The universal experience has been that price controls produce shortages, black markets, reduced quality, and economic hardship. Under the guise of controlling Medicare costs and shielding the elderly from 'unfair' prescription- drug prices, current proposals would restrict discounts on drug prices, cap healthcare spending, and limit insurance premiums. Among those adversely affected would be hospitals, members of managed care organizations, public health clinics, and government programs such as Medicaid and the Veterans Health System, which, because of their mass-buying power, are able to negotiate favorable drug prices for patients. Patients wait months and sometimes years for surgery, suffering significant harm to health, even death, as a result. Government bureaucrats, rather than doctors or patients, select treatments.
Pharmaceutical innovation languishes.
In recent decades, American healthcare firms have created hundreds of new drugs, devices, and other medical products that have saved millions of lives, not only in the United States but around the world. The best way to save millions more is to enhance the incentives to research, develop, and market new healthcare products. Existing price controls and other trade restrictions affecting healthcare goods and services should be removed in order to encourage dynamic entrepreneurship in competitive markets. The result will be lower prices, greater innovation, and higher quality. Nor do they call forth improved healthcare services.