Courtesy of Ezra Klein, Bill Clinton identifies an obvious way to reduce health care costs:
CLINTON: The McKenzie Study done a couple of years ago said that we pay $66 billion a year more for medicine and that at least our older populations consume relatively less per capita than other wealthy countries.
There is a very simple answer to this, which is that we have made a bargain with our pharmaceutical companies. We've said to them for decades now, we love having you in America. We're proud of you. We know you have to spend a lot of money on research and then you market the drugs and all.
So we will eat your research and development costs in American prices so that you can sell exactly the same drugs you sell to us for less money in Canada and Europe.
Even our -- for example, our AIDS clinic down the street here in Harlem, the taxpayers pay $10,000 a year to treat people with the big pharmaceutical companies' AIDS medicine. That medicine costs about $3,500 a year in Canada and Europe -- countries with per capita incomes as high as America.
Now, if we're going to get out of that or move away from that to close some of that $66 billion window -- keep in mind, Europe has a lot of very successful drug companies and they don't do this.[...]
Meanwhile, we keep eating all these costs and countries just as wealthy as we are, are getting the same drugs made by the same people for less money, which is why there was so much opposition to allowing re-importation from Canada.
I -- what I recommend is let's don't pretend these drug companies are bad people. They've done a lot of good for us. But let's be honest that America is no longer so dominant over Canada and Europe and Japan that we can afford the whole subsidy. And let's -- the one good place to start is what President Obama has proposed, letting the federal government do what I do for AIDS drugs, letting them bargain.
I have two reactions. First, it's obvious that we ought to do this. We can't afford to keep spending an extra $66 billion a year to subsidize the pharmaceutical industry. Second, it's obvious that the pharmaceutical industry will fight this tooth and nail. We should be skeptical of the inevitable arguments that it's really in our interest to continue this subsidy.