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That sounded a lot like nationwide monopsony power. Compare to "Wal-Mart simply decides what TVs are worth and then tells the manufacturers. If the TV manufactu
by emiliobumachar 7y ago
That sounded a lot like nationwide monopsony power. Compare to "Wal-Mart simply decides what TVs are worth and then tells the manufacturers. If the TV manufacturers don't like it, they can't sell them in Wal-Mart."
Perhaps United Healthcare cannot negotiate as much because it's bound by regulation, there's a large number of drugs that it cannot realistically stop covering, and the drug companies know it?
- refurb 7y agoMonopsony is “one buyer”. The group doing the price regulation in Canada isn’t buying anything.
- emiliobumachar 7y agoOn practical terms, they are acting as a monopsony. They are negotiating with the manufacturers. If the price they set is too low, the manufacturers will indeed stop selling in Canada.