The Myth of the Free Market in Pharmaceuticals

Actually no, I didn ' t write that title, although I could have. In fact I could have written this entire article, but it was written by Rena M. Conti, Ph.D., Richard G. Frank, Ph.D., and David M. Cutler, Ph.D. Unfortunately it ' s paywalled, and there ' s no abstract, buthere ' s the link so you can read the first sentence, and you can register to read it for free. (You get two free articles per month.) Since I ' m giving them a referral, I don ' t feel terribly guilty about raiding this piece fairly extensively. It begins:Critics of U.S. policy aiming to reduce spending on prescription drugs claim that the government is wrongfully interfering with a “free” market. A recent comment from Merck about the 2022 Inflation Reduction Act (IRA) exemplifies industry complaints: “Congress has long been committed to a free-market approach based on market-driven prices. … Last summer, however, Congress charted a radical new course.”1 But the moder n U.S. pharmaceutical market is not what Adam Smith would have considered " free. " They use quotations marks where I prefer to use the trademark symbol (Free Market ™) but same idea. Actually there ' s no such thing as a Free Market ™ for anything but we ' ll concentrate on pharmaceuticals for now. Here is their summary:  So here ' s today ' s challenge. Yes, there are products for which government intervention in the market is not as extensive, or at least not as obvious. But do they meet the three crit...
Source: Stayin' Alive - Category: American Health Source Type: blogs