Over the past several weeks, I’ve been writing about measures in several states that are looking to impose greater reporting burdens on one particular segment of the manufacturing sector in the name of greater transparency. One provision of the so-called transparency measures being debated in several state houses around the country would require manufacturers of medicines to report the prices they charge in other countries for their products. While on the surface this may seem like a useful exercise, in reality, it is completely irrelevant to consumers. The price of medicine in one country or another should have no more bearing on what the price should be in the United States than a similar comparison of the price of ball bearings in Bangladesh or Boston. The point is, they are completely different markets, and countries often differ dramatically in their approach to the delivery of health care to the degree that any comparison is meaningless.
Trying to score political points and public relations victories by comparing the highest retail list prices researchers can find with a price in a country with a much smaller market and strict price controls in order for a product to be sold in that country is a common practice, but it is utter nonsense. Unless, of course, the proponent of such an argument acknowledges what they are really advocating for: price controls. Manufacturers of any product understand the dynamics of market size, political systems, regulatory regimes and many other factors go into the price and availability of a product in various markets. Requiring manufacturers to report prices they achieve in other countries for the purpose of direct comparison to ours is the stalking horse for a price control policy most Americans reject outright. Policymakers at the state and federal level should understand the comparison is irrelevant and reject it, too.
Latest posts by Joe Trauger (see all)
- Protecting Intellectual Property and Proprietary Information Key for Manufacturers - January 15, 2016
- Other Countries’ Drug Prices Are Irrelevant - October 29, 2015
- So-Called Drug Transparency Legislation in States Doesn’t Help Patients - October 27, 2015