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Halloween Part II: Dawn of Price Controls: Each year, Congress resurrects a bad policy
The Halloween movie series features a hockey-masked Michael Myers (not to be confused with the star of Austin Powers or Wayne's World) continually returning to slash and kill people. Despite repeated efforts to finish him off at the end of each flick, he seems to rise from the dead in the next movie to begin yet another homicidal rampage.
Is it the season or the habits of Congress that bring the Halloween movies to mind? Each year members of Congress come up with proposals to impose price controls on prescription drugs - raising the price control on drugs in the Medicaid program, importation of drugs from countries with price controls, imposing VA prices on Medicare drug benefits, giving HMOs in Medicaid lower drug prices, extending below-cost pricing of medicines for public hospitals to the entire free world, etc.
Often they are beaten back or tabled. The reasons for doing so are sound. Price controls discourage development of new medicines and limit access to medicines based on their price, or the amount of a cash rebate. These tactics have been shown to make patients sicker, thus driving up total costs. But each year these proposals rise again in an effort to kill off innovation and undermine patient care.
It would be wonderful if Congress would look instead at how to use new technologies and medicines to actually reduce the cost of care instead of simply focusing on one budget item. And it would be great if our elected representatives saw that driving prices down only discourages innovation, thus costing consumers their money and their lives.
Rather than wait for yet another bad sequel to a bad policy, the Manhattan Institute's Center for Medical Progress offers two studies showing the carnage price controls can produce. We have also included an original editorial by Merrill Matthews, Ph.D., from the Institute for Policy Innovation.
We hope policymakers consider their findings and conclusions seriously before another Halloween passes.
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