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Allowing these price controls would essentially lead to higher prices for the rest of the American people.
The GAO reached this conclusion by researching what happened when the government forced drug manufacturers to pay rebates to state Medicaid programs. Much like the VA system, the Medicaid rebates gave the government programs the best price in the market...
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Much like the VA system, the Medicaid rebates gave the government programs the best price in the market. So the drug manufacturers simply raised their prices to the private purchasers, which lower the rebates paid to the Medicaid programs. Drug manufacturers had to eliminate the best discounts for their private purchasers because they new they would have to provide a better price to the 50 state Medicaid programs...
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