The $750 Pill and the Shackles of Serfdom


This week’s health policy news roundup curated by Jane Orient, M.D.

How can the price of a pill leap from $13.50 to $750? Only because of third-party payment, writes Charles Hugh Smith. It’s time to consider the impossible—cash payment, which he wrote about in 2009.

The government distorts the prescription drug market in a big way, explains Avik Roy. We pay for medicines: through the third-party purchase of third-party insurance. “Not only are the vast majority of prescription drug costs paid for by a third party—either your health insurer or the government—but nearly 90 percent of us don’t buy insurance on our own; instead someone else buys it for us on our behalf.” Hillary Clinton’s proposal to cope with the enormous price increases is a “mish-mash of old policy mistakes.”

ObamaCare tightens the shackles of insurance, and its waste and cost increases continue to worsen. According to, the Affordable Care Act “reduces health care costs,” in part, “by … cracking down on waste, fraud, and abuse.” In fact, “Obamacare’s waste of taxpayers’ money has grown to epic levels. And there’s no sign the poorly managed program is improving,” writes Justin Haskin.

While health insurance premiums have increased by $5,000 since Obama promised to cut them by $2,500, deductibles have increased seven times faster than wages, according to a Kaiser Family Foundation study.

“Obamacare’s fiercest advocates have been quick to trumpet a purported slowdown in health spending and way too quick to assign Obamacare the credit for this,” writes Chris Conover. But “the slowdown began many years before Obamacare was ever enacted into law.” And, “more importantly, … the entire economy has slowed down thanks to Obamanomics, including worker wages.”

As states scramble to find ways to pay for the ObamaCare Medicaid expansion, Utah comes up with the well-worn concept of taxing the sick (in the guise of a “provider tax”).

One part of ObamaCare is working—in a way. The despised Cadillac tax is getting labor and management working together to decrease costs and try to avoid the tax. Getting it repealed is the goal, but it will be hard to find a way to replace the revenue it is expected to raise.

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