Don't drug companies have rights?

Don’t drug companies have rights?

In a recent op-ed Judith Stein of the Center for Medicare Advocacy explains why she thinks government should lower drug prices for Medicare recipients. The article is worth reading because it is an example of a pernicious assumption that permeates most health policy discussions.

Stein argues at length that lower drug prices would benefit Medicare recipients, the federal government and taxpayers. Considered out of context, who could oppose the possibility of cheaper life-saving drugs for the elderly?

But consider the means Stein supports to bring about this result — a congressional initiative to impose price controls on drug companies (a process dressed up by calling it a “rebate”).

By what right does the government dictate to drug companies — those who have spent billions of dollars and worked countless years to figure out how to alleviate the complex ills that can plague the human body — what they can charge for their efforts? Stein doesn’t bother to consider this issue in her article — the assumption is that since some people need cheaper drugs, it’s okay to pay the producers, not what they’re charging, but what the consumers decide is enough.

Imagine doing this in any other context — for example, walking into an Apple store, picking up an iPad that costs $499, deciding it’s not worth that much, slapping a hundred dollar bill on the counter and walking out. It would be inconceivable (not to mention a crime).

Yet this attitude is ever-present in health policy circles, where there is much discussion about how to distribute the efforts of others without any consideration of the rights of the producers. In this case, there is no consideration for the fact that these drugs belong to the companies that have invested the time and resources to produce them — and that nobody else has the right to decide the price at which they are sold.