Issues

Due to its national implications, last week’s introduction of the Department of Health and Human Services’ (HHS) blueprint on drug prices is garnering all the attention. Despite its importance, HHS’ blueprint should not overshadow the many poor, and even unconstitutional, policy proposals that are occurring at the state level. For example, Maryland passed a drug-price-gouging law in 2017 that empowered the Attorney General (AG) to take legal action against generic drug companies if the AG judged these price increases to be...

Last Friday, President Trump delivered a major speech from the White House Rose Garden on prescription drug prices. He announced several policies aimed at reducing the overall cost of pharmaceuticals and limiting patients’ out-of-pocket expenses. His reform agenda, entitled “American Patients First,” is largely excellent. It mostly harnesses the power of free-market competition, rather than government price controls, to drive down costs for patients while continuing to incentivize drug manufacturers to invest in innovative, lifesaving research. Contrary to popular belief, drug spending...

Health care is becoming less affordable every year. Over the past 10 years, national healthcare expenditures have grown 45 percent, but our economy has grown only 28 percent. This isn’t sustainable; and, solving this problem should be a top policy priority. However, “rounding up the usual suspects,” as Captain Renault might suggest, will not make U.S. health care system more affordable. One of the usual suspects is drug costs. Polling shows the American public blames pharmaceutical companies for high healthcare prices, perhaps...

A U.S. district court in Montana just imposed a $34 million fine on Canada Drugs, an online pharmacy charged with selling counterfeit medications to unsuspecting Americans. Some of the drugs contained no active ingredients. Canada Drugs isn’t the only online pharmacy that puts patients’ lives in serious jeopardy. The National Association of Boards of Pharmacy recently examined more than 11,000 online pharmacies and found that 96 percent were operating illegally. Many of these sites claim to be Canadian. But they often have no...

Patients could save time and money if federal law is reformed to allow pharmacists to administer all CDC recommended vaccines. Right now, pharmacists are subject to a patchwork of laws in each state that are effectively barriers to vaccines being administered at neighborhood pharmacies. This access barrier exists even though pharmacists receive vaccination training in their pharmacy school education....

Expenditures on prescription drugs grew 12.4 percent in 2014 and 8.9 percent in 2015. These eye-popping data are not representative of the long-term expenditure trend, however. Not only did the growth in prescription drugs expenditures slow to 1.3 percent in 2016, longer-term (between 2009 and 2016), the average annual growth in pharmaceutical expenditures was 3.8 percent while the average annual growth in health care expenditure was a faster 4.2 percent. Obviously, if the growth in pharmaceutical expenditures is less than the growth...

Striking the right regulatory balance for pharmaceuticals is no easy task. On the one hand, policy should promote drug affordability by encouraging robust competition. On the other hand, policy should encourage future innovations by granting these drugs temporary market exclusivity. While these goals appear contradictory, the federal government’s drug approval process has reasonably balanced these competing interests for many years. This approval process is based on legislation passed in 1984 colloquially known as the Hatch-Waxman Act. One of the primary goals of...

Congress has undermined the Medicare drug benefit that millions of older Americans depend on – one of the few federal health care programs that's working well. The two-year federal budget deal passed recently shifts more of the program's costs onto drug manufacturers starting in 2020. In the process, the change eliminates one of the key features that has made the program – known as Part D – successful for over a decade. If the change stays in place, Part D could soon...

When it comes to the U.S. health insurance market, the adage about communist economics is apropos. In this instance, instead of being “they pretend to pay us, we pretend to work”, it is “they pretend to sell insurance, we pretend to buy it”. What we call health insurance in the U.S. is not insurance at all. In its simplest form, insurance is a financial transaction where an insurance company bears the financial risks associated with an unwanted event in return for...

During Tuesday's State of the Union address, President Trump pledged to drive down drug prices. That's a worthy goal. And fortunately, the Trump administration is already pursuing it in a way that protects patients and encourages research and development. Many of the strategies that candidate Trump proposed on the campaign trail would have done more harm than good. Candidate Trump often agreed with Hillary Clinton and Sen. Bernie Sanders on drug prices. They all wanted to repeal Medicare Part D's "non-interference clause,"...

Once again, budget negotiators in Washington D.C. are scrambling to put together a cogent spending plan for the federal government. And, once again, as part of this last-minute scramble, Congress is considering ad-hoc budget gimmicks to pay for spending instead of budgeting within the government’s affordability constraint. Or, as President Reagan might have said, “there they go again”. Employing budgetary gimmicks and pay-fors is one of the many reasons the federal government’s fiscal spending is out of control, and many problems...

According to the five-second rule, you can still eat your food that has fallen on the floor, so long as you picked it up within five seconds. Only, this common perception is bad advice. In reality, if a person eats food that has fallen on a dirty floor, he risks getting sick because it only takes milliseconds for bacteria to contaminate it. The five-second rule is a myth. The myth of the five-second rule exemplifies how common perceptions can often lead to...

The Trump administration recently announced a $1.6 billion cut to the badly abused "340B" program, which forces pharmaceutical companies to sell medicines to hospitals that treat significant numbers of poor patients at steep discounts. A bipartisan group of senators -- including supposed fiscal hawks like Sens. John Thune, R-S.D., and Rob Portman, R-Ohio -- are trying to block the reform. That's disappointing. Hospitals are exploiting 340B to enrich themselves at the expense of poor patients. Their abuse of the program drives up...

Tomorrow, the Senate Health, Education, Labor & Pensions Committee (HELP) will discuss a proposed alteration to Medicare. The proposal comes from a report released in late November by the National Academies of Sciences, Engineering, and Medicine. NASEM urges Congress to allow federal bureaucrats to negotiate Medicare drug prices directly with pharmaceutical companies. Currently, private insurance companies conduct these negotiations. The academies believe the federal government could use its bulk purchasing power to obtain lower drug prices for Medicare beneficiaries. NASEM is wrong. Giving the government negotiating authority would stifle...

President Trump's nomination of Alex Azar for secretary of Health and Human Services is encouraging news for free-market health reformers. Azar possesses precisely the combination of legal acumen, bureaucratic savvy, management experience dealing with a large workforce, and private-sector experience required to eliminate those parts of Obamacare that can be accomplished through administrative action. Azar's conservative legal credentials are impressive. He clerked for the late Supreme Court Justice Antonin Scalia. This alone suggests a healthy aversion to federal overreach — a welcome trait for a...

Abraham Kaplan famously noted that if you, “give a small boy a hammer, he will find that everything he encounters needs pounding.” Put differently, solving problems requires the right tool, not the convenient tool. Congress should remember this wisdom in its upcoming deliberations regarding the cost of prescription drugs. The convenient tool when it comes to the health care system’s affordability problem is price controls. After all, the government can limit price increases in any part of the health care system...

The U.S. health care system needs systemic reforms that comprehensively address the problems of declining quality and rising costs. Alas, beneficial systemic reforms will not be implemented any time soon. There are still opportunities for Congress to implement tailored reforms that can help address these problems in the near term. One such opportunity is reforming the out-of-control 340B drug pricing program (the federal drug discount program created under the Veterans Health Care Act of 1992). The intent of the 340B program...

Imagine a pharmaceutical market designed by Lewis Carroll’s Mad Hatter. In contrast to almost every other market, he might begin by charging wholesale prices that are higher than retail prices. He would then make sure that the higher wholesale price goes, the lower retail prices can become. And finally, he would ensure that not everyone could purchase their medicines at the low retail prices – although the reason why would be convoluted and random. While we can be certain that the...

Effective health care reforms must reduce the excessive costs imposed by frivolous lawsuits. Studies have shown that medical tort reform could reduce total health care premiums between 1 and 3 percent. As estimated by the American Action Forum, this could mean “roughly $15 billion” in savings from effective (but partial) medical tort reform. Given the desperate need to bend the health care cost curve, implementing medical tort reforms that rein in over-zealous lawyers should be a no-brainer. But then again, this...