House Democrats are making yet another push to implement government price-setting on prescription medicines — this time, in the middle of a pandemic with an “all hands on deck” race underway by biopharmaceutical companies to develop vaccines and treatments for COVID-19. It begs the question, is this a serious proposal?
The measure in question — the Affordable Care Act stabilization bill — seeks to expand ACA insurance subsidies and increase the affordability of ACA exchange plans.
For the first time this year, lawmakers are insisting on paying for this expansive package by adopting foreign reference pricing — a practice which ties the cost of U.S. medicines to the average prices paid in other countries. It would heavily fine manufacturers who don’t comply with the cap.
Such government price controls would bring about devastating consequences, especially in the midst of a public health crisis like COVID-19. It would drastically stem medical innovation and deprive Americans of new treatments when needed most.
This isn’t speculation. House Democrats are using Title I of H.R.3 — the Lower Drug Costs Now Act of 2019 — which passed last year, as the basis for its proposal. Doing so would empower the government to cap the prices of 250 common brand-name medications. The prices could not exceed 120% of the average prices paid in six other developed nations. And if manufacturers refuse or are unable to comply, they would face extraordinary penalties — up to 95% of their sales revenue.
On its face, the legislation might seem like an effective way to increase access to prescription medication. But it would have the opposite effect. A report from the Congressional Budget Office found that H.R. 3 would translate to 45 fewer new drugs coming to market in the next two decades. Among those lost 45 drugs, any number may have been a medication that brought us one step closer to ending COVID-19.
This inevitable downturn in medical innovation boils down to simple dollars and cents. If drug manufacturers have less money coming in to spend on research — an extraordinarily expensive process — they’ll have to reduce the number of drug development projects. In fact, cutting drug prices by 40% to 50% would lead to up to 60% fewer research and development projects being undertaken, according to a report from the Nation Bureau of Economic Research.
And it’s not just the availability of new cures that would be curtailed. This H.R. 3 type policy could also prompt shortages of existing brand-name drugs and restrict more than 200 million patients’ access to the medications they already rely on to stay healthy.
That would prove particularly harmful for Americans with chronic or underlying illness, who are 12 times more likely to die from COVID-19. If lawmakers deprive them of the treatments they need to manage their conditions, the pandemic’s already devastating toll could skyrocket.
The world economy has been shut down. The only industry with a shot of getting us back to normal are the drug manufacturers, and leaders in the House are advancing a bill that independent experts say will delay or cancel major, innovative research projects. The approach defies common sense.
Congress is right to look for ways to provide Americans with affordable access to the care they need, but it shouldn’t come at the cost of a treatment or vaccine for COVID-19. There are dozens of proposals that would do so, and that have bipartisan support. Let’s hope Congress gets the message — before it’s too late.
Joel White is president of the Council for Affordable Health Coverage, a coalition of organizations seeking lower the cost of health care for all Americans. Prior to CAHC, Joel spent 12 years on Capitol Hill as a professional House staff, most recently as the Staff Director for the Ways and Means Health Subcommittee.
The author seems unaware of the truth of this matter, or he is afraid to talk about it. Americans are subsidizing those nations that have enacted socialist healthcare price controls. That’s a plain, unpleasant fact. Other nations have felt comfortable keeping prices at or below production costs because America won’t, at least so far. The socialists don’t care if new research is stopped. In fact, they believe that ordering companies to sell their goods at a loss actually works. Just ask the 94% of people in Venezuela who now live in poverty how that’s worked out for them? Should Americans subsidize drug research for the world’s socialist parasites? Because that is exactly what we are doing.
Bingo! Exactly correct. Foreign nations will also see reductions in supply as well.
Our government has been complicit in giving the USA high drug prices. Pharmaceuticals as well as many members Congress have benefited handsomely via the largess of pharma. Now they would like to benefit again by enacting additional government programs and you will still have problems because too many members of Congress need to look like they are helping you. They are not.
Our government is a bloated out of control vehicle that operates as if more bloat will fix the problem of bloat. Wake up folks. We are on a precipice.
The coronavirus has made a severe in road into this old narrative about how big pharma has contributed greatly to our healthcare opportunities so we should let them continue unfettered. But now we are seeing big pharma and our deep state bureaucrats actively spreading misinformation about the effectiveness of $20.00 worth of hydroxychloroquine and zinc in order to leave an opening and create a demand for drugs that they will produce which will cost $1-5,000 for a treatment. This is opening up a can of worms for big pharma as the people are beginning to see behind the curtain.
How humorous. We do not have a vaccine but the dems want price controls anyway. No better way to remove the incentive to find a vaccine.
Hey, let’s put price controls on solar powered teleporters too.