President Biden: The NEW one and only politics thread

That "negotiate prices" or "bargain down prices" rhetoric is so dishonest.

What it really means is: price controls (the way the VA does it).

Which will lead to several outcomes, none of which the dishonest rhetoric ever acknowledges.

1) Medicare is a government entitlement program that has taken over a large segment of the market, and has pushed off much its considerable costs off on the part of the market that remains free, driving up costs for everyone else.
2) Putting that aside, let's say the government gets given a mandate to "negotiate" drug prices. What that really means is them putting price controls on drugs (the way the VA does it) and the drug companies having a choice: take what the government offers or don't do business with them.
3) All things being equal, the drug companies will want to work with the government, not the least of which will be the arbitrary threats of regulation if they don't bend over.
4) So on old drugs, where the marginal costs of producing more are low, they will agree and take less money. They will still earn money on those drugs. And Medicare will save money.
5) On any newer drugs (which are often better), though, where the marginal cost of each new pill is still very high, they will likely be MUCH less pliable. So those drugs will likely not be available to Medicare patients.
6) And because of the price controls, those companies will be forced to cut their R&D spending, which has made the U.S. the leader in new drugs and technologies that have done more to enhance our lives than probably anything. It will be significant. You don't invest the amount they do to develop new drugs, and take on the risk they do on those expenditures, when a huge government entitlement program is making it so you can't earn back that spending the way you currently do.
7) So "negotiating prices" can just as easily be framed as, "Save money by subervting the market to an even greater degree with price controls that make it so that Medicare recipients won't have access to many newer drugs, and because of those price controls, thwart future medical advances."

 

Imagine that. A business is "profit driven" [boogity, boogity]. Of course supply and demand "work." As much as gravity works. If I subvert the forces of gravity, say by putting a force on an object to keep it from falling due to gravity, it would be absurd to say that, "gravity doesn't work."

The reason insulin got so expensive was a regulatory environment that gave a government-inforced monopoly to three companies that were the only ones allowed to produce insulin, and whic hdidn't allow for new"biologic" versions or generic copycat versions of insulin that would be relatively cheap to produce -- but are largely still not allowed. That is starting to change, for example WalMart recently got approval to sell a much cheaper biologic version (the more reliable version than human insulin, which is what your grandmother was taking and isn't the same thing FWIW) of insulin, and *gasp* the price of insulin came down quite a bit (it allowed SUPPLY to meet the demand). If they would just get out of the way of companies that are very willing to produce and supply copycats to what is a big market, we wouldn't be having this discussion. It's so relatively easy that there are community labs that are part of an open-source project that are already producing unregulated insulin to serve diabetics.