Price Gouging by Drug Manufacturers

Don McCanne of PNHP comments here on the article in the Boston Globe about why the cost of naloxone, which is used to reverse heroin overdoses, has skyrocketed since former governor Deval Patrick declared a public health emergency a year ago.

Comment by Don McCanne

Drug manufacturers recently have been engaged in outrageous pricing
practices for essential drugs that they produce - the hepatitis C drugs
being an egregious example.

Narcan - a crucial life saving drug that reverses narcotic overdoses - now
has much wider distribution since it has become available to first
responders. The manufacturer - Amphastar Pharmaceuticals - in what has to
be more than a mere coincidence, chose this time to sharply increase the
price of this drug.

When the market is dysfunctional, it is the responsibility of government to
intervene. The United States has shirked its responsibility. We need to
revise our approach.

A single payer national health program functions as a monopsony - a single
purchaser of products and services. In private markets, monopsonistic
pricing can be as evil as monopolistic pricing like the example of Narcan.
The difference with a government monopsony is that it gets pricing right -
an adequate price to be sure that products and services remain available,
yet at a price that does not gouge the taxpayers who fund the system.