1 year ago

Controlling the price of drugs

Can the government lower the price of prescription drugs? The effects of price ceilings provide a cautionary warning, even though price controls appear to work in other countries. Unfettered competition generally provides a more effective way to keep prices in line with costs.

Several government efforts seek to lower drug prices. The Trump Administration has proposed basing Medicare Part B prices on international prices. The Department of Health and Human Services found that the U.S. had the highest average price for 27 drugs, almost double the international average. Forty six states are suing 15 generic drug makers for price fixing. Senator Elizabeth Warren wants the Federal government to manufacture generic drugs to eliminate profit-seeking.

Price ceilings demonstrate government’s rather limited ability to reduce prices and ensure adequate supplies. A price ceiling is a legal maximum price for a good. For instance, a law might set a maximum price for gasoline at say $2 a gallon and prosecute anyone selling for more. Would this ensure drivers reasonably priced gas?

Not really. Market transactions require a willing buyer and seller. Businesses aren’t charities and will not operate at a loss. While occasionally businesses sell at a loss, they must normally expect to cover costs.

A price ceiling does not require any firm to sell. If the wholesale price of gasoline were $2.50, a station facing a $2 price ceiling will shut down. Price ceilings set below the market price produce shortages, meaning that some consumers will go without.

Price ceilings have long been popular with emperors and legislatures, as Forty Centuries of Wage and Price Controls details. Price controls were included in ancient Babylon’s Code of Hammurabi and contributed to the suffering of George Washington’s army at Valley Forge. A lower legal price appears to benefit consumers but does not make the good available.

Pharmaceutical companies charge more than $10,000 a month for some cancer drugs. To the extent that such prices reflect costs of research, development and manufacture, setting a $5,000 legal maximum price will reduce the quantity of drugs available. A shortage of life-saving drugs costs lives.

The development and approval process accounts for much of the cost of drugs. According to Tufts University’s Center for the Study of Drug Development, the development costs for drugs that reach the market are $2.6 billion. The cost of manufacturing many drugs is often low. Price controls may not prevent sales of already developed drugs, but rather reduce development of new drugs.

If price controls are generally ineffective, why do other countries pay less for prescription drugs than we do? Restrictions on importation allow the same drug to sell at different prices in different countries. If a company sells at a price covering most of the development cost on the U.S. market, it could accept a lower price in Europe. This makes price ceilings appear effective. Yet someone must pay for development costs. If we match other nations’ low prices, we may not have future wonder drugs.

Instead of resorting to price controls or litigation, I think we should try more competition. Let’s let pharmaceutical companies undercut each other’s prices in the pursuit of profit.

Two sets of policies currently limit competition. One is patents for medicines. Patents grant inventors a temporary monopoly to allow them to earn back the costs of research and development. The second is the Food and Drug Administration’s (FDA) approval, which requires demonstration of a new drug’s safety and effectiveness. Limiting competition facilitates price fixing as well.

Limited competition in generic drugs, whose patents have expired, illustrates the vulnerability of government rules to manipulation for profit. Generic drugs copy successful drugs and are clearly safe and effective, yet the FDA’s approval process limits the number of producers. Smart and greedy companies profit by manipulating the rules, like finding generics without approved alternative producers and raising the price.

More government regulation will not end the profitable manipulation of government rules, it will only create more rules to manipulate. Streamlining the patent and drug approval processes offers a better path to a steady supply of reasonably priced pharmaceuticals.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University.

1 hour ago

Pringle: Heterosexual, Southern, conservative Christians blamed for ‘every wrong in society’

State Rep. Chris Pringle (R-Mobile) is out with a second television ad in his Republican bid for Alabama’s First Congressional District seat, and, like his first TV ad, the latest spot does not shy away from being different.

The new ad lasts 30 seconds and features Pringle speaking into the camera for all but the closing snippet at the very end that contains a mandatory disclaimer.

“I’m Chris Pringle,” he says to open. “These days, if you look like me and believe like me, every wrong in society is your fault.”

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“If you’re straight, Southern, conservative and, heaven forbid, Christian, they call you a racist and blame you for everyone else’s problems,” he continues. “Maybe I’m not supposed to say that, but someone has to.”

“I’m Chris Pringle, and I approve this message because saving this country means keeping the radical left from killing it,” the candidate concludes.

Watch:

In a statement to Yellowhammer News, he commented, “South Alabama deserves a leader who will put our conservative principles above political correctness, and who won’t concede an inch to radical leftists trying to destroy our way of life.”

Pringle is running in a competitive GOP primary field on March 3 that also includes former State Sen. Bill Hightower (R-Mobile) and Mobile County Commissioner Jerry Carl.

This latest ad comes as Pringle pushes to get his “Gender is Real Legislative” (GIRL) Act passed in the Alabama legislature. The bill would require public schools to make sure every entrant in an athletic competition is sorted by the gender on their birth certificate. The bill also forbids any state, county or municipal government/agency from providing a facility to a single-gender competition that allows a transgender entrant. The GIRL Act exempts any event that is specifically designed to have both boys and girls as competitors.

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn

14 hours ago

UA Dance Marathon raises over $307,000 for Children’s Miracle Network

The University of Alabama Dance Marathon (UADM) announced Monday that it raised $307,843.20 for Children’s of Alabama during its most recent fundraiser, which takes place annually.

The total raised was presented during the organization’s recent BAMAthon event, the organization’s 13.1-hour dance marathon. Over the course of nine years at the University of Alabama, more than $1.6 million has been raised for the Children’s Miracle Network Hospital in Birmingham.

Current and former patients of Children’s of Alabama, referred to as “Miracle Kids,” attended the event to share their stories with those participating in the event.

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For the parents of Brayden Butler, “known to friends and family as B.B., a 13-year-old Miracle Kid from Chelsea who suffered a traumatic brain injury in 2014, UADM represents a place of belonging and an opportunity to find hope and healing.”

“B.B. deals with challenges due to his disability,” said Christie Butler, Brayden’s mother. “UADM has shown B.B. that there is a bigger purpose out there. It gives him a platform to reach others about all the good things that come from Children’s of Alabama.”

Lily Klootwyk, president of UADM 2020, offered her thanks to those who helped raise money and produce the event.

“UADM is a special organization full of people who are going to change this world,” Klootwyk said. “We’ve accomplished nothing alone and everything together.”

Kyle Morris also contributes daily to Breitbart News. You can follow him on Twitter @RealKyleMorris.

14 hours ago

Alabama Realtors Association announces primary endorsements

The political arm of the Alabama Association of Realtors on Monday announced its endorsement of candidates for Alabama’s upcoming March 3 primary elections.

The list of Alabama Realtors Political Action Committee (ARPAC) endorsements includes candidates respectively for the Public Service Commission, Supreme Court and Courts of both Civil and Criminal Appeals. Further, the National Association of Realtors PAC has announced endorsements in each of the state’s seven U.S. House districts. According to a release, all the announced candidates endorsed exhibited a commitment to home ownership, private property rights and economic growth.

“The real estate industry and Alabama’s economy are dependent upon each other to remain healthy and thriving,” stated Forrest Meadows, ARPAC trustees chair. “We look for candidates who understand the relationship between the two, and share the REALTOR® vision of protecting private property owners against harmful legislation and fighting for policies that will aid in the development of prosperous communities and businesses across the state.”

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“We feel strongly that these candidates will work hard to ensure private property rights remain a top priority and support efforts for economic growth and homeownership in Alabama,” added Jeremy Walker, Alabama Association of Realtors CEO.

ARPAC endorsements as follows:

For president of the Alabama Public Service Commission:

Twinkle Andress Cavanaugh

For Alabama Supreme Court Place 2 Associate Justice:

Brad Mendheim

For Alabama Court of Civil Appeals:

Place 1: Bill Thompson
Place 2: Matt Fridy

For Alabama Court of Criminal Appeals:

Place 1: Mary Windom
Place 2: Beth Kellum

The National Association of Realtors endorsed the following congressional candidates:

U.S. House of Representatives, District 1: Chris Pringle
U.S. House of Representatives, District 2: Jeff Coleman
U.S. House of Representatives, District 3: Mike Rogers
U.S. House of Representatives, District 4: Robert Aderholt
U.S. House of Representatives, District 5: Mo Brooks
U.S. House of Representatives, District 6: Gary Palmer
U.S. House of Representatives, District 7: Terri Sewell

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn

15 hours ago

Did Tuberville really say government handouts for illegal aliens are ‘Donald Trump’s fault’?

On Monday, a national news outlet shared a truncated clip from a 2019 speech by Tommy Tuberville that makes it seem like the U.S. Senate candidate and former Auburn University head football coach blamed President Donald Trump for illegal aliens receiving free government handouts.

The speech in question was first reported on by Yellowhammer News way back in August. National outlets at the time jumped on Tuberville’s comments, because he did indeed ding Trump for what Tuberville viewed as a lack of progress when it comes to the state of veterans’ healthcare in the United States.

However, a reporter from Breitbart News on Monday posted an isolated audio clip from that speech, alleging that Tuberville was focusing his criticism of the president on immigration. The headline read, “Tommy Tuberville in Unearthed Remarks: ‘We’re Paying for Illegals to Come Over Here … That’s Donald Trump’s Fault.’” The article also claimed that the remarks were “previously not reported on.”

Here’s the full part of Tuberville’s speech in question:

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I’m pissed off at Donald Trump that our vets can’t get health care. And if I ever get to see him, I’m going to tell him that. You said you were going to fix it and it ain’t fixed. And that’s who we ought to be taking care of — these young men and women. I’ve had them come up to me and cry. ‘Coach, we can’t get health care. Nobody will take care of us.’ 22 vets every day – every day are committing suicide. We can’t take care of them. We won’t take care of them. We’re paying for illegals to come over here – everything they’re getting: cell phones, health care, everything they want. That’s Donald Trump’s fault. That’s his fault. He’s got to get it done. That’s one of the most important things I think we need to do because we send young men and women over to fight for us, put their life on the line and we don’t take care of them? What are we doing? What are we doing?

I’m a Donald Trump guy, but there are things that he hasn’t done yet that we got to get done. And I think he’s had to fight every battle by himself. He can’t get to all of them because nobody is helping him. Nobody is standing up for him.

And here’s the audio snippet from that speech released on Monday:

This same reporter has hit Tuberville on the immigration issue in the past, and the latest article comes on the heels of Congressman Bradley Byrne (AL-01), one of Tuberville’s GOP opponents, releasing a television ad accusing the former coach of supporting “amnesty.” Tuberville contends that his comments referenced in the Byrne ad were focused on legal immigration, rather than amnesty for illegal aliens. Tuberville has forcefully denied being for amnesty.

Reacting to the latest Breitbart piece on Monday, Tuberville commented in a statement to Yellowhammer News, “The Tuberville plan to fight illegal immigration mirrors everything Donald Trump has said on the issue. We’ve got to close our borders, protect American jobs, stop illegal drugs, and block terrorists from sneaking into our country.”

“The Trump administration believes we must prioritize skilled workers who apply to come here legally so they can do the jobs that Americans just don’t want to do,” he continued. “I’m simply backing President Trump’s policy…just like I’ll do in Washington.”

The primary will be held March 3, just 15 days away. Tuberville and Byrne are likely competing among each other and former U.S. Attorney General Jeff Sessions for two runoff spots for the GOP nomination to face U.S. Senator Doug Jones (D-AL) in November.

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn

15 hours ago

It’s time for Alabama legislators to end the wasteful practices of subsidizing newspapers to print public notices

Every year, Alabama’s various governments are required by law to take tax dollars collected from their citizens and hand them over to print newspapers to comply with public notice laws.

These laws force these entities to notify the public of matters facing them through the pages of these newspapers. There are no other options.

Local city governments? Yep.

Local boards of education? Yep.

State agencies? Yep.

With each of these requirements, a private entity is subsidized by tax dollars for a service that no one actually uses. To say this is a scam is an understatement.

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Current Alabama law requires government entities in Alabama to advertise and pay for legal notices, legislation, constitutional amendments, voter rolls and other public matters in the local print media outlets.

As I have pointed out before, this is not chump change.

  • The City of Huntsville spends up to $115,000 each year.
  • Madison County spends up to $153,000 each year.

The real cost across the state is clearly into the multiple millions of dollars range.

Last week, Madison County Commission Chairman Dale Strong appeared on WVNN’s “The Dale Jackson Show” and explained that Madison County alone was forced to pay $75,000 to Alabama Media Group, the parent company of AL.com, which runs a sports blog with a liberal bias.

For what? A 112-page list of voters.

Strong says he knows no one is reading this list to see if they are eligible to vote.

“You’re printing a 112-page document that will be used to light fires in people’s burn pits,” he explained. “People don’t even look at it, they throw it in the garbage can.”

The Secretary of State’s Office has a phone number and a website where people can see if they are eligible to vote, so this is all completely unnecessary.

Keep in mind, this is one county. All 67 counties in the state had to pay for this “service,” and they all know it is a waste of their resources.

Strong noted, “I promise you $75,000 practically every two years over 10 years, that’s $375,000, and I can tell you Madison County has a bunch of needs that money could go toward a lot more beneficial than a list.”

But it doesn’t have to be this way. Multiple lawmakers have attempted to cut in on these legal notices over the years, with little success.

State Representative Andrew Sorrell (R-Muscle Shoals) tried last year. He said in 2019, “I think it’s really hard to make a case in Alabama that we need more taxes while we are not spending the money we have in an efficient manner.”

Sorrell is trying again this year:

Relating to public notices; to provide for electronic publication of public notices on a public notice website operated by the Secretary of State; to provide for fees for publication; to allow counties and municipalities to opt out under certain conditions; and to provide for delivery of public notices to the Secretary of State for publication on the public notice website.

Secretary of State John Merrill is all in on supporting this bill.

My takeaway:

The same challenges that came up in 2019 will come up again in 2019. No one wants to fight the newspapers on this because they know the newspapers will fight back.

We all know the old saying: “Never pick a fight with someone who buys ink by the barrel.”

But it is time to pick this fight. The status quo is a scam that gives tax dollars to newspapers and citizens get little in return. It is time for other legislators to join him and get this done.

Listen:

Dale Jackson is a contributing writer to Yellowhammer News and hosts a talk show from 7-11 am weekdays on WVNN.