Thursday, November 16, 2006

Plan for Cheaper Prescription Drugs

Prescription drug prices have gotten largely out of control. The current Medicare plan is a mess. Some say we should import drugs from Canada, that to me seems like pretty poor plan, quite frankly, particularly if offered by members of Congress. If we allow that and most people are buying drugs from Canada anyways, we might as well stop fretting about becoming socialists and put the same controls on drug prices that Canada has here in America. If you don't support price controls here, then you had better be buying your medicine full price here in the United States. So let's examine the situation. A good plan needs to face the facts.

First of all, pharmaceutical companies are quite frankly companies. In a free market society we cannot criticize the fact that a company is trying to make money, that's what companies do. It would be no better to do that than to ask you not to eat which you must do to live. If they didn't make a profit they would go bankrupt.

Second, pharmaceutical companies develop drugs, patent them, and then are able to sell them exclusively for so many years before the patent ends and generic drug companies come in and make the same drugs but sell them for cheaper. Now, its not the making of each pill that costs so much but the development costs. The companies have a few years to reap their development costs back and make a profit before their patent ends. This translates into high drug costs, so they claim.

Third, we need pharmaceutical companies to continue to develop better medicines. In order to do that they need lots of money, which must come from the consumers. The other alternative would be for the government to take over the development of drugs, the cost then being passed on through taxes instead of drug prices, and the chances of their being new drugs would be dramatically lessened.

My proposal is this. Why not give pharmaceutical companies the option of having longer patents on drugs in exchange for submitting to price controls on their drugs. Then, they can make the same amount of money off their drugs but spread out over more years. Do we really need to let parasitic generic drug companies come in and steal drugs from those who developed them and sell cheaply because they didn't incur development costs? My answer is no, not if we can get the companies holding the patents to charge less.

Now obviously, some method of determining how to set the prices of prescription drugs would be needed. I'll leave that for Congress and undoubtedly lobbyists to figure out. If a method couldn't be figured out then this plan will not work, since I would certainly not trust giving the drug companies longer patents without guarantees that they'd charge less. And we wouldn't force this upon them, they could choose to charge what they can get while they can and then have generic drug companies swoop in a few years, so its not socialist. But we would close the loopholes allowing drug companies to get more years out of their patents if they don't take the price control route.

This plan seems far better than buying the same drugs from other companies. It also seems better than just allowing people to negotiate prices. If I'm buying from prescription drugs, I don't want to feel like I'm in a bazaar bartering and haggling over my medicine. 'Just walk away, show them that you don't really need your heart medication. You can live without it, for a few days.' We'd be better off ensuring everyone gets the same affordable prices, instead of complicating things even further.


Anonymous Daniel Haszard said...

This comment has been removed by a blog administrator.

Thu Nov 16, 07:28:00 PM EST  
Anonymous Anonymous said...

I have some problems with your plan, and have written on them at some length on my blog. (You have no trackback feature.)

Your consideration of this issue, however, is laudable. Keep up the good work.


Tue Nov 21, 10:37:00 AM EST  
Blogger Gregarious said...

I didn't realize that generic drug companies had so much of the market share for drugs. That would probably mean they could lobby just as hard as the pharmeceutical companies that actually develop drugs, basically killing the idea if it were to ever get off the ground. As far as it being socialism I can definetely see your concern. That's why drug developers would get a choice to take longer patents with price controls, and not be coerced into it. If they were offered profits too low, then they could say no. Probably of more concern would be their lobbyists managing to obtain for them overall profits higher than now.

Tue Nov 21, 11:47:00 AM EST  
Blogger Gregarious said...

On Solificon's blog I found this interesting article,Pelosi on Drugs. It covers what's wrong with the Medicare being allowed to negotiate directly with drug companies over drug prices.

Tue Nov 21, 11:56:00 AM EST  

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