In general, the interaction of drug insurance with monopoly pricing creates potentially huge distortions in both drug development and drug use, reinforcing the case for bargaining. Finally, it’s a global market – which means that much of the consumer surplus from drug development accrues to foreigners, not U.S. citizens. Maybe there should be more drug development from the point of view of global welfare. Funny how Trump is America first on everything, except when a nationalist position might be bad for Big Pharma. I’m aware that simply saying “let’s bargain over drug prices” isn’t effective unless coupled with a willingness to say no – to tell a drug company that an overpriced drug will be excluded from the formulary.

Source: New York Times May 12, 2018 21:22 UTC