The Washington Post has an excellent editorial today analyzing the Democrats plan to empower government to negotiate drug prices directly with providers. As the Congressional Budget Office concluded, this plan won’t save seniors money. The editorial highlights how the Democrats stance reveals a misplaced faith in big government and a failure to recognize the benefits of the marketplace:
“The Democrats’ stance is troubling because it suggests an excessively government-led view of health-care reform. One of the key challenges in health policy is to understand which drugs, tests and therapies are most cost-effective; although it will take government pressure on doctors and hospitals to disclose the information necessary to figure out what works, solutions are most likely to be found by competing private entities. In drugs, for example, there needs to be a culture of paying handsomely for new ones that really do add value — and refusing to pay for pseudo-new drugs that merely mimic cheap generics. Striking the right balance is not easy, and it won’t be accomplished by government fiat. The better approach is to let each insurer offer its own version of the right balance, see whether it attracts customers — and then adapt flexibly.”