No big market forces here!

About the proposed Medicare prescription drug benefit, we read in the New York Times:

[The bill] relies on insurance companies and private health plans to manage the new drug benefit. They could negotiate with drug companies, but the government, with much greater purchasing power, would be forbidden to do so.

Supporters of the provision say it is necessary to prevent the government from imposing price controls that could stifle innovation in the pharmaceutical industry. Critics say the restriction would force the government and Medicare beneficiaries to spend much more for drugs than they should.

Supporters of this bill are generally Republicans and conservatives. They don't want to give an entity (in this case the government) the power to exercise its market power on the (ostensible) grounds that it hurts innovation, etc. But that's precisely what big companies like Walmart and Microsoft do. And we've never heard Republican calls for restricting those companies ability to negotiate.

posted by Quiddity at 11/24/2003 06:56:00 AM