Forbes September 12, 2021
On Thursday, September 9th, the White House released a long-awaited plan to reduce prescription drug prices and out-of-pocket costs for patients. The plan is more conspicuous for what it doesn’t tackle, or leaves unsaid, than what it addresses (mostly) indirectly and incrementally.
The report asserts that prescription drug prices in the U.S. are “too high,” putatively due to lack of competition. The plan identifies myriad “market failures” that prevent competitive pricing of drugs from occurring. According to the report, the prescription drug market exhibits “monopolistic or oligopolistic behavior.” As illustrations, the report cites stakeholders erecting barriers to entry, such as patent thickets and pay-for-delay schemes. Without elaborating, the report points to the market operating suboptimally by incentivizing list price inflation,...
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