Negotiations

Apparently the congressional Democrats’ much-touted plan to have the HHS Department negotiate prices for Medicare’s prescription drug purchases is something of a scam. See Robert Reich and Brad DeLong. The problem is that these are negotiations without teeth. As Reich puts it “The Department of Veterans Affairs gets a 25 percent discount on drug prices for veterans because if a drug company won’t give a big discount, Veterans Affairs won’t include the drug in its plan.” Medicare won’t be authorized to drop a drug of the manufacturer won’t offer a discount, so there’s no reason for drug makers to offer any kind of meaningful discounts. One hopes this sham bill may be the start down a slippery slope to something more meaningful, but so far so bad.