by D.B. Gray

For those of us old enough to remember, we know about the dramatic increase in the price of prescription drugs over the last 10 to 20 years.

Between 1993 and 2000, the price of prescription drugs doubled, sometimes tripled. At the same time, there was no rampant inflation and employment was stable. So why was there such an increase in prices?

At first thought, you might think the cost of production was the culprit. For this to happen, the cost of chemicals, drug trials (which are expensive anyway) and salaries would also have to go up exponentially, however, this was simply not the case.

No one got big raises; the price of chemicals did not jump significantly. The cost of drug trials was already priced into the cost of drugs, and there were no significant changes in governmental regulations that caused prices to jump so much.

Looking deeper, I believe the price increases were a result of greed and fear. We already know that greed is a basic tenant of capitalism, so greed will always be a part of the cause.

The overriding cause of the increase was due to the fear of governmental price controls.

In November 1992, this United States elected Arkansas Gov. Bill Clinton as president of the United States. Clinton brought with him an ultra-liberal wife named Hillary.

Not long after the inauguration, the President announced that his wife would be the spearhead of an initiative to get the price of medical care under control, not unlike what has now become “Obama Care.” This scared the pants off drug manufacturers who got their MBAs with laptops to figure out how to deal with the threat of price controls.

The MBAs determined that Hillary’s goal was for the federal government to impose price controls on the cost of prescription drugs. While the Congress and Hillary were debating these issues, which never passed, the drug manufacturers felt that the day would come when governmental regulations would cause them to either cap or roll back the cost of prescriptions.

The corporate solution was simple — ramp up the sales prices so fast and so far that when the manufacturers had to come to the table, they had ample profit margin to negotiate from, and that it would be less painful to roll back prices.

The plan was that prices would be so high compared to what they were only a few years before that any rollback would be affordable. The MBAs simply got ahead of the government on prices. Price controls did not come, and the manufacturers never reduced their prices.

Therefore, from the manufacturers’ point of view, it was one of those “intended consequences,” and the American public got ripped off egregiously and permanently. As a measure of how effective the Clinton White House was on controlling health-care costs consider that when Bill Clinton entered office in 1992 the medical care industry was $800 billion; when he left office, the industry had grown to $1.2 trillion — a 50 percent increase. That’s capitalism and greed working at its fine hour.

Remember, there is nothing more dangerous than an MBA with a laptop.