Pharma Can’t ‘Bargain’ With a Medicare Monopsony

I was disappointed to read Paul Mulshine’s column advocating a change in the law allowing Medicare to negotiate prescription drug prices with private drug makers (The Medicare drug issue: ‘Conservatives’ who don’t want to bargain for better prices? No way). He criticized other conservatives for labeling such “bargaining” as price controls. But that is precisely what this would be--back-door price controls.

Mulshine did make the valid point that America doesn’t really have a functioning free market in drugs, and did advocate for free market reforms:

The genuinely conservative position on Medicare is to call for the entire program to be privatized so private insurance companies can make whatever deals they want with the drug companies.

But if we’re stuck subsidizing those drugs, the very least we can demand is that the government pay the lowest price possible to the drug companies.

It’s the “But if we’re stuck” phrase that stuck in my craw.

I left these comments:

Medicare is a monopsony--a legally protected exclusive buyer of drugs for the senior market. It is also part of an institution that determines what drugs can be sold--and that has regulatory, taxing, and prosecutorial powers through multiple agencies--not to mention Congress. What “bargaining” power can a private company have with Medicare, a part of the whole coercive federal establishment? “Take-it-or-leave-it” is no choice at all for a drug company “dealing” with a government monopsony.

The solution to the problems caused by creeping socialism and government interference is not more socialism and government interference. That’s how, after decades, we have gotten to the point that a movement openly advocating full, totalitarian socialism is gaining traction in America by arguing that the whole point of the growing welfare state was precisely that--undiluted totalitarian socialism.

The solution is not to “defend the current system.” It is to take a stand against socialism and government interference and in favor of reforms geared toward more individual freedom. Privatizing Medicare is a good place to start. That will take guts, and may cost an election. But it’s the right thing to do, and will at least offer voters an alternative vision and choice.

Related Reading:

Farmer's "All-American Socialism"

Blaming the Remaining Fragments of Healthcare Freedom for Problems Caused by Government

The Elephant ‘Suggests’ Free Market, Not Single Payer, Healthcare

Moral Health Care vs. Universal Health Care, by Lin Zinser and Paul Hsieh