Freedom Line Blog

We at CFIF have been emphasizing the threat posed by new drug price controls inexplicably contemplated by the Department of Health and Human Services (HHS).  In December, CFIF filed formal Comment opposing that ill-advised proposal, and hopefully wiser minds will prevail before the damage is done.  In similar vein, The Wall Street Journal ran a welcome commentary entitled “The Drug Price-Control Threat” on January 8 of this year, and a followup letter from reader Bruce Zessar of Highland Park, Illinois in today’s edition offers a personal, real-world illustration of what could be lost:

Insulin isn’t the same now as when it was discovered a century ago.  My wife is a Type I diabetic, diagnosed when she was 14 in 1980.  She has been a beneficiary of the tremendous advances in insulin therapy during the last four decades, including Lantus and Humalog.  When we got married in 1990, she had to live on a rigid schedule, eating lunch at, say, noon, and then dinner by 6:30-7:00 every day.  That’s becaue of the way prior insulin therapies worked in managing blood sugar.  With the invention of Lantus and Humalog, she can now live a normal life like everyone else.

Insulin is a shining example of why drugs deserve the utmost patent protection to encourage continual innovation.”

Price controls have never worked in any nation that has tried them, or with any commodity.   Few, if any, products are as important to our lives as America’s world-leading pharmaceutical sector, and we mustn’t let the price control scheme contemplated by the HHS kill the goose that continues to lay golden eggs.

There’s no exercise of government power quite as nauseating when seen up close as a relatively small industry’s attempts to team up with government and either (A) shake down or (B) close down a rival who has built a better mousetrap. In his book “Government’s End: Why Washington Stopped Working” (one of the best political reads of the past few decades, by the way) — a volume dedicated to this trend — Jonathan Rauch describes how Washington D.C. bike messengers, for instance, lobbied heavily against the use of fax machines in the nation’s capital, for no other reason than that they were bad for business (a stand reminiscent of Frederic Bastiat’s famous satirical letter to the French Parliament in which it was claimed that candlemakers were suffering unfair competition from the sun).

This trend is rearing its ugly head again in Washington D.C., where city government is trying to crack down on Uber, one of the great innovations of the smart phone era. Uber is a private car service operating in a handful of major cities that allows you to instantly request a sedan from your smart phone, have it arrive in minutes, and then have all of the billing (including the tip) taken care of straight from your credit card. Uber eliminates all of the inconveniences of the taxi experience (your humble correspondent, for instance, recently waited 45 minutes for a cab in Silicon Valley after being told by dispatchers that it was five minutes away) and usually does so at a cheaper price. And of course, D.C. can’t have that! From the Daily Caller:

Members of the Washington, D.C. City Council haven’t given up on their efforts to bring the efficient and reliable luxury sedan-on-call service, Uber, under the authority of the company’s competitors in the taxicab industry.

Council members previously tried to establish a price floor for the company. More recently, at a July 10 meeting, a number of City Council members voted to bring the sedan service under the authority of the D.C. Taxicab Commission, a regulatory body strongly influenced by the taxi industry.

…

“I was opposed to them not being regulated, period,” councilman and former D.C. Mayor Marion Barry told The Daily Caller. “This was a compromise. I think if it’s not a regulated service, it really has an impact on the D.C. taxi industry.”

Of course it has an impact! That’s generally what happens when someone decides to build a company that can deliver a better product at a lower price.

Let’s hope Uber can resist the legislative strong-arming. At least they have this going for them: there are few inadvertent blessings as sweet as having Marion Barry be your chief antagonist.