The Latest from the Prospect
 â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â
Â
View this email in your browser
<[link removed]>
**NOVEMBER 30, 2022**
Kuttner on TAP
****
****
****
****
****
****
****
****
**** One More French Lesson-Le
Drugstore
In France, pharmacy chains are illegal. The result: local ownership,
better service, and more price competition.
PARIS - I'm heading home today after spending three months in Paris
on a trip that was mostly research and reporting, and partly pleasure
just by being here. Along the way, I learned a lot about the French
health system
<[link removed]>.
One fascinating detail, with lessons for policy in the United States, is
how France regulates pharmacies. Under French law
<[link removed]>,
a pharmacy must be owned by a licensed pharmacist and each pharmacist
may have only one.
As a consequence, there are no chains. It would be illegal in France for
a pharmacist to front for a chain.
The results are the opposite of what free-marketeers might expect and
what chains like CVS would claim. Drugs, both prescription and
over-the-counter, are cheaper than in the U.S., and the service is far
better.
To some extent, lower-cost drugs are also the result of France's
system of regulation of drug pricing, which evaluates pharmaceuticals on
the basis of efficacy and pays accordingly. Once a drug is approved,
price increases (common in the U.S.) are illegal.
But the system of retail drugstores also accounts for the lower prices.
There are 23,000
<[link removed]>
separately owned pharmacies in France. There are six within a short
walking distance of where I've been living.
This system produces plenty of competition for price and for service.
Due to the combination of wholesale and retail regulation, and the
salutary competition it produces, studies show that the average French
person spends about half <[link removed]> on
prescription drugs what the average American does.
Independently owned local French drugstores are also part of the fabric
of neighborhoods. So while the French have the reputation of being
"statist," in this case state regulation defends and promotes small
business, competition, and community.
Meanwhile, back in the United States, the retail drugstore industry only
gets more concentrated. Even worse, pharmacy chains have merged with
both insurance companies and pharmacy benefit companies, creating
additional monopoly pricing power and conflicts of interest, as these
giants bargain with themselves-at the expense of both consumers and
the remaining independent pharmacies.
CVS, beginning in 1977, acquired 12 other pharmacy chains, and then
bought Aetna
<[link removed]>
in 2018 for $69 billion. CVS, with 9,939 retail stores
<[link removed]>
as of the end of 2021, is now also a large insurance company, as well as
one of the largest pharmacy benefit managers (the latter being a
middleman that was advertised as containing costs but now raises them).
And with its absentee corporate ownership, CVS is also a sweatshop for
pharmacists and technicians, according to this exposé
<[link removed]>
in
**The New York Times**.
As our colleague David Dayen has reported
<[link removed]>,
the Federal Trade Commission, which allowed all of this concentration,
finally got around last June to investigating the abuses of chain
drugstore cross-ownership of pharmacy benefit managers. But the
antitrust authorities never should have allowed CVS to so dominate
retail drugstores, much less own a major insurance company.
The French have a neat and simple solution: one drugstore per licensed
pharmacist. North Dakota is the one state in the U.S. with a similar
law, but it has loopholes. A drugstore has to be 51 percent owned by
pharmacists. One Midwestern chain, Thrifty White Pharmacy, uses its
employee stock ownership plan as a basis for operating in North Dakota.
And six CVS stores there are grandfathered. Even so, the preponderance
of locally owned drugstores leaves North Dakota with lower drug costs
<[link removed]> than most states.
Louis Brandeis, in many ways the father of modern antitrust regulation,
was especially worried about chain stores, which seemed convenient and
efficient but had the potential of destroying local small businesses and
gouging consumers. He sure got that right.
~ ROBERT KUTTNER
To receive this newsletter directly in your inbox, click here to
subscribe. <[link removed]>
Follow Robert Kuttner on Twitter <[link removed]>
[link removed]
The Best Tax System on Earth
<[link removed]>
What America and the world can learn from the Faroe Islands BY RYAN
COOPER
Commerce Secretary Raimondo Meets With One Corporate Executive per Day
<[link removed]>
Calendar logs from the first seven months of her tenure at Commerce show
230 different meetings with CEOs, top executives, or trade groups. BY
DAVID DAYEN
A New Union Rises in the South
<[link removed]>
The Union of Southern Service Workers is organizing food service,
retail, and health care workers through direct action against low wages
and historical racism. BY KELLY CANDAELE
Â
[link removed]
Click to Share this Newsletter
[link removed]
Â
[link removed]
Â
[link removed]
Â
[link removed]
Â
[link removed]
YOUR TAX DEDUCTIBLE DONATION SUPPORTS INDEPENDENT JOURNALISM
<[link removed]>
The American Prospect, Inc.
1225 I Street NW, Suite 600
Washington, DC xxxxxx
United States
Copyright (c) 2022 The American Prospect. All rights reserved.
To opt out of American Prospect membership messaging, click here
<[link removed]>.
To manage your newsletter preferences, click here
<[link removed]>.
To unsubscribe from all American Prospect emails, including newsletters,
click here
<[link removed]>.
