You’d think Democrats and Republicans in Washington could find a way to work together to help people get the cutting-edge, lifesaving medications they need. Sadly, that’s not the case.
The House is expected to vote on Speaker Nancy Pelosi’s drug pricing bill next week. The bill, titled the “Lower Drug Costs Now Act of 2019 was decried by a White House report this week, which found that the bill would suppress over 100 lifesaving drugs from entering the United States market. This would cause serious harm to American patients with The Council of Economic Advisers (CEA) estimating that this bill, “would reduce Americans’ average life expectancy by about four months—nearly one-quarter of the projected gains in life expectancy over the next decade.”
Furthermore, the CEA estimates the loss of these new drugs coupled with the worse health outcomes for American patients would create an economic loss of $1 trillion per year over the next decade – a loss that far outweighs any projected saving from the bill.
According to the analysis, “Heavy-handed government intervention may reduce drug prices in the short term, but these savings are not worth the long-term cost of American patients losing access to new lifesaving treatments.”
They’re absolutely right. Speaker Pelosi’s drug-pricing plan would require manufacturers of the 250 most expensive drugs on the market to “negotiate” a price cap with Congress, or otherwise face a 65 percent tax on gross sales for the year.
At those absurd margins, drug companies would be paying the government to research, develop and manufacture life-saving treatments—something that is simply unsustainable and would discourage the production of new and better drugs for patients in need.
As the Wall Street Journal editorial board writes, “How many companies do you know with 65% margins? The concept of negotiated prices with government has always been a political ruse because the government has outsize leverage to coerce manufacturers, so at least Mrs. Pelosi is transparent about the thuggery.”
It’s not a cheap undertaking to invest in pharmaceuticals that take years to get to market – if they make it at all—and those who do run prescription-drug businesses operate on relatively thin returns.
What’s more, Pelosi’s drug plan would cap the price of 250 brand-name Medicare drugs using a formula based on the average cost of those same drugs in Australia, Canada, France, Germany, Japan and the United Kingdom. Yet, patients in these countries have longer waiting times for lifesaving medicines and they lag far behind in medical innovation. Why would we want to adopt their model? It may sound good to adopt the price control model of these nations, but it will seriously harm our citizens.
“We found that, contrary to public assertions, the median time approval for new cancer medicines in the United States was just six months—and that these new anticancer medicines are typically available in the United States before they are in Europe,” says Health Affairs.
This legislation will certainly cause companies to pull back on research and development of new and improved drugs—to the detriment of those in need of new therapies and cures, and to America’s position as the world leader in medical innovation.
The bottom line? Be very wary of these hair-brained Pelosi price-control schemes, especially if you or a loved one is battling a life-threatening cancer diagnosis and the promise of up-and-coming drugs are the only recourse.
For the sake of those we care about most, it’s imperative lawmakers stop these European-style price-control proposals in their tracks, and send a message to Pelosi that Americans deserve better than a botched bill that restricts access to lifesaving innovative drugs.
The author is president of Americans for Limited Government and co-author with Star Parker of the new book “Necessary Noise: How Donald Trump Inflames the Culture War and Why that is Good for America”.
