If you take a step back from the daily news cycle, you start to notice that the big changes in American politics give ample warning signs for years before they become true.
Case in point: as former Massachusetts Gov. Mitt Romney (finally) admitted last month, “Without Romneycare, I don't think we would have Obamacare.”
In 2004, Romney thought a liberal, big-government health care plan would make good politics, something that was both symptomatic of, and exacerbated, the dismal job Republicans had been doing explaining how the free market could liberate the health care, industry making it cheaper and better.
Former Republican presidential nominee Mitt Romney introduces Mia Love, the Republican nominee in Utah’s 4th congressional district, during a rally Wednesday, Oct. 8, 2014, in Lehi, Utah. Romney hosted the rally and fundraiser for Love. (AP Photo/Rick Bowmer)
Eleven years later, here we are, suffering under a command-and-control plan called Obamacare, premiums skyrocketing, with no certainty we can keep our plans or our doctors.
The intellectual battles Republicans run from today are those they lose in Congress tomorrow, having already retreated long ago.
Which is why it's so worrying that GOP officials are trying to duck a burgeoning debate about pharmaceutical drugs, allowing Hillary Clinton – who is desperately trying to stay to the left of an out-and-out socialist – to set the terms of the debate.
The headline from The Hill says it all, “Uproar over drug pricing puts GOP in the hot seat.”
Republicans, the story notes, have largely “remained silent,” even as a blue state senator, Sen. Susan Collins (R-Maine), tries to use the issue to her advantage. Even the token Republican quoted to push back against left-wing ideas (Rep. John Shimkus (R-Ill.)) is looking for cover, musing about hauling drug companies before his committee to “shame” them. Nice, congressman. How Maoist of you.
The stakes could hardly be higher: Setting price controls on drugs will mortally wound the research and development process, preventing the would-be miracle cures of tomorrow from ever coming into existence.
And don't underestimate how draconian the Clinton plan is, which even liberal experts have denounced as willfully ignorant of the laws of economics. Back when she was concocting Hillarycare in the 1990s, she actually caused minor stock market crashes as investors began to understand how this would destroy the remaining market-driven portions of health care.
This is slaying the golden goose, and it's all the more ironic because we've watched technology revolutionize our lives in the course of our lifetimes. That revolution is accelerating, not slowing down. And I, for one, do not want to end innovation in medicine because a scandal-plagued Democrat needed an applause line and Republicans did nothing to push back.
So here, for the lazy, unimaginative bozos we have representing our ideas in Washington, D.C.'s halls of power, is how conservatives think about the prescription drug market:
1. Government negotiation of Medicare Part D prices is effectively price controls and price controls do not work. Period. Full stop. There's prices, and there's rationing. There is no magical world in which setting artificially lower prices does not result in rationing. Other countries with price controls experience rationing. Other industries with price controls experience rationing. In the 1970s, we tried this with gasoline, it led to lines around the block.
2. Government negotiation of Medicare Part D prices is effectively price controls and will reduce choice for seniors.
3. Pricing is often demonized by the left, but for many reasons it's the best, fairest way to allocate resources. Included among those is that high prices eventually solve the problem of high prices by incentivizing other people to compete for an abnormally high profit margin.
4. Some of the drugs critics love to harp about are literally saving people's lives and cure diseases for which there was previously no cure. For example, Sovaldi is often mentioned. It's $1,000 a pill. It's also a wonder cure for Hepatitis C, a heartbreaking disease that leads to cancer in a majority of its victims. Ask the people whose lives were saved whether it was “worth it.”
5. Drugs could cost a lot less if the government streamlined its byzantine regulatory process. Because of the antiquated drug approval system, the risks of bringing a new drug to the market are huge and the capital requirements enormous. This itself limits innovation by pricing smaller firms out of the market. Safety is paramount, but you could make huge strides in this area without sacrificing it at all.
6. “Reimportation” is simply the importation of price controls. It's obviously not ideal that other countries are basically leeching off the innovative engine that is the American economy, but that's preferable to killing the engine.
Instead of embracing demagoguery and short-termism that brought us Obamacare, Republicans should reject the command and control economics of prescription drug price controls and the unwanted and unintended consequences that come with it.
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