Correct, I am assuming that regulation drives up cost which may or may not be true. Let's assume that is wrong... And I agree, taken in isolation you are right

Correct, I am assuming that regulation drives up cost which may or may not be true. Let's assume that is wrong... And I agree, taken in isolation you are right. There is no guarantee that opening up the markets will lower prices. In fact, as you say, the opposite might happen. But, I am also assuming that opening free trade between markets (not merging into one giant market as you say) will produce competition. Not just with insurers but also with pharmaceutical companies and safety agencies. On the safety front if there was some reciprocity between safety agencies that the pharma company doesn't have to have their drug approved in every country that they want to sell in. Now, you will say there is no guarantee big pharma will pass along that savings but... - These savings should allow new entrants into the market by lowering the barrier of entry - It allows multiple drugs that treat the same illness (but are not patent infringing) to compete. As opposed to currently it can be years (if ever) for a foreign drug to enter the US marker. Edit: To summarize. The pharma and insurance companies can charge what they want because they are a monopoly. You are assuming the monopoly will continue when trade is opened. I am more optimistic if it can be executed well as opposed to just blind deregulation.