If you run the numbers on health care services inflation, you see that it ran just a touch above core inflation until a few years after Medicare passage, when Medicare was fully implemented. After that, health care inflation runs approximately double core inflation. Medicare took a huge percentage of the nation’s total health care spending and removed it from free market price controls, thus creating a statistical increase in the % by which health care inflation exceeds core inflation.

Companies charge outrageous prices for health products because they have a captive market. The US, thanks to lobbying efforts by various corporations, has extended patent laws to a point where nobody can make generics for competition to bring down prices.

I don’t disagree; at this point, very few elements in the “system” have any competitive pressures on them at all. And I COMPETELY agree with you on the patent law issue. My sense is that if you want to bring down drug prices, start the clock on patent protection when the drug is first sold, instead of starting the clock on patent grant. This would give the company more time to recover their R&D costs and turn a profit on the drug, instead of having to cram all that profit into a small number of years until the generics can get their hands on the formula.

Two recent examples lay bare the profit motives of these corporations; the EpiPen debacle where the price jumped to 600 dollars, and the whole Martin Shkreli uproar where he took a cheap, lifesaving drug and inflated its cost by 5000%.


I don’t begrudge them making some profit in the system the US currently has, but price increases like that are absurd. The cost for health care delivery in the US is absurd, and not due to government regulation, but to profit motives.

It’s not an “either/or” as you’ve said. Often, it’s the regulations which force the companies into a situation where it’s “whatever the market will bear” and execute on these reprehensible price increases. And when the market is insured……..yes, it’s not a pretty picture.

Data Driven Econophile. Muslim, USA born. Been “woke” 2x: 1st, when I realized the world isn’t fair; 2nd, when I realized the “woke” people are full of shit.

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