By: Marcus J. Hopkins, Blogger
Within the office of the President exists the Council of Economic Advisors (CEA) – a group of three advisors who, due to their unique training and expertise, are deemed qualified to analyze and interpret economic developments and advise the President of matters within that scope. The council consists of a chairman and two additional members, only the first of which must be confirmed by the Senate. The CEA, this month, released a White Paper (a government or authoritative report giving information or proposals on an issue) related to the topic of reducing prescription drug prices, and I have to say, as a patient advocate and someone who is pretty knowledgeable about prescription drugs and pricing, their response is entirely American in its analysis.
When it comes to pharmaceutical and biopharmaceutical drugs, Americans pay the highest prices in the world. The CEA report says that’s because the U.S. is paying the “market price” for drugs. Other developed countries who have the dreaded “single-payer” healthcare disease of which Republicans and Libertarians are so derisive institute government controls on pricing, forcing the poor, defenseless pharmaceutical giants (whose profits are measured in the billions) to comply with those controls in order to gain access to the market. The solution, the paper concludes, is to reduce “free-riding” abroad.
Did you get that? The key to reducing drug prices for Americans is to force other countries’ citizens to pay more for their drugs. Yes – rather than look at the American model of healthcare delivery and pricing (which virtually any person who’s ever looked at an itemized bill can attest is completely jacked), the CEA instead all but openly states, “Well, those other countries are just doing it wrong! Those silly Socialists and their insistence that healthcare be affordable just don’t know what they’re missing!”
The paper, which can be found here, contains lots of uniquely American concepts: the “Free Market” should dictate drug prices; because the rest of the world doesn’t have a Free Market, drug prices are artificially high; Medicaid and Medicare should stop requiring “best prices” and rebate minimums; we need more Pharmacy Benefit Mangers (PBMs) to enhance competition; make innovation more attractive through incentives.
These “solutions,” while certainly things that could reduce the cost of pharmaceutical products, rely almost entirely upon the cooperation of private companies whose main incentives are profits – profits that are already obscene. Moreover, Americans pay for 70% of patented biopharmaceutical profits, despite being only 34% of the Organization for Economic Co-Operations and Development (OECD) market. So, rather than look at our own system and say, “Jesus – we’ve got to follow the leads of these other, healthier countries,” the solutions provided by the CEA instead insist that we not only double-down on our Free Market Madness, but that we attempt to force smarter countries to comply with our lunacy.
Obviously, this is my take on the issue, which is informed by my experience as a healthcare consumer for life (thanks, AIDS) and as someone who has closely tracked pharmaceutical development and pricing for the past five years. While virtually every other developed nation in the world, and even developing nations, pay reasonable prices for pharmaceutical products, Americans get screwed, all in the name of the “Free Market.”
How is it that America went from the government developing some of the most effective vaccines and medicines in the entire world from the 1950s through the 1970s, and then, we just handed over the reins to private companies, while funding at least half of their R&D costs, only to have the drugs sold back to us at exponentially higher prices?
The answer isn’t that other countries are doing it wrong; it’s that we are idiots, when it comes to healthcare, and before long, we’re either going to be completely priced out of the market, or intelligent people will ditch our hackneyed healthcare system, and join the rest of the Modern World and go with Universal Healthcare.
- Council of Economic Advisors, The. (2018, February). Reforming Biopharmaceutical Pricing at Home and Abroad. Washington, DC: Executive Office of the President of the United States: The Council of Economic Advisors. Retrieved from: https://www.whitehouse.gov/wp-content/uploads/2017/11/CEA-Rx-White-Paper-Final2.pdf
Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.