This is the first post from another one of our new team members, Josh Arnold. With a Master’s in Public Policy from Pepperdine University, Josh brings extensive experience in policy analysis and publications to Ethos’ NSDA PF Sourcebook Team. Keep an eye out for more topic analysis posts and excellent research from him coming soon!
Here’s Part 2 of Ethos’ analysis on the 2018 Nov/Dec PF topic, Resolved: The United States federal government should impose price controls on the pharmaceutical industry.
Today, we’ll be bringing you substantive analysis on the Negative side of the resolution. [Sure, we know it’s odd we’re presenting the Negative before the Affirmative. But hey, it’s PF, where this happens in 50% of rounds…]
Stay tuned for Part 3 on the Affirmative, which will be jam-packed with analysis, strategies, and resources to help you win more debates!
Overview of the Negative
For the Negative side, this resolution poses both a challenge and an opportunity. The challenge is that your argument will likely be more complex than the Affirmative argument, making it more difficult to communicate clearly to the judge. The opportunity is that there is a lot of flexibility in argumentation, depending on how you choose to approach the resolution. Let’s start by considering some major lines of argumentation and then look at several strategies to combine them.
The Arguments
Economics
The logic of this resolution is similar to the logic of other forms of price control, such as rent control. Simply put, price ceilings artificially impose a price lower than the market equilibrium. This means there is more demand than supply at the given price, creating a shortage. There are real-world examples of the effects shortages can have on healthcare systems—waiting lists (for transplants, etc.), medical tourism (from Great Britain and Canada to the U.S.), or unsafe generics traded on the black market (especially true in places like Africa or India).
Be careful, however. The markets for many pharmaceuticals don’t follow the standard supply-and-demand model with which most people are familiar. For one thing, the demand for many drugs is highly inelastic, meaning that a change in price does not have a large effect on demand. This is because many drugs are life-saving, or at least make life bearable, and there are no substitutes. Examples would be insulin, epinephrine, or certain psychiatric or cancer treatments. Additionally, due to FDA approval requirements and patents, the markets for most drugs have only one or a few suppliers. The typical supply-and-demand model represents a market with perfect competition, which requires many suppliers. It would be beneficial to understand how monopoly prices differ from prices in competitive markets.
Affirmative teams will be able to offer plenty of examples of pharmaceuticals that were sold for a price much higher than their production cost. They will likely argue that these drugs will continue to be sold if price controls are imposed to cut into the profits. There is no way to argue with them on that point. Instead, point out that price controls risk cutting off future R&D. For every drug that makes it to market, quite a few (about ten times as many) fail. The research could dead-end, the FDA could refuse to approve, or the company could ultimately deem the drug unprofitable. Of the ones that make it to market, only a fraction generate large profits. To enable future R&D, the pharmaceutical company must be able to recoup not only their investment into that drug, but also into all the drugs that failed. That is why profits on the drug are so large, and that is why limiting profits will stifle future R&D.
Health Outcomes
Economic arguments are key to setting this up. Artificially low drug prices lead to shortages, which lead to people not getting the medicine they need. From here, you can take this in either a socialist or a conservative direction.
A socialist might talk about how meaningful access to healthcare is an issue of equality and economic opportunity. Our society is judged by how we treat our most vulnerable members, and imposing price controls is tantamount to telling people on death’s doorstep to go to the back of the line and wait their turn. Additionally, if medical tourism is a realistic option for obtaining drugs, then these shortages will have a disproportionate impact on those too poor to travel overseas to obtain the medicine they need.
A conservative might talk about how a government’s primary responsibilities are to promote the flourishing of its citizens and build just, integrated communities. Price controls violate both standards by lowering the prospects of medical treatment, and incentivizing citizens desperate for life-saving drugs to either break the law by engaging in black market trade or leave the country to find care.
Freedom
This is where you channel your inner Milton Friedman and say that free enterprise is better than government control. Government should never be in the business of imposing price controls. The current prices are those dictated by the market, which is a good thing. If prices are indeed too high, then the government should restructure incentives in a way that lead to private businesses lowering their prices.
It should be noted that government already plays a major role in healthcare markets, and so if you are trying to defend the status quo, condemning all government intervention in the economy may not be the best idea.
Depending on how you flavor it, this argument could be libertarian, capitalist, or liberal.
Constitutionality
Nowhere does the Constitution grant Congress the power to impose price controls on the pharmaceutical industry. The pharmaceutical industry didn’t really even exist at the time the Constitution was adopted. Nor was Congress authorized to create price controls. The interstate commerce clause is a flimsy excuse at best. You might find something in the Declaration of Independence’s list of grievances that applies as well.
The weakness of this argument is its abstractness. If you can find ways to make it concrete, that may help persuade judges.
Solvency
There are two ways to argue this. Either the resolution and the Affirmative team have misdiagnosed the problem, or they have prescribed the wrong solution.
Perhaps high drug prices are only a symptom of a larger problem, and their band-aid will not fix the broken limb. You could point to problems in America’s health insurance system, in the FDA approval process, or in the patent system. However, if you get too far into the weeds, you risk confusing your judge.
Perhaps high prices are the problem, but price controls are not the right solution. If prices are controlled, then some agency must be in charge of setting those prices. Agencies are vulnerable to what is called “agency capture,” where industry lobbyists get chummy with the agency to obtain regulations that act in their favor. There are other market incentives, such as tax structures or regulations on competition, which could be modified without such a huge role played by bureaucrats.
The Strategies
To decide what arguments to use, it might be helpful to pick a Negative strategy. Specifically, you need to decide a position on current drug prices. Three options stand out:
First, you could say that drug prices are fine as they are. However, this could be risky; if your judge has had to buy medicine for their family (or perhaps their parents), they will probably have personal experience with rising drug prices. There will be a lot of judge bias to overcome. If you decide to go this route, then you might use the economics and freedom arguments, along with some form of solvency.
Second, you could agree with the Affirmative that drug prices are too high. If you do this, you surrender a lot of ground, but you probably would have lost that ground anyway. If you choose this option, you may want to combine the arguments about economics, health outcomes, and solvency.
Third, you could assert that whatever drug prices are right now is largely irrelevant, and that “it’s the principle of the thing” that really matters. Your argument would likely be based on freedom and constitutionality. With this option, you risk coming across as callous and unfeeling, as well as purely abstract. It might help to tie in some form of economic or solvency argument to counter the claims of the Affirmative team and say the problem really lies somewhere else.
Summary
Whatever strategy you choose, as the Negative team you will likely be forced to argue economics at some point, whether on offense or defense. Beyond that, however, you have a lot of flexibility in the ideological orientation of your argument and in how you choose to treat the facts of the resolution. Below are several links which may prove helpful launching pads into further research. Happy hunting!
Links:
https://www.pacificresearch.org/wp-content/uploads/2017/06/PhamaPricingF.pdf
https://www.cagw.org/reporting/pharmaceutical-price-controls