Archive for November, 2006
The news just told me that Rep. Charles Rangel, Chairman-to-be of the House Ways & Means Committee, wants for the government to “negotiate” drug prices with pharmaceutical companies. Rangel thinks that drug prices are too high.
A negotiation entails bargaining with the purpose of reaching a mutually satisfactory agreement. In order to bargain, each party must have something the other side wants.
What does the government have that the producers of drugs want? Nothing that I can think of. The government’s “bargaining chip” is power, which means, ultimately, the exclusive right to use guns to enforce its will.
When Charlie Rangel says “negotiate,” he means something like, “lower your drug prices, and we (the government) will allow you to do some of what you want to do.” The — perhaps hidden — alternative entails the many ways government can make business difficult or impossible.
The word “negotiate” does not apply when one of the “parties” is the government. When it comes down to it, all the government has is a gun. It can use force to impose the will of government officials.
In other words, the government can force drug producers to lower their prices. Then, the government can blame the producers for the inevitable result of such price controls, shortages of the drugs that are now so cheap.