Denninger on Price-Fixing In the Drug Marketplace

All Karl below:

Time to stop being nice.

America, you’re being raped.  Flat-out raped.

15 USC Chapter 1 makes clear that price-fixing is illegal.  When it comes to drugs, which are physical commodities, Robinson-Patman (15 USC Chapter 1, Section 13) also makes discriminatory pricing illegal for buyers of like kind and quantity.

(a) Price; selection of customers It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them

It is illegal for a pharmacy to charge you $10 for a drug and someone else $100.  Or, for that matter, to charge one person $2.15 million and another a $100 copay.

It is illegal for a hospital to do the same thing.

Things like “GoodRX” and similar are flat out facial violations of the law.

So are “varying” co-pays for the same drug in the same quantity.

So, for that matter, are bribes on a differential basis for the same thing (Section 13 c, d and e)

So, for that matter, are inducing such practices or benefiting from same (Section 13 f)

An insurance company is never a consumer of the drug.  A person is.  Such practices as conspiring with pharmacies and hospitals to vary the price you pay is illegal and has been since the 1930s.

Never mind the first few Sections of 15 USC Chapter 1 which make any scheme to fix prices or lessen competition irrespective of upon whom the price injury falls, or even whether it occurs (proof of same is not required in the statute) a criminal, 10 year in prison, felony.

Drug prices in particular, since drugs are commodities, fall under Robinson-Patman.  There is no exception found in the statutes for drugs.

Source: Prison Or Gallows: Pick One – The Market Ticker

Well worth your time to read the whole thing.

Steve Parker, M.D.

Steve Parker MD, Advanced Mediterranean Diet

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