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Source link: http://archive.mises.org/5214/because-drug-price-competition-is-bad-mmmkay/

Because drug price competition is bad, mmmkay???

June 22, 2006 by

Sez Senator Charles Schumer. The pharmaceutical company Merck is facing generic competition for its cholesterol-lowering drug Zocor. In response, Merck is cutting deals with insurance companies to offer lower copays on name-brand Zocor than the generic equivalent (it’s true that a copay is not the actual price of the drug, but it is the price signal that people with insurance are concerned with. I’m not sure how this affects the price of the drug without insurance). According to Schumer, price competition between brand-name and generic drugs is bad for consumers. Why? Because undercutting your competitor on price is…anticompetitive. Schumer has asked the FTC (the subject of S.M. Oliva’s recent post) to investigate. It is ultimately this government body that decides what is defined as “anticompetitive”. Apparently, allowing consumers to pay less for a product has now become part of that definition.

{ 14 comments }

Yancey Ward June 22, 2006 at 12:12 pm

I suspect that if one follows the money, one will likely find that the lead generic provider of the Zocor compound is giving heavily to either Schumer or the Democratic Party and its affiliated organizations. The other explanation for Schumer’s idiotic statement is that he is, in fact, a moron.

Jim B June 22, 2006 at 1:24 pm

Similarly, is paying taxes “anti-taxation” because it reduces tax liability? I’d like to use this argument next audit …

Vince Daliessio June 22, 2006 at 1:58 pm

Schumer is no idiot. New York is full of pharmaceutical companies that are not Merck, which is headquartered in NJ. Do the Math.

Curt Howland June 22, 2006 at 10:53 pm

The scene (chapter?) in the book _Unintended Consequences_ when the protagonist “deals with” someone who bears a striking resemblance to Schumer (although the specific name is never used) comes to mind.

Cristian June 24, 2008 at 10:58 am

The main problem for me as a consumer is that the cheaper drug should not send to me to a drug rehab. I would like competition but quality as well when it comes to the pharmaceutical industry.

Ada June 30, 2008 at 6:01 pm

Follow-on recombinant proteins may arise from separate manufacturing processes and differ in master cell line, processing and purification, inert ingredients, and packaging. Opponents of accelerated approval mechanisms for follow-on protein products believe, regardless of rigorous physicochemical characterization of the protein, that the “process is the product,” because even small and seemingly insignificant manufacturing changes could theoretically contribute to differences in protein folding, aggregates, and glycosylation, which might manifest clinically as decreased efficacy, altered pharmacokinetics, or increased immunogenicity,or even take you in a drug rehab indeed.

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