George Chang: Taxachusetts… legislating companies out of business. Mass governor Jane Swift just signed a bill legislating cutting the Medicare reimbursement rate to 2% less than the wholesale cost of drugs. George argues this is a pretty quick way to cause a meltdown:
Let’s think about this: First, regulate the reimbursement rate of a product below the wholesale cost. Second, sue/force businesses to continue to sell this product at a loss. Does this make any sense?
…large pharmacies such as CVS have the option to pull out of unprofitable markets and continue to operate in profitable ones. However, about 20% of the 1000 pharmacies in Massachusetts are independently owned. These neighborhood mom and pop shops that are already scraping along will most likely be forced out of business.
Not to mention that decreasing sales volumes can only raise the cost of drugs overall. Have we learned nothing?