Trump’s Excellent Plan to Reduce Drug Prices

[Right_in_Virginia]

Trump’s Excellent Plan to Reduce Drug Prices
The American Spectator, May 14, 2018, David Catron

The President takes action on an issue that was ignored by his predecessor.

Last Friday, President Trump caused consternation among Democrats and their media allies by introducing an eminently sensible blueprint for reducing drug prices. The 50-point “American Patients First” plan addresses four broad challenges: High list prices for drugs, government programs overpaying for drugs, rising out-of-pocket costs for consumers, and foreign governments free-riding off American innovation. The blueprint relies on free market competition and private-sector negotiation rather than regulatory coercion and price controls. And, assuming his plan works as designed, President Trump will have succeeded where his predecessor proved utterly impotent. Consequently, the plan drew immediate criticism from the left.

The most common liberal complaint about the President’s blueprint involves his decision, as the New York Times laments, “not to have the federal government directly negotiate lower drug prices for Medicare.” Trump alarmed conservatives during his presidential campaign by flirting with that exceptionally bad policy idea, but sensibly abandoned it when working with his advisors to formulate a concrete plan. The term “negotiate” has no real meaning in the context of federal dealings with the drug industry. It is nothing more than a pseudonym for price controls. Allowing the government to “negotiate” with drug companies for lower Medicare drug prices would inevitably create shortages of badly needed pharmaceuticals.

That drug shortages would result from allowing Medicare to negotiate directly with drug companies is not a matter of speculation. We already have a huge federal bureaucracy that “negotiates” prices with drug companies — the Veterans Health Administration. And the results have been all too predictable. According to a study by Avalere, the VHA covers 16 percent fewer drugs than does Medicare Part D. Many of the medications not covered by the VHA are common generics. Not coincidentally, generic drugs figure prominently in Trump’s drug plan, which would increase industry competition by accelerating the speed with which such medications reach the market. On Friday, FDA commissioner Scott Gottlieb put it as follows:


Read more:  https://spectator.org/trumps-excellent-plan-to-reduce-drug-prices/