Drugs are an especially significant problem. The high cost of prescription drugs, however, does not just derive from the expertise to develop them. Drug companies receive patent protection for drugs that allows them to charge monopoly rents. This is a distortion in the market, one that the government has determined to be socially favorable. The cost, however, has reached the point where drug costs are also socially unfavorable, particularly if they lead to an erosion of America's credit standing.

Curtailing drug costs may not be politically straightforward, but the economics of it are. The monopoly rents can be capped. Governments in many countries cap drug costs and perhaps the public option is tended to give the U.S. The same power. There may be some quid pro quo for the drug companies -- extending the life of patents, more support for orphan drugs or a streamlined FDA approval process that lowers...
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