by Karl Denninger, Market Ticker:
Senator Rand Paul previously announced intent to file a bill that, among other things, would make legal price-fixing and collusion in the medical industry.
(a) Application of the Federal Antitrust Laws to Health Care
Professionals Negotiating With Health Plans.–
(1) In general.–Any health care professionals who are
engaged in negotiations with a health plan regarding the terms
of any contract under which the professionals provide health
care items or services for which benefits are provided under
such plan shall, in connection with such negotiations, be
exempt from the Federal antitrust laws.
Let me point out, once again, why Rand included this in his bill.
15 United States Code Chapter 1 makes explicitly illegal any sort of price-fixing or collusion where market power exists. It provides both heavy civil ($10 to $100 million per instance) fines for persons and corporations, respectively, and in addition provides for felony criminal penalties of up to 10 years imprisonment for all persons involved.
The insurance industry tried to argue in the 1970s that Mccarran-Ferguson, a law which provides limited exemptions to 15 USC for insurance firms, shielded them — and pharmacies — from prosecution under these laws.
The case went to the Supreme Court and the insurance and pharamacy firms lost.
Normally, when such a thing happens the industry involved immediately changes how it operates because it has to. The law exists, the case was brought, it went as far as it can go in the court system and the highest court in the land said stop that crap right now.
But that didn’t happen in this instance.
Instead the health-related industries put up their middle finger toward both the people of this nation and the United States Supreme Court, instead deciding to bribe Congress through their lobbying. They not only didn’t change their behavior they accelerated it. Thus we have abuses of alleged “patents” (where no real change in formulation has occurred yet a “new drug patent” is issued for what amounts to a non-innovation), they pay off one company not to compete .vs. another (a black-letter violation of the law) they got Congress to make illegal the importation of drugs made by the same companies that happened to pass through other nations, and they “convinced” (through God knows what method) both federal and state attorneys general in both political parties equally to ignore not only the 100+ year old body of law in 15 Unites States Code but also all 50 state consumer protection laws and federal FTC regulations that bar deceptive practices such as refusing to quote a price before a service is performed or billing two different people wildly different prices, often by 10x or more, for the exact same thing.
Let me further point out that while “Drug Reimportation” was banned by Congressional Action (that is, a law) restraint of trade intended to increase the price in the United States remains illegal.
Every combination, conspiracy, trust, agreement, or contract is declared to be contrary to public policy, illegal, and void when the same is made by or between two or more persons or corporations, either of whom, as agent or principal, is engaged in importing any article from any foreign country into the United States, and when such combination, conspiracy, trust, agreement, or contract is intended to operate in restraint of lawful trade, or free competition in lawful trade or commerce, or to increase the market price in any part of the United States of any article or articles imported or intended to be imported into the United States, or of any manufacture into which such imported article enters or is intended to enter.
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