Reducing Taxes and Regulations Trumps Price Controls
Trump's strategy to lower Rx drug spending.
The regulatory burden on the drug industry has grown out of hand. While much regulation is necessary, the process is out of control and smothering the industry.
As President Trump investigates ways to reduce Rx drug spending incurred by Medicaid, Medicare, and government bureaucrats, three elements that constitute a major segment of the market, he has asked drug manufacturers to help reduce drug costs by spreading research and development costs globally. Politically, this is a good move. Realistically, though, it may not be, since such price controls have a long history of not working. Clearly, something must be done.
Much of our current regulation is necessary. However, those who support easing restrictions on drug importation fail to realize the risks involved. Fewer restrictions on importation could open the floodgates to contaminated, untested, adulterated, and misbranded drugs.
Pharmacists and the FDA have more than 100 years’ experience in safeguarding America’s drug supply. The importance of restricting importation of drugs was dramatically demonstrated in the case of thalidomide in 1959.
The full and accurate disclosure required of publicly traded drug companies stands in contrast to the conduct of government agencies that frequently obfuscate information provided to their shareholders—the taxpayers. Company directors are subject to lawsuits for malfeasance or inaccurate reporting. But members of Congress have granted themselves and many bureaucrats sovereign immunity from possible legal actions taken by voters.
Some believe overregulation of the drug industry has created unnecessary barriers to entry for new companies, and created or protected drug company monopolies. While regulations necessary for safety must be maintained, those that mainly limit competition should, in my opinion, be revisited.
The political-medical complex
Today, most physicians are employed by large health-care systems run by overpaid executives who use vast revenues to purchase legislative power. They have created the political-medical complex, which makes up one-sixth of the gross national product.
Contrary to what direct-to-consumer health-care marketing may suggest, the best amount of health care is the least amount necessary. The healthiest people take no medications and usually have no need of hospitalization.
Because the corporate masters of health-care systems are usually not health-care providers, they fear any effort to reduce patient spending. To them, overutilization is not a bad word; it is an essential component in their business plan. Physicians and pharmacists who try to restrict patient consumption of services and drugs run the risk of being punished for reducing corporate income when they should be compensated for limiting unnecessary treatment.
Patients will benefit from reducing their use of drugs and services and be healthier and financially better off, but this change is antithetical to those who profit wildly now. Breaking this corporate addiction to excessive profit and the benefits of being awash in cash will require the repeal of numerous provisions in U.S. Code and the Code of Federal Regulations.
President Trump is uniquely positioned to bring major changes to health care and the health-care insurance industries. But he is already under attack from the left, the mainstream media, and the Democratic Party. If he is to succeed in reducing health-care costs, he will need additional support from patients, and their employers. Making the necessary changes will improve the nation’s health and its economy.