Yet Democrat Amy Klobuchar of Minnesota has introduced legislation that would require the Secretary of Health and Human Services to negotiate prices directly with drug manufacturers. A version of it is likely to be included in the Democrats’ budget and endorsed by the president.
This is despite the fact that CBO director Doug Elmendorf shot down the idea in 2009 when he said “granting the Secretary of HHS additional authority to negotiate for lower drug prices would have little, if any, effect on prices for the same reason that my predecessors have explained, which is that private drug plans are already negotiating drug prices.”
So there’s no reason to have HHS “negotiate” unless the word actually means something stronger and more dangerous. The only way centralized, government-controlled negotiations could lower prices further would be to restrict the availability of drugs or to impose price controls, which would undermine the incentives for research and development in the next generation of cures. Which means worse health outcomes and higher costs for the rest of Medicare.
Instead of trying to bring more centralized control to the part of Medicare that’s actually working, Congress should focus on bringing the principles of competition and choice to the rest of Medicare.
Phil Kerpen is president of American Commitment, a columnist on Fox News Opinion, chairman of the Internet Freedom Coalition, and author of the 2011 book Democracy Denied.
American Commitment is dedicated to restoring and protecting America’s core commitment to free markets, economic growth, Constitutionally-limited government, property rights, and individual freedom.
Washingtonian magazine named Mr. Kerpen to their "Guest List" in 2008 and The Hill newspaper named Mr. Kerpen a "Top Grassroots Lobbyist" in 2011.
Mr. Kerpen's op-eds have run in newspapers across the country and he is a frequent radio and television commentator on economic growth issues.
Prior to joining American Commitment, Mr. Kerpen served as vice president for policy at Americans for Prosperity. Mr. Kerpen has also previously worked as an analyst and researcher for the Free Enterprise Fund, the Club for Growth, and the Cato Institute.
A native of Brooklyn, N.Y., Mr. Kerpen currently resides in Washington, D.C. with his wife Joanna and their daughter Lilly.
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