A Cure for Swelling Drug Prices: Competition

via Wall Street Journal

In a health care system notoriously resistant to cost-containment, generic drugs are an exception. Americans enjoy a huge range of generic medicines at-ever declining prices, largely thanks to robust competition among multiple manufacturers.

So how is it that the price of EpiPen, which treats severe allergic reactions, has jumped sixfold in eight years? Or the price of Daraprim, a half-century old, unpatented treatment for parasitic infections, was raised 50-fold after being acquired by Turing Pharmaceuticals AG last year?

As it happens, even among generics, business circumstances and regulation can conspire to give one supplier a monopoly it is happy to exploit. Ideally, this should be met not with price controls, but more competition—from home and abroad. If the U.S. allowed the sale of drugs that regulators in other advanced countries have already approved, it would expose would-be monopolists to many more potential competitors.

Read the full article here

About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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