Being happy about improved negotiations between pharmaceutical companies and the United States government might be on the same level as appreciating a particularly deep green tone on a decaying limb, but given the level of government we are accustomed to living in, I dare call this cause for hope. Massachusetts Legislators approved a change in the law this summer that is intended to reduce drug costs in the state Medicaid program, or MassHealth, by negotiating discounts directly with drug companies. As previously written about, pharmaceutical price increases outpace inflation by multiples partially due to the lack of negotiations between pharmaceutical companies and state programs.
Digging deeper into the legislation, we see that unsuccessful negotiations would lead to the publication of a “target value” for a specific drug, a public hearing, an analysis by the Health Policy Commission, as well as the ability to request research and development costs that would remain out of the public view. While my libertarian instincts are to be sickened by such government intrusion into a private company, few industries have done more to monetize on the already existing and ineffective entanglement between insurance providers and government. As long as public or private insurance intentionally positions itself between the individual negotiating directly with a seller, creating an artificial environment where free-market influences do not exist and maintain fairness, all we can do is be happy when our nanny state is a slightly better nanny.