Tags: obamacare | epipen | crisis | nanny state

Obamacare and the Nanny State Created EpiPen Crisis

Image: Obamacare and the Nanny State Created EpiPen Crisis

(AP Images/Mark Zaleski)

By    |   Monday, 12 September 2016 07:09 AM

 

Supply and demand always determine prices. In the case of EpiPens, the latest flash point in the ongoing health care crisis, the price is determined by a series of government policies that increase demand and restrict supply. The result, predictably, is price gouging.

Laws now encourage public spaces to stock EpiPens. This will prevent some tragedies but the question then becomes which other medical devices should be readily available everywhere? Aspirin, for example, can be useful in the event of a stroke. Should laws require that drug to be stocked everywhere?

EpiPens are an example of government overreach. The marketplace could determine where they are needed. If the demand existed, many public places would stock them without mandates.

There is no argument that ready availability of EpiPens is good for the public, but if it is truly a public good, then perhaps government should provide or at least regulate the service rather than allow a private company to maintain a monopoly.

With EpiPens, government created demand through legislation and then allowed a single company to supply goods to meet that demand. When a monopoly exists, regulation is warranted as it is in the case of public utilities. Prices cannot be set in a free market when regulation dictates supply and demand.

Which leads to the Affordable Care Act. Government mandates demand for insurance and then sets the terms of supply in the form of required benefits. The results in high deductibles that change the availability of services for many consumers. Unforeseen consequences include unaffordable EpiPens and other needed services.

The solution is simple – fewer government mandates, an insurance market that meets the demands of consumers and a public safety net that truly offers support to those in need. Instead of solutions, we will most likely see political rhetoric that does nothing to help consumers and threatens the safety of investments in health care companies. In the current environment, investors should consider limiting exposure to the sector until after the election.  

Michael Carr, CMT, is a subadviser to a mutual fund family and a chartered market technician. To read more Michael Carr, CLICK HERE NOW.

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MichaelCarr
Supply and demand always determine prices. In the case of EpiPens, the latest flash point in the ongoing health care crisis, the price is determined by a series of government policies that increase demand and restrict supply.
obamacare, epipen, crisis, nanny state
355
2016-09-12
Monday, 12 September 2016 07:09 AM
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