, of course, ensure that they get their money back from individuals come hell or high water through increased premiums and penalties). Under those circumstances, it is incumbent on manufacturers and retailers to price things reasonably. As this isn’t always the case, though, some external force needs to be brought to bear.
I prefer the solution so ably outlined by David Livingston, which allows the marketplace to dictate prices rather than the government. Currently there are so many impediments to wide-open commerce in prescriptions that the U.S. pharmaceutical industry essentially operates a monopoly.
Open up your history books and look back about 30 years or so. At that time, a guy tried that (price controls, that is) and it was a miserable failure. It would also be a miserable failure now and itt would add more corruption to an already corrupted industry – if that is possible.