Price Controls Aren't the Answer to Skyrocketing Prescription Drug Prices

Market forces, not mandates, will lower drug prices.

The Biden Administration's New federal price controls on prescription drugs are not only missing the real cause of the high prices...but the Congressional Budget Office [CBO] says it will have other consequences. Healthcare expert David Balat with Texas Public Policy Foundation explains. "The CBO and many other organizations determined this action will reduce the number of new therapies and cures will be developed. It has unintended consequences, including more spending on health care and less research and development meaning fewer new drugs for deadly diseases. Price controls help the legacy manufacturers but hinder the ability of innovative startups to go through the extremely expensive process of coming to market put in place by our own FDA.” "

While the administration is saying they aim to mandate prescription drug prices, Balat says the real cause of the skyrocketing prices is too many entities in the middle of the supply chain (middle men) collecting their portion of the profits. "We have this very bloated middle man problem in our prescription drug supply chain problem. Insurers and Pharmacy Benefit Managers retain the majority of the dollars spent on medication at the same time they are recording record profits!"

Balat says there are independent companies - like CostPlus Drugs (Online Pharmacy) - selling generics,
"They say:
'OK, we bought the drug for this much money: $____
This is our mark-up which includes our profits: + $ ___
This is what we're asking you to pay: = $____'
Typically pennies on the dollar of what you would otherwise pay - even using your insurance."

ScriptCo is another online pharmacy selling generics. Users (Members) pay a monthly fee which is the company's profit. They sell the generics to their members for the price they paid for them.


Opioids and US Currency

Prescription prices skyrocketing.Photo: Getty Images

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