OPINION:
Socialized health care in the United States comes by incrementalism, as if on little cat feet. Obamacare and its exchanges preserve the illusion of a free market for insurance coverage, but we’re inching ever closer to the left’s dream of “single-payer,” a system of one-size-fits-all medical treatment organized by the government. Price controls are the next step toward that goal.
Lawmakers and lobbyists turned green with envy Tuesday as drug maker Gilead Sciences Inc. announced that it had sold $2.8 billion worth of the drug called Sovaldi in the past quarter. This $84,000 drug cures Hepatitis C, a liver ailment responsible for about 15,000 deaths annually. It has one major side effect: It infects politicians with inside-the-Beltway banditry.
To date, this drug has treated 117,000 patients, with nine out of 10 patients reporting themselves cured for good. It sounds like a true miracle drug. A 12-week treatment at $84,000 is expensive, to be sure, but less so than the previous method of buying drugs to cover the symptoms over the course of a lifetime. Reps. Henry A. Waxman of California and Diana DeGette of Colorado, both Democrats, wrote earlier this year to House Energy and Commerce Chairman Fred Upton of Michigan, a Republican, to demand that Gilead Sciences Inc. be called before the congressional panel to justify the price of the drug.
“In March 2014, we wrote to Gilead to ask for a briefing on the high cost of Sovaldi,” they wrote. “The company provided this briefing, but did not provide a compelling justification for the high price they are charging for most patients in the United States.”
Since when do private companies need to explain such decisions to politicians? Since the imposition of Obamacare, obviously.
Rather than rejoice at the miracle of modern science conquering a particularly nasty disease, the company that sank billions into researching the cure is attacked with demands for price controls. The lobbying group America’s Health Insurance Plans doesn’t like such upfront cures, because insurance companies get stuck with much of the bill. If patients pay out for co-pays over the course of decades, insurance companies pay a lower percentage of the cost of treatment.
“Benefit design alone, however, cannot solve the challenge posed by the dramatic increase of prescription-drug prices that puts lifesaving cures out-of-reach for millions of Americans,” says the group’s spokesman. “Ultimately, that will require drugmakers to price their products at sustainable levels.”
Enacting price controls would create “sustainable” prices, but it’s a surefire method of closing the research laboratories hunting for groundbreaking treatments and cures. The spools of government red tape clog the process of the approval needed to bring a drug to market, which can require a decade’s time. Gilead last quarter paid a $337 million “branded prescription drug” fee under Obamacare, for example. Companies do this because a breakthrough typically produces a billion-dollar payout.
Liberals and others who flunked Economics 101 call this “price gouging” and demand that the government put a stop to it. Market competition will prevent actual gouging far more efficiently than the government can. Already, a shorter treatment for Hepatitis C has been effective in certain patients at a 30 percent discount.
When government decides what prices are just and reasonable, the companies with the best lobbyists and offering the most generous campaign contributions can expect to prosper. Cronies can’t produce cures, but they know how to extract the most cash from the pockets of patients and the government. An Obama administration that can’t set up a functioning Obamacare website for $1 billion isn’t likely to find cures for dandruff or hangnails, but it can get in the way of those who can cure serious disease.
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