Perverse Market Incentives Encourage High Prescription Drug Prices

Pharmacy benefit managers (PBMs) are the under-discussed market participants who manage prescription drug insurance for the vast majority of Americans. PBMs claim to be a lone bulwark against the rapacious pricing decisions of pharmaceutical firms, but is recent consolidation in the PBM market also a driver of high prices for prescription drugs?   

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Certificate of Need Laws Show Entry Barriers Can Raise Spending

In most states, health care providers who seek to open a new hospital must obtain a “certificate of need” (CON) from a state board certifying that there is an “economic necessity” for their services. A new working paper published by the Mercatus Center finds that states with CON laws spend 3 percent more on health care than other states.  

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