Perhaps the two biggest drains on government programs — and taxpayers’ wallets — are inefficiency and patronage. Nowhere is that more evident than in federal health programs including Medicare and Medicaid, where several regulations — and laws — add to patient and program costs without improving the quality of care.
Those policies include prescription requirements for many medications that have proven safe enough to be sold over the counter. Until recently, for example, border residents could easily cross the border and get some antibiotics and other medications over the counter, at a fraction of their cost in the United States — where patients also had to endure, and pay for, doctors’ visits in order to get the prescriptions. Mexico has changed its policies in recent years, largely because people still had to show prescriptions for the drugs at our ports of entry when they reentered the United States.
Many people with chronic ailments such as heart conditions and diabetes already know what medications they need and shouldn’t need to visit the doctor so frequently just to renew their prescriptions. Patient advocates, government watchdogs and many lawmakers themselves have fought to ease restrictions on the types and venders required for drug and other medical purchases, including bans on buying medicines outside the country. The higher costs associated with those restrictions keep many patients from buying drugs they know they need but can’t afford, and some Winter Texans still cross into Mexico because paying out of pocket for their medications is less costly than buying it in this country, even with insurance coverage.
President Biden, and others before him, have proposed imposing price caps on U.S. medications. Such artificial controls are unfair and inefficient; a whole new level of bureaucracy would be needed to regulate and enforce the price caps.
Instead, officials should ease restrictions that protect drug makers and enable them to charge unreasonable amounts, and allow natural competition to bring prices down.
Developments in the market are making such changes the better option. Dallas entrepreneur Mark Cuban, for example, recently opened a cost-plus direct-marketing outlet to provide prescription drugs at lower prices. The company now is talking with hospitals around the country to determine which medications are most used and in short supply. The goal is to increase production of those medicines, such as insulin and cancer drugs, hoping that greater supplies will drive down the traditionally high costs.
A HarvardUniversity study published in June estimated that Medicare could save $3.6 billion per year if it bought generic drugs from Cuban’s company. Such savings not only would benefit a program that already is short on funds, but also likely would force fewer people to decide whether to buy lifesaving drugs or food because they couldn’t afford both.
Operating government medical plans less like a bureaucracy and more like an open market would improve Americans’ health care, and improve its fiscal health as well.
