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 health care 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. In countries with price controls, health care services are severely rationed. 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 health care 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 health care products. Existing price controls and other trade restrictions affecting health care 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. Despite claims to the contrary, price controls do not reduce medical costs.