Mandated Heath Market Inefficiencies

We cannot permit America to be the “pay line” for every worldwide drug and device development program. The same pill sold here in America for $25 is $2 in Canada and other nations.  The cost of reproduction is covered by the $2, but development is not.  The free market would normally prohibit this activity since people would simply buy the drug in Canada and re-import it here, but the drug and device makers lobbied Congress to make that illegal.

A good portion of these sort of inefficiencies could be eliminated simply by removing patent protection for drugs. If the US eliminated the patent system, drug companies wouldn’t be able to prevent competitors from selling identical drugs on the cheap (although competitors would not be able to recreate any placebo effects that occur with brand names).

Of course, this action is opposed because it would lead to less drug research, particularly in the treatment of rare diseases. But, were this the case, the market would work as effectively as it should. One of the problems the US faces in regards to medical care is that everyone wants a drug to solve their medical issues. Between patent law, health insurance mandates, and anti-competition laws, the US government has managed to effectively subsidize research for diseases that would not ordinarily merit research.

One effect of this effective subsidy has been the increase in unhealthy behaviors. Since people are implicitly promised health care and medicine no matter what, it would be reasonable to expect people to take more health risks. And, given the current obesity epidemic, it seems that this is certainly the case. As such, removing the effective subsidy of drug research would help to encourage people to live healthier because drug companies would be much less inclined to research drugs that cure rare or complex diseases. Thus, by removing subsidies, health becomes cheaper.

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