To get better pricing, address drug market
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