Driving drugs off the market

If you're a Californian, you'll want to read this article about Proposition 79, which is being billed as a way to bring down soaring drug prices. The goal is laudable, but the Proposition is a timely reminder that the road to Hell is paved with good intentions. Getting behind the high sounding language, what the Proposition will actually do is to force price controls on drug manufacturers. In other words, in California, which is one of the world's largest economies, pharmaceutical companies will be subject to strict price controls. I'm perfectly aware that drug companies sometimes make obscene profits, and I'm equally worried by the fact that many people cannot afford drugs that would serve them best. However, neither of those facts blinds me to the economic reality that squishing profits and facilitating litigation means that drug companies will do what they've always done. They'll hunker down, and stop researching, producing and marketing. We'll end up with a Soviet style grocery store where everyone can afford to buy the same three, useless items.