Isn’t it funny (not funny ha ha) that our government is the only one who is never to blame for price increases or shortages of any kind. It’s always Big Oil, the military industrial complex, etc. Or in this case, evil Big Pharma. We can’t name one industry that doesn’t get blamed for these occurrences (except of course, Big Education), yet the government, with its penchant for artificially picking winners and losers, escapes all scrutiny. We’re about to see it happen again. And when it has the opposite effect, we’ll all be instructed to once again blame “Big Pharma.”
from Human Events:
“Cold” Medicine: Canadian Drug Imports Will Cost Americans
The solution to drug prices is ending freeriding, not buying Canadian
In the hopes of lowering the cost of prescription drugs for Americans, the Trump Administration announced plans in late July to draft a proposal for the importation and sale of prescription drugs from Canada. The announcement was overshadowed by House Speaker Nancy Pelosi’s drug pricing bill and the bipartisan package before the Senate in September—but is a cause for concern, nonetheless. A dozen states, Congress—even the Trump Administration, despite initial opposition—are now considering such legislation.
If “buy-Canadian” doesn’t sound like a policy consistent with Trump’s platform of putting Americans first, that’s because it isn’t. Importing drugs from Canada is an ineffectual and counterproductive policy. President Trump had it right the first time. The prohibitive drug prices that Americans deal with are not solely caused by pharmaceutical companies; they are primarily the product of a failure of government policy.
Instead of artificial fixes, the Trump Administration should directly address the global freeloading and regulatory glut that’s costing Americans—both in dollars and lives.
Pharmaceuticals abroad are much cheaper than in the United States. In the U.K., the same prescription medications are, on average, three times cheaper than they are here. In 2019, 3,400 drugs in the U.S. have seen yearly price increases at an average rate of 10.5%—around five times more than the inflation rate. 40 drugs increased in price by more than 100%. To make matters worse, a recent survey by the Kaiser Family Foundation reports that nearly a quarter of Americans have difficulty affording their prescriptions..
Politicians and the media often blame the high cost of drugs on “price gouging” by U.S. pharmaceutical companies. Dan Rodricks, a columnist for the Baltimore Sun, hurled this very accusation at Alex Azar (now U.S. Secretary of Health and Human Services), saying he acted in “greed” when he was President of Lilly USA and oversaw the price increase of Humalog, a diabetes treatment, from $123 to $255 a vial. But this facile narrative misses is how prices work in a free market.
All companies operate to make a profit. Pharmaceutical companies live and die by their research and development (R&D) departments, which they use for both new products they bring to market and attracting investors to help fund future cures. Sellers do not arbitrarily set prices—if they did, they’d be outpriced by their competitors or would not see a return on investment on products that often take decades to produce. Pharma, like all industries, is beholden to the supply and demand of the free market.