Big Pharma, Drug Prices, and FDA Standards

I attended Prof. Nicholson’s talk on prescription prices. I liked learning about the pricing structure from him, and there was even a woman there who works for Cornell’s private self-insurance group who had s some interesting things to say about pricing structure for employees at Cornell. The audience was very anti-pharma, and it was interesting hearing Prof. Nicholson half-heartedly defend pharmaceutical companies for the life-saving drugs that they churn out every year. This will be no surprise to people who know me, but I am very libertarian, so hearing the audience go after pharma companies when to me the obvious culprits are Congress and the FDA was disheartening. Drugs would be a lot cheaper if Congress and the FDA passed fewer regulations that prevent drug competitors from entering the US market. As I tell my socialist friends, even Bernie Sanders agrees that US citizens should be able to import drugs from Canada and the EU, but that is currently illegal under FDA guidelines and could get you thrown in prison, just for wanting cheaper pharmaceuticals. Professor Nicholson also recommended a single-payer system like the UK’s NHS which he romanticized. The obvious counterargument to a single-payer system is, “would you want the government to have a monopoly in any other market?” The answer to most people is no, government monopolies are just asking for gross misuse of resources, cronyism, and poor quality services. All of this said, Prof. Nicholson knows more about healthcare economics than I do, but I feel very strongly that he is missing fundamental economic insights because he is awash in the complexities and minutiae of healthcare policy.

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