Thomas Sowell

When politicians talk about bringing down the cost of prescription drugs they are exploiting a widespread confusion between prices and costs. Prices are not costs. Prices are what pay for costs -- and if you don't pay those costs, you are not going to keep on getting what you want.

The cost of creating a single new medication runs into hundreds of millions of dollars. You can play all the political games you want with prices, but if those hundreds of millions of dollars are not paid for, don't expect people to keep investing that kind of money to develop new drugs to deal with cancer, AIDS, Alzheimer's, and all the other afflictions of human beings.

That money comes from pension plans that millions of people pay into, as well as from banks and other investment sources. Politicians can always find ways to chisel these people out of their money in the short run but the public will pay in the long run.

Fewer new drugs mean needless suffering, disability, hospitalization and premature death. Higher hospitalization rates alone can wipe out savings from lower drug prices. Paying the mounting costs of medical care has turned into a shell game, where everyone tries to get someone else to be stuck with these costs. But these costs are not going away.

Why would Americans, with the highest quality medical care in the world, and a pharmaceutical industry creating more new major prescriptions drugs than anywhere else in the world, want to jeopardize all that for the lure and the promise of political miracles?

Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

Creators Syndicate