Friday, February 12, 2010

The Free Market Solution to High Drug Costs: Freedom

On Wednesday the Chronicle's editorial slammed pharmaceutical companies for what it called "the unconscionable gouging of consumers." Citing the industry's efforts to keep drug prices high, the editorial endorsed a demand by several Senators that Congress put an end to “anti-consumer and anti-competitive backroom deals.”

I would completely agree with the sentiment of that statement, and a good place to start would be in the Senate. This is the same distinguished body that secured votes for health care "reform" by making “anti-consumer and anti-competitive backroom deals” with Ben Nelson and others. This fact however, is noticeably absent from the paper's editorial. Nor does the paper note the years of testing and millions of dollars that pharmaceutical companies must spend in order to secure FDA approval for new drugs.

One of the comments to the editorial mockingly asks what the free market solution would be to this issue. My response: actual freedom for pharmaceutical companies, consumers, and doctors.

Freedom means the absence of coercion. It means the ability to act without interference from others, so long as you respect the mutual right of others. It means that you can act according to your own judgment. Such freedom certainly does not exist in regard to medicines.

Pharmaceutical companies cannot offer products without first securing permission from the FDA. Nor can they label their products for uses not approved by the government. Doctors cannot prescribe medicines for unapproved uses. Consumers are prohibited from purchasing medicines without a prescription and are subject to criminal penalties if they attempt to save money by purchasing drugs in Mexico or Canada.

The pharmaceutical companies are not entirely innocent victims in this injustice. With visions of short-term profits dancing in their heads, they threw their support behind health care "reform". Unwilling and unable to identify the long-term implications of more government controls, they abandoned principles and ponied up to the government teet.

Pharmaceutical companies produce immense values--drugs and other medical products that save our lives. They should be rewarded handsomely for the thought and effort they invest in their products. They should be free to develop and market products as they decide, not as government officials dictate. Doctors and patients should be free to select the medicines they choose, free from government controls.

Despite the implications of the paper's editorial, patients do not have a right to medicines, no matter how dire their circumstances. Patients--like all individuals--have a right to act in the pursuit of their values, to trade the products of their thought and effort for the values they want or need. But neither their desires nor their need constitutes a claim on the property--neither medicine nor the money to pay for it--of others.

The free market solution to health care costs is quite simple: freedom. It's our moral right.

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