Stanley’s Snake Oil…it can do most anything. A magical elixir to cure all ills and clean every stain in one bottle. The days of the “Snake Oil” salesman may be gone, but believe me the “Snake Oil” is still being sold.
America has a long history of unscrupulous entrepreneurs profiting from worthless, or even harmful medicines. The phrase “Snake Oil Salesman” is now a societally accepted pejorative to describe a charlatan that peddles ineffective and essentially fraudulent products. Sometimes it’s not outright illegal, but it’s wrong nonetheless. The saying originated from “Stanley’s Snake Oil,” a popular medicine that achieved instant infamy when the government finally tested it in 1917. Surprise, surprise, it contained only mineral oil, turpentine and no snake content whatsoever.
This type of thing didn’t disappear with time, it just changed clothes. Have you ever watched late night infomercials? Did you know that every year millions of sharks are harvested to produce cartilage pills because of a mistaken belief that sharks are somehow immune to cancer? Scientists published conclusive evidence that sharks do get cancer in 2004, but the pill makers still kill millions of them every year because of this surprisingly persistent myth. They are literally selling “Shark Oil” pills.
Our current “Snake Oil Salesman” don’t wear white suits and stand on the street corner, but they are just as brazen in their dishonesty. The current masters of this time honored trade usually come with a (D) or an (R) behind their name. Our modern politicians are better known for their “spin” on whatever situation they are trying to manipulate. The “spin” is deceptive and many times just as obvious as the “Snake Oil Salesman” of old.
It’s usually a tip off that the BS is flowing when a politician wants the government to take over control of something. Generally, that is a sign to run the other way. It’s frustrating because politicians are so pious about their lies that is hard to stand up to it, but here is a chance. Socialist Sen. Bernie Sanders (D-VT), has been enjoying consistent applause at his rallies by promising that the government would take over the drug industry and start negotiating on behalf of the people. Even Donald Trump has taken part a bit, claiming that the government could save more than it even spends in the first place…of course only if The Donald was doing the negotiating.
The Congressional Budget Office – the world’s foremost expert on the budgetary impacts of policy proposals, said the proposal would provide “negligible” savings.
Negligible, as in, “so small or unimportant as to be not worth considering.”
Even the Obama administration, the inventor of jobs “created or saved” and countless other accounting gimmickry to goose the stats they put out, included drug “negotiation” in the president’s 2017 budget, but estimated it would produce zero savings.
Zero, as in, none.
So why do politicians continue to peddle this snake oil?
Because polls show it is a myth that is overwhelmingly popular. People seem to think the government will negotiate honestly on their behalf, regardless of the fact that there is no precedent of that ever happening before.
The truth is, the government can’t honestly negotiate drug prices. They are playing too many sides of the game. The results are actually harmful and counterproductive. It’s like a lawyer representing both sides…it can’t honestly be done.
The federal government isn’t a normal market participant like insurance companies or pharmacy benefit managers and other private entities with a financial stake in this. For example, a government agency, the FDA, decides whether the drugs are safe to come on the market. There is a corruptible lack of separation there. You can’t trust them to honestly vet the drug if they are looking to benefit from its sale.
Also, the patients who utilize Medicare and Medicaid, aren’t like the patients on an insurance plan. They can’t just leave and purchase some other plan, or change jobs to work for an employer that offers a better plan. They’re either on Medicare or they’re paying for their own health care, which is technically a choice, but definitely not one that many people would opt to take.
Medicare and government entities are radically different from other market participants. They have undue power over the drug companies and nearly zero accountability to their patients. When a bureaucrat theoretically saves money for the taxpayer, it’s not the same as profit. It’s fake. It’s illusionary. It’s SNAKE OIL!
The government is uniquely ill-suited to “negotiate” drug prices. Governments have done this in many places around the world and the result is not savings: it’s rationing and actually higher drug costs.
Germany and France, both spend a greater percentage on drugs than the U.S., because the bureaucrats decide what the government will or will not pay for. That removes the Doctor from his position of doing what is best for his patient. The government now decides, not Doctor. In many cases, the more expensive drugs are more effective. Doctors end up prescribing alternative, less effective drugs in greater quantities due to government “negotiated” deals.
The “Snake Oil Salesmen” of Medicare know all this stuff, but they don’t care. They need to be able to negotiate the back room deals with the big drug companies to maximize their profit.
These politicians have found the policy equivalent of “sharks don’t get cancer” and they’re running with it. It’s cynical and wrong, and they ought to be ashamed. In the meantime, lets help end this ridiculous myth once and for all. Truly free markets are the only way to provide the highest quality drugs at the best prices, but we’re still being sold “Snake Oil”.