Yes. You don't? For example, do you think that government should not be able to negotiate Medicare prescription drug prices? If so, why?
Yes, I think they should not be able to negotiate drug prices. Does the government buy and sell drugs? Does the government buy and sell cars?
I don't think the government should be in the medicare business, period. Since they have been, since 1965, the cost of healthcare has risen disproportionately to other items.
If the government negotiates drug prices it is all of a sudden even more deeply and intimately involved in our lives. Once it is involved in price setting, which is what that is all about no matter the guise, it then distorts the free market. It also establishes itself more deeply into the healthcare provider industry, just one small step away from national healthcare. If they are handling something so large as the drug benefits for seniors, why not let them administer it all?
As I understand it, that was the plum promised Ross Perot for his help in splitting the Republican vote in 1992, that his company, Perot Systems, would administer a large portion of the nations healthcare programs (Hillarycare). Who will get that plum if this passes? Perot, again, or someone new?
Anytime government gets involved costs go up, not down. Providers have to navigate intricate paper work designed to document services provided and to eliminate cheating, which like most government rules and regulations only inconvenience the honest rather than stopping the dishonest. That increases the cost to the government and to the provider so the provider must raise prices. The taxpayer pays it.
Without all that, health services and health insurance, and the availability of both, would be cheaper and more varied and available.
Show me where it allows that in the Constitution and I'll be all for it.
For an answer, let's turn to public choice theory.
Let's say the first pill cost a pharmaceutical company 300 million dollars to make and each subsequent pill costs 50 cents. We can quibble about the exact dollar amounts, but the larger point is that the pharmaceutical industry has huge fixed costs and low variable costs.
Let's say we have a medicine that is taken almost exclusively by senior citizens. Now that we have prescription drugs paid for by Medicare, the result is that the government is essentially a single buyer.
Let's say we have a drug that has been on the market a few years. A senator wants to show that he cares about senior citizens. He demands that the company sell it for a dollar a pill.
The company still covers its variable costs by doing so, so it would continue to provide the same amount of pills in the marketplace. Senior citizens win for now. The government pays far less than it otherwise would.
The pharmaceutical company realizes, however, that it's a waste of money to do research on future products for the elderly, as the government is just going to force it to be sold for a low price. Ten years later, no new pills are coming on the market.
By this point, the senator is safely retired.
Countries all over the world have demanded that pharmaceutical companies sell their products at rates that don't cover the fixed costs. Do you think our politicians are too noble and farsighted to do so? Just like politicians everywhere else, our politicians are concerned with winning the next election. Therefore, we need to throw restraints on what they can or can't do. Having government pay market rates for drugs is one good restraint.