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Beware of Strange Bedfellows in Washington

04/21/2009

The consumer group Families USA and Pharmaceutical Research and Manufacturers of America (PhRMA) are teaming up in Washington to lobby to increase coverage for Medicaid.  Why would the medical companies support more government intervention in their industry?  Maybe because they did a cost-benefit analysis and concluded that they would make more money with more interventions.  According to Politico, "The upside is that it would help drug companies tap a new market by providing coverage to those who are too poor to buy drugs."  These groups worked together on S-CHIP as well, likely for the same reason.

So, rather than bidding prices down and competing with each other to sell quality drugs to the poor like companies would if they operated in a real free market, the big pharmaceutical companies are spending resources lobbying in Washington to have the taxpayer pay for the high priced drugs.  Instead of these companies actually competing with each other to benefit the poor, they will instead have government force taxpayers to buy their expensive drugs.  Instead of competition forcing prices lower, taxpayers are footing the bill for the big companies to produce high cost drugs inefficiently.

Congress, the president, and the American people should recognize this mockery of our political system and look past the arguments of "what about the poor?" to see that they would benefit just the same if government didn't act.  Why hand out money to big businesses when the market can provide drugs for the poor at no expense to the taxpayer?