Readers of the Corner will recall my earlier post about the “negotiations” over how much the feds will be allowed to steal (at first) as part of the “reform” effort to bring health-care socialism to America, and the utter stupidity of those smart businessmen who tried to induce the White House and congressional alligators to devour someone else first. It was easy to see that this tactic wouldn’t work. Can a deal with the White House be imposed on the Waxman/Pelosi/Reid Axis? Would Obama veto a bill that failed to honor, say, the “negotiated” $80 billion limit on the “contribution” to be made by the pharmaceutical industry? Did those smart businessmen not ask themselves these obvious questions?
So obvious indeed are the questions that they answer themselves. From yesterday’s New York Times: “Democrats Say No to Cost Cap for Drug Makers.” Thundered the ineffable Pelosi (through a spokesman): “Ms. Pelosi supports House efforts ‘to squeeze more money out of . . . the pharmaceutical industry.’” Also spake Comrade Waxman: “I think that PhRMA [the drug makers’ industry group] should contribute more than PhRMA wants to contribute.”
“Contribute” is an interesting euphemism for wealth transfers coerced by the federal government. In any event, it is truly amazing that the pharmaceutical industry actually believed that the $80 billion ceiling it negotiated with the White House would not become a floor in a Congress that has not patients but instead interest groups. That observation leads inexorably to the realization that price controls are the real issue to be negotiated, with current patients the winners and future patients the losers. (For my paper on the adverse effects of such price negotiations for pharmaceuticals, go here.)
One would think that those smart businessmen could have see all this coming, particularly after having spent decades or centuries cumulatively inside the Beltway. And one would be wrong.
– Benjamin Zycher is a senior fellow at the Pacific Research Institute.