To get bet­ter pric­ing, ad­dress drug mar­ket

Northwest Arkansas Democrat-Gazette - - EDITORIAL PAGE -

Pres­i­dent Trump re­cently pro­posed set­ting Medi­care Part B drug prices on an in­dex of prices out­side the US. He in ef­fect is propos­ing price con­trols. His­tory is lit­tered with failed at­tempts to con­trol mar­ket prices by set­ting them ar­ti­fi­cially while ig­nor­ing the sup­ply and de­mand curve that al­lowed the mar­ket price to ex­ist in the first place. A bet­ter so­lu­tion would be to ad­dress the mar­ket it­self.

First, all gov­ern­men­tal drug pur­chases, whether Medi­care, Med­i­caid, VA, or oth­ers, should re­quire uni­fied col­lec­tive pur­chas­ing for prices from the drug com­pa­nies. This is banned un­der cur­rent law. The law should also be changed to al­low in­sur­ance com­pa­nies to ne­go­ti­ate lower process based on the higher ag­gre­gated vol­ume of their com­bined de­mand. Th­ese changes would strengthen the de­mand side of the sup­ply and de­mand equa­tion and lower prices.

Sec­ond, the drug com­pa­nies should be for­bid­den from ad­ver­tis­ing di­rectly to con­sumers. Drug com­pa­nies are cur­rently spend­ing mil­lions of dol­lars to ef­fec­tively con­vert con­sumers into sales peo­ple press­ing doc­tors for the ad­ver­tised drugs. This in turn in­flates de­mand which in­creases prices.

Drug com­pa­nies and their lob­by­ists would fight th­ese changes tooth and nail. The cur­rent sit­u­a­tion ben­e­fits them greatly but at the ex­pense of ev­ery drug pur­chaser within the US. This needs to be changed. Price con­trols as pro­posed will not work. CHUCK HAUN Garfield

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