Commentary

The Case Against Prescription Drug Price-Fixing
By Chuck Muth
When Congress passed the Medicare prescription drug bill in 2003, the intention was clearly for the program to be a competitive operation where private insurers and prescription drug sellers would be competing for business in a free market. Indeed the legislation specifically prohibits the Secretary of Health and Human Resources from “interfering” in negotiations between drug manufacturers and pharmacies, or instituting “a price structure for the reimbursement of covered” drugs. This free-market concept can be a little confusing to some people, so think of it this way: Requiring the HHS secretary to negotiate and set prices for prescription drugs would be akin to requiring the Secretary of Transportation to negotiate and fix prices for automobiles…