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Drug Prices Are High Because Government Protects Monopolies

in Healthcare, Liberator Online, News You Can Use by Alice Salles Comments are off

Drug Prices Are High Because Government Protects Monopolies

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Ever since the EpiPen scandal hit the public like a ton of bricks, many outlets contended that greed, not cronyism, was to blame.

pillsBut when looked closely, EpiPen is just another example of corporate influence and lobbying shaping public policy. The ones who benefit are always the same individuals who pressed for changes in the first place.

In an article for the Fiscal Times, Mercatus Center’s Marc Joffe contended that the drug price problem could be fixed by targeting the Food and Drug Administration. But not by giving the agency more regulatory power. Instead, Joffe argues that, stripping the agency of its power would do America a world of good.

In the article, Joffe tells the story of how the FDA obtained its power, noting that it was a morning sickness pill that prompted the nationwide support for the Kefauver Harris Amendment, which “gave the [FDA] most of the power it now exerts in regulating drugs.”

As the FDA expanded its power, regulating every single piece of medication in America, drug prices increased considerably, while access to many life-saving drugs remains restricted. To Joffe, the “drug crisis” we now face as a nation has everything to do with the empowerment of the FDA, prompting the scholar to urge lawmakers to look at the free market for a solution if what they are truly after is to lower drug prices.

In a competitive market, Joffe writes, “price equals the marginal cost of production.” But even in an imperfect world, he contends that, when “prices [are] well above production costs,” firms see an incentive to compete. But if markets are restricted and companies are granted exclusive rights to produce and sell certain drugs, firms are unable to compete. Without competition, monopolies set the rules, making way to high costs and low effectiveness.

In his article, Joffe argues that, if Congress is serious about helping patients from all walks of life, they must stop considering the idea of passing laws to expedite the FDA’s approvals for new drugs. Instead, Joffe writes, “[allowing] multiple organizations to approve drugs, providing competition to the FDA … [or allowing] pharmaceutical companies sell whichever medications they believe to be safe and effective — with the understanding that patients can win large judgments if the companies fail to produce and market their treatments responsibly,” would both be better options that would deliver better, and more effective results.

Freedom, after all, is the answer to most of our problems. And that’s why governments often contend the opposite.

What is a Libertarian Win? Part 2

in From Me To You, Liberator Online by Brett Bittner Comments are off

What is a Libertarian Win? Part 2

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

**Note: This is the second part of an article focused on wins for libertarians. You can find the first part, focused on electoral politics, here.**

Outside of winning your election as a candidate or some of the other wins we shared in Part 1, libertarians can win in other ways as well.

  • winWinning a voter referendum. Colorado, Washington, Alaska, and Oregon re-legalized the possession and use of marijuana recreationally. About half of the states that legalized marijuana for medical use did so through ballot measures. These popular votes increased freedom for everyone in their respective states and pressured nearby states to “keep up with the Joneses.” These referendums gave libertarians an opportunity to share a message about the freedom to choose what goes into your body. Statewide ballot measures are not the only opportunities to share a freedom-oriented position on an issue. Local tax referendums take place across the country, and are a great opportunity for a win for libertarians. We can highlight wasteful spending, cronyism, and the proper role of government in opposition to the proposed tax. Who votes to tax themselves? 
  • Lobbying for legislative action. Referendums are not the only avenue for libertarian legislative wins. Strong working relationships with legislators and their staff can yield positive results for liberty if you work with them to pass freedom-oriented bills. This can be a difficult route, even if you have legislators friendly to the issue you’re working on. This will also require some coalescing with other groups with a similar interest and potentially compromising to get some of what you seek. This is easier with the more populist beliefs we hold.
  • Disruptive innovation. Almost entirely outside of politics, free market innovations that revolutionize industries and change the way we do things disrupt the status quo and offer another win for libertarians. Innovations like Uber, Airbnb, and Amazon transformed transportation, travel lodging, and retail sales. Until your innovation affects Big Government and their cronies, this won’t become a political issue. As Uber, Airbnb, and Amazon can tell you, the politicization of innovation will get you interested in politics, no matter the level of interest you held before.

Can you think of any other ways a libertarian can win?