Hillary Clinton may be the Democratic Party's presumptive nominee for president, but when it comes to policy she is being led by the nose by her rival, Sen. Bernie Sanders.
Not wanting to be "out-liberaled" in the Democrat primary, Mrs. Clinton has shown a willingness to support any position proposed by her self-described “democratic socialist” opponent.
She has already proclaimed her agreement with Sanders on a host of issues. When Sanders said that campaign finance would be a big issue, Clinton announced her support for a Constitutional amendment to limit freedom of speech. When Sanders demanded "free" college tuition for all, Clinton responded that we must make "college as debt-free as possible," which has emerged as a Democratic euphemism for more government higher education subsidies. Now, adopting a position espoused by Sanders for years, she has even come out in support of government price controls on prescription drugs.
(Photo by Alex Wong/Getty Images)
It hasn't yet captured much public attention, but if followed Clinton's call for Medicare to “drive a harder bargain negotiating with drug companies about the costs of drugs” would led us from one disastrous government intervention in health care to another.
Clinton and other boosters of prescription drug price negotiation pretend that because the government is not passing a law or regulation specifying the price for drugs, that it does not amount to a price control. But that's a distinction without a difference. Over the years the federal government has forced itself into the health care market as a third-party standing between providers and patients. Doing so has not only raised costs in a number of ways, but through Medicare's coverage of over 50 million Americans grants the government power as the primary drug buyer to dictate prices just the same as if it did so by law.
Government price controls and manipulations have failed whenever they have been tried. From Richard Nixon's disastrous effort to impose wage and price controls in the 1970s to efforts to limit the cost of gasoline, whenever the government has sought to dictate prices, unintended consequences in the form of black markets or government-created shortages have followed.
Price controls fail to take into account changes in supply and demand, leaving consumers searching and often unable to find needed goods, or having to pay a higher black market rate once they do. That's why the proposal to impose such a mandate on prescription drugs would be particularly dangerous to the sick and elderly.
It would also limit the development of future lifesaving drugs. Thanks again to the government, the cost to develop and bring to market a new drug is extremely high. Billions can be spent on research that fails to produce results, so when companies do find a success, they must recoup the costs for those failures. Forcing prices below market levels will lead companies to reduce investment and take fewer risks. That means more pain and shorter lives for patients depending on new treatments.
Even federal government bean counters at Health and Human Services and the Congressional Budget Office have concluded that government involvement in price negotiation will not lead to lower costs and could lead to significant restrictions in access to drugs.
Ironically, supporters of the scheme point to the Veterans Affairs as a model. Americans have rightly lost faith in a VA mired in scandal. Moreover, when the government fails to reach agreement with a company veterans are denied access to its drugs, which partly explains the VA's substandard quality of care.
Price controls have always been popular politically and disastrous economically. Hillary is no doubt smart smart enough to understand this. But if she really wants to demonstrate a presidential pedigree, she should also be leader enough not to support every big government scheme proposed by her socialist competitor.
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