Competition Improves Health Care

The Seattle Post-Intelligencer reports that prices for prescription drugs are falling (after adjusted for inflation), due to market competition:

Competition improves health care

Lo and behold, competition works -- even in health care.

The Labor Department recently reported that the inflation rate for prescription drugs dropped to 1 percent over the past year. That's a 30-year low, well below inflation, and a salve for consumers used to price increases.

It's also no accident. Two big things changed in prescription drugs last year. One is a surge in the use of generics. The other is a fierce retail war among Wal-Mart, Publix and other retail-pharmacy giants, each seeking a bigger share of the market.

...Remember this, what real competition looks like, the next time you hear about "market failures" in health care.

...The decline in drug prices shows that when things go right in health care -- when competitive markets are allowed to function -- prices respond favorably for consumers, just as they do in other sectors of the economy. So while politicians and pundits in Washington dream up the next grandiose health care reform, smart consumers know that the most effective health care solutions may be right around the corner at their local retailer.