Drug price reform
One of the health policy objectives I wanted, and was briefly mentioned on the left, was an effort to lower the cost of prescription drugs. Some wanted the government to negotiate the prices of generics, some wanted to import generics, and some wanted the government to produce generic drugs and sell them slightly above cost, even having the FTC investigate pricing, but Democrats limited themselves to ten drugs and a review board over time and only for Medicaid. Although it was a slight improvement, it did not meet the moment. We needed a massive overhaul like one I thought only the government was capable of, but I was wrong.
Around the time Democrats were working on reforming prescription drug prices, Mark Cuban decided to work to fix the issue himself. He unveiled his pharmacy that would provide drugs with a minor markup on generics to lower costs. Many people at the time could not see this for the shakeup it was. Cuban had implemented a more affordable and cost-effective system that would pressure other pharmacies to do the same.
Mark Cuban’s Cost Plus Company caused CVS one of the largest pharmacies, to redo its pricing system after it began getting contracts from them. CVS is now moving to a more transparent system, where they can’t just blame the pharmacy benefit managers who previously negotiated prices. The new system they call CostVantage has a formula based on the cost of the drug, a set markup, and a service fee for PBMs. CVS says this will shake up prices for drugs, leading to some prices dropping, which is a win for consumers. But can we not do more?
If Cuban’s Cost Plus was able to push one of the largest pharmacies to lower costs imagine what could the government do? The government should negotiate or regulate prices, not just the ten it is doing for Medicare, The government should allow imports of lower-cost drugs and The government should manufacture generic drugs to drive costs down further. There is no reason the public sector should not work to fix a healthcare system that it has manipulated for special interests. We should not have to be reliant on rich technocrats to solve problems the government is more than capable of.