The Free Market Solution
The FDA pretends that its regulations protect Americans, yet studies published in establishment medical journals document that regulated drugs are a leading cause of death in the US.30,31
Table 1 shows the astounding price decreases of dietary supplements after their deregulation. We state unequivocally that if Congress took the bold initiative of deregulating prescription drugs, their costs would fall even more dramatically than did the costs of dietary supplements.
The reason is that it costs more to extract nutrients from plants and to synthesize vitamins and amino acids than it does to make most synthetic drugs. In a deregulated environment, prescription drug prices would drop to such low levels that cost would no longer be an issue.
As you can see in Table 2, the cost of the active ingredients in prescription drugs is so low that anyone could afford them in a deregulated environment.
Cynics say drug companies need this money to develop better drugs. This argument rings hollow when one realizes that the costs of even FDA-regulated generic drugs are excessive.
The facts are that regulation and artificially high prices have created an environment in which innovation is a distant second to marketing, political lobbying, campaign contributions, bloated administrative budgets, etc. If prescription drugs had to compete in a deregulated free market, companies would be forced to develop better products because the FDA would not be delaying competing products for years or decades at it does now.
In a free market, the better-quality, lower-priced products rise to the top while inferior and overpriced products sink into oblivion. In today’s upside-down regulatory environment, less effective but heavily marketed drugs outsell superior medications.32,33
Large pharmaceutical companies have grown accustomed to multibillion-dollar blockbuster drugs that have 17-20 years of patent protection. Enormous resources are devoted to marketing these drugs. Even when the patent expires, drug companies often allocate considerable financial resources to litigating against potential generic competitors, paying generic companies not to compete, and taking other steps to delay generic competition. None of these shenanigans could occur in a deregulated market where any company could compete on a level playing field.