Free markets work, not price controls

The American Press

When there are price fluctuations in the free market system, government is sometimes tempted to step in and control prices. But government control of prices is a simplistic solution to a complex problem that history tells us rarely works economically.

A recent example of the turmoil government price controls cause is the state of Maryland imposing price controls to drive down drug costs.

Maryland legislators based their law on ambiguous terms such as “price gouging,” “excessive” and “not justified.” However, The Association for Accessible Medicines (AAM), which is a trade group for generic drug manufacturers, challenged the law and recently the U.S. 4th Circuit Court of Appeals ruled that the Maryland law is unconstitutional because it violates the Commerce Clause of the U.S. Constitution.

The court noted that the law is triggered by conduct that occurs outside of Maryland, and it gives the state attorney general the power to substitute his  judgment for the free market. And if similar laws were passed by other states, it would impose a significant burden on interstate commerce. The government reform group, Citizens Against Government Waste, hailed the decision as “prudent” and a “strong message to other state legislatures across the country not to pursue similar legislation.”

The CAGW pointed out, “Another important lesson about this law is that price  controls are never the answer to lowering costs. Anyone who was in their late teens or older in the 1970s felt the repercussions of the Nixon administration’s efforts to control inflation by instituting price controls. Americans experienced higher prices in grocery stores, long lines at gas pumps, market distortions, and shortages across a spectrum of products.”

The generic drug industry is already bringing prices down on many drugs through free market competition. But government intervention tends to make their efforts more difficult. CAGW also recommends that Congress continue to make the Federal Drum Administration reduce its backlog of 4,158 abbreviated new drug applications (ANDAs) by generic manufacturers.

Our third president, Thomas Jefferson, spoke wisely when he said, “That government is best which governs least.” In this case, the Maryland legislators should let the free market work, as it usually does, by driving the prices down through competition.

Local News

Pair has passion for civic engagement

Local News

Nonprofit director to retire: Hickman has worked for BArc for 39 years

Local News

Christian Youth Theater opens season with ‘Adam’s Family’

Jim Beam

Jim Beam column:Let health experts call shots

high-school Football

Jennings High comes to aid of former foe

Local News

Victims of Ida get glimpse of journey ahead

Local News

Support workers not pleased with supplemental pay plan in Jeff Davis

Local News

Only a fraction of funding reimbursed to Cameron by FEMA

Local News

15 child deaths attributed to COVID in La.

Local News

School Board extends COVID-related sick leave policy

Local News

Kind Vibes Only: CPSO hosts one-mile anti-bullying walk

Local News

Sowela rolls out fifth annual Flying Tigers Car Show

Local News

Parents urge Jeff Davis School Board to oppose any vaccine mandate

Local News

City hiring two agencies to help with disaster recovery financial advocacy

Crime

Man arrested in Monday shooting near McNeese campus

Jim Beam

Jim Beam column:State’s election system secure

Local News

Transfer of Mallard Cove Golf Course to Chennault complete

Local News

Maplewood schools will remain closed Thursday

Local News

Kinder Future Farmers of America collect, deliver fuel to Lafourche Parish

Local Business News

Disaster assistance request for SW La. makes it to budget

Local Business News

Area LyondellBasell plant receives ISCC PLUS certification

Local Business News

When it comes to headwear, Anne Monlezun and Kevin Mattingly have got you covered

Local Business News

Elizabeth Jimney column: Building a website that works for you

Local Business News

Names in the News: People shaping the future of Lake Area business