Today, Barack Obama bypassed your elected representatives in Congress to issue an imperial decree executive order giving the out-of-control Food & Drug Adminsitration even more power than it already wields:

President Obama ordered federal regulators Monday to step up efforts to prevent shortages … the order is intended to marshal the government’s regulatory and administrative powers to address the growing problem.

This executive order is not merely a crime against democracy, it puts the fox in charge of the hen house. The reality is that the FDA itself is responsible for most of the drug shortages we are currently experiencing:

If a shortage develops (because, say, the FDA shuts down a competitor’s plant), a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable production (producing a shortage drug earlier than planned) without FDA approval.

And where there are shortages there are government price controls. The federal 340B drug rebate program forces pharmaceutical companies to provide discounted drugs to certain hospitals and clinics:

Currently, the law requires drug companies to provide rebates of 23.1 percent for brand drugs; and 13 percent for generic drugs off of their average manufacturer’s price on qualifying outpatient drug use.

And ObamaCare makes things worse, of course,  by expanding the number of hospitals and clinics that are allowed to participate in the program. The hilariously titled “Affordable Care Act” will spread the wealth: 

In 2002, about 8,000 hospitals and clinics were in the program. By 2010 more than 14,457 were participating. The total number of eligible hospitals and clinics is now estimated at nearly 20,000.

So, there’s no mystery why we have drug shortages. When prices are kept artificially low, the number of suppliers willing and able to provide the commodity subject to such controls always shrinks—everytime.

So, what does our genius-in-chief do? He gives more power to the FDA, which will impose more price controls and compound that blunder by creating an even greater regulatory morass.

We must get rid of these morons in 2012.

Comments 1

  1. Galen of Old wrote:

    Wait a minute….

    I thought that the gov’t/congress expressly forbid the FDA/VA/DHS/Medicare/Medicaid from negotiating *any* discounts with big pharma; instead requiring Uncle Sam to pay full retail.

    Yet, your story claims Uncle is now *low-balling* Big Pharma and driving them into bankruptcy….

    I must have missed the memo….please connect the dots. When did this “federal 340B drug rebate program” kick in? Did it override the prohibition of Uncle negotiating prices???? Don’t we want Uncle getting the lowest possible price for medicine, just like the insurance companies?

    Posted 02 Nov 2011 at 6:45 pm

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