Lower Drug Prices Without Saying No (see addendum)

Margot Sanger-Katz had a NYT Upshot column arguing that Hillary Clinton and Bernie Sanders plans to have Medicare negotiate drug prices ultimately won’t prove successful in lowering costs because Medicare can’t simply refuse to pay for a drug. There is much truth to this argument, but it is worth working through the dynamics a step further.

The reason why Medicare has to accept prices from a single drug company, as opposed to choosing among competing producers, is that the government gives dr...