In 1993 and 1994 the pharmaceutical industry fought against nationalized health care. This time Big Pharma cut itself a deal—offering a bit of a discount in return for a big increase in insurance coverage and thus the number of pills expected to be sold. As a result, the pharmaceutical industry has become one of the strongest proponents of “reform.”
And Big Pharma’s financial reward is likely to be large.
Critics have complained that a drug industry got a sweetheart deal when it struck a bargain with the White House and Senate Finance Committee over health care reform.
There’s new reason to think those critics were right.
It comes from an October forecast by IMS Health, a respected global research and consulting firm. The report, which IMS distributed to clients and which a source provided, projects that the drug industry will see average annual growth of 3.5 percent between 2008 and 2013.
Back in March, IMS had projected no growth at all during that same five-year stretch. In fact, it projected the drug business would actually contract slightly—with negative annual growth of 0.01 percent.
What changed? A major factor, according to IMS, was the emerging details of health care reform.
It is yet another example of how the greatest enemies of capitalism tend to be the capitalists.
Only time will tell, however, whether proponents of government control will live up to the deal. Or whether they will turn on the industry as a convenient source of financial savings when spending skyrockets, as it will. If that happens, the rest of us should wave cheerfully as Big Pharma finds itself transported to the political guillotine.
Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).
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