Comments Elsewhere

Mangu-Ward:

This means lower profits in the short term, less R&D in the long term.

Maybe so. If so, so what? The government’s duty is not to maximize the amount of new pharmaceutical research going on in the world. It’s to get the hell out of the way and let individual drug-makers and drug-takers bargain freely over how much the new drugs are worth to them. Which would require, among other things, that the government not ban all competition for 20 years, or indefinitely ban efforts at arbitrage through buying drugs in foreign markets.

Noisewater:

In this instance, I believe that “allowing the government to negotiate bulk discounts” should be called by it’s better known name — a price control.

… as opposed to the government using taxes to buy up ~100% of the supply of a particular drug at the price set by drug companies for a now effectively non-existant retail market. Which we should call, what, market pricing?

In reality, whenever the government buys nearly all of a particular good, using tax dollars without any individualized control by the people forced to pay them, any price whatsoever that the government pays for the good will effectively be a price control. This is true whether the government allows itself to “negotiate” with the sellers or passively takes whatever prices they name. The only solution is to stop having the government do all the buying, not to substitute a higher price-controlled price for a lower one.