The Line Between Savvy and Che

Written by Tron Simpson on December 14, 2018

Health and Human Services Sec. Alex Azar may want to crane his neck to check who’s still following his lead these days.

Overcompensating for alleged conflicts of interest, the former drug executive has improbably launched the most scorched-earth campaign against pharmaceutical drug companies in recent memory, wielding rhetoric with all the subtlety of his boss’s immigration outbursts to lay blame at the feet of pharma both for high drug prices, and low drug prices, as well.

Azar launched his bureaucratic blitzkrieg in mid-October, a wide grin on his face as he launched a plan to force drug companies to specify the “list price” of drugs in television commercials.

In the ranks of shambolic regulatory ventures, this one’s in the 99th percentile. Most importantly it’s an obviously unconstitutional and unprecedented incursion against free speech. And remember, the list price of a drug is simply meaningless because the vast majority of patients pay a much lower rate negotiated by their insurance plans.

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Azar, as a former drug executive, is aware. Nevertheless, he stormed ahead anyway, retorting on CNBC with spin worthy of Slick Willy himself: “Almost every senior pays either the list price or a percent of list price, on at least some of their drugs.” A percent! One also pays a percent of a hundred trillion dollars for a 5-cent bubblegum piece; a small one (0.00000000000005%).

I’m not buying the talking point that list prices don’t matter, they DO matter,” he said, pointing his finger emphatically but coming off less William Wallace than Michael Scott. As a political prop for a man insecure about his standing with the boss, they do!

Azar’s next seemingly leftist move was to link Medicare payments to a “price index” composed entirely of the rates socialist European single-payer states deign to pay the American companies that invented the lifesaving medicines they now declare their right.

“Price index” is a misnomer–it’s a price control index since none of the rates it’s based on are set by a market. The relatively free-functioning U.S. drug market is one of the worlds’ last remaining hopes in continuing the pace of innovation in medicine, and American firms invent roughly 10x the number of new, lifesaving medicines of other Western nations.

Azar linked this socialist proposal with a new set of talking points that we might dub the Azar doctrine of international drug pricing: namely, the drug companies were asking for it.

Socialist single-payer states that can’t otherwise afford the newest medicines put a choice to U.S. manufacturers: sell it on the cheap, or we’ll just steal it from you. Most companies understandably oblige; participating in the international trade equivalent of highway robbery for lack of a better option. The U.S. government, as is the norm, sits on its hands.

But who is to blame for this state of affairs? Why the drug companies, Azar argues! They should set foreign prices “more in line with U.S. prices.” It’s on American companies to stop “foreign freeloading,” and to ensure they do, Medicare is going to join the looting with gusto, setting our prices to whatever the Brussels people are doing.

It was around this juncture that Azar, after several weeks spent behind his spectacles cartoonishly trying to imitate his boss, began to notice the unexpected guests arriving at his pharma-bashing party.

Socialist Sen. Bernie Sanders (I-VT) convened the Capitol press corps for a grand announcement: he would be introducing Azar’s pet price control index policy as stand-alone legislation, and expanding it, dramatically!

Sanders’ bill included some signature innovations, of course. One notable inclusion is in the bill’s Section 2, which authorizes the HHS Secretary to unilaterally deem a given drug as having an “excessive” price, upon which its patent protection, on the basis of which private citizens paid $3 billion to invent a lifesaving medicine humanity will benefit from for the rest of time, is immediately and permanently revoked,

The bill includes several criteria by which the secretary may label a price “excessive,” but ends with the biggest legal loop hole since Liar Liar: a price may be found excessive for “other factors the Secretary determines appropriate.”

In the courts, lawyers battle over whether new regulations are “arbitrary and capricious,” the standard set by a long-ago Supreme Court case. Except for this bill, the secretary is explicitly authorized to use whatever he wants to steamroll the evil people who invented a new medicine we want for free.

The pill is green? Excessive! The CEO drives a Ferrari? Excessive! It’s Wednesday? Excessive! Any excuse will do.

More importantly, there’s a fine line in Trump’s populist rhetoric. Concerning his official policy actions, Trump’s populism is rooted in a larger policy and philosophical framework that’s undeniably pro-free market all day long.

No, it’s not as easy as it looks. Azar has long since crossed the line from savvy dealmaker to Che Guevera t-shirt wearing, historically and economically illiterate left-winger, willing to trample over facts, logic and principles to spice up his cable hits.

Time for the adults in the administration to intervene.

Tron Simpson is host of the nationally recognized Tron Simpson Show, heard on KVOR 740 AM in Colorado Springs, Colorado. Find out more at www.tronshow.com.

 

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