Not sure how possible such an idea is, but why not create a public utility that creates essential medication for the lowest possible price? In the end Medicare seems to pay already huge amounts of money for some medications and there must be know-how in the federal government or other public institutions on how to manufacture medications.
I'm not trolling. Like clean water, this is maybe an area were society should not tolerate market failure or cronyism.
Let’s say we do this, and you create a state funded company that creates cheap insulin, let’s say they can sell it for 25$ in Walmart. What then happens is that to sell that drug to the insurance companies they negotiate with the Phamacy Benefits Managers they will say to them:”We want a 66% rebate!!” They’ll say errr? At what price? The PBM will say:”we don’t care, insurance covers the price”. So that company ends up putting a list price at 74 but providing a 66% rebate to the PBM so they still get their profit... but then the next year the PBM comes back saying “well, we are going to need a bigger rebate because the competitors where willing to raise their prices even more and thus giving us bigger rebates”
You essentially have a party who’s getting every company to compete on who is willing to sell at the highest list price who’s driving negotiations against the producers who only stand to gain by higher prices.
> ...but why not create a public utility that creates essential medication for the lowest possible price?
One possible reason I can think of is then nobody would develop new essential medications because they know the government will just nationalize it after they spend the billions getting it approved through the FDA.
And everyone + dog would be calling their medication "essential" in order to get the benefits of governmental production.
I'm not trolling. Like clean water, this is maybe an area were society should not tolerate market failure or cronyism.