When one considers Nancy Pelosi’s H.R. 3, the Lower Drug Costs Now Act, one can see the driving force behind the legislation and that is to either (a) introduce this initiative as a ramp to the “Medicare for All” socialism strategy, (b) give the slate of Democratic presidential hopefuls an answer to the “what are you going to do to lower drug prices” question, or (c) both. Unfortunately, many of us aren’t going to like the outcome or their answers.
H.R. 3 targets private sector health care in an astonishing government control power play. The bill demands that pharmaceutical companies negotiate drug prices with the government. However, people who dwell in realty know that the government simply does not “negotiate”, it mandates. If a pharmaceutical company does not comply with the prices set by the federal government on medications where there is no generic or biosimilar equivalent, it could face a massive 95% penalty (tax) on each drug. According to Galen Institute Senior Fellow Doug Badger, “this new tax would flow to federal coffers and not to reducing drug prices for seniors”.
Pelosi’s plan would not limit these “negotiated” prices to just federally funded health care plans like Medicare. Drug companies would be forced to offer these prices to private plans as well. Badger continues, “It’s one thing for the government to dictate the prices it pays in programs it finances. It is quite another for the government to impose a price for a product’s private sales”.
Pelosi’s price fixing would severely damage private sector research and development of new potentially lifesaving medications. It would also limit the availability of existing medications. Americans are currently experiencing artificial drug shortages due in part to the business practices in the hospital and outpatient prescription drug supply chains and this bill, while doing nothing substantive to address these practices, would exacerbate an already serious situation.
Pelosi’s price controls would destroy any incentive for private sector drug manufacturers to invest in innovative therapies. The United States currently leads the world in drug research, but it wasn’t always that way. Badger notes, ““In 1986, European firms led the U.S. in spending on pharmaceutical research and development by 24%. After the imposition of price control regimes, they fell behind. By 2015, they lagged the U.S. by 40%….if the U.S. emulates the European price-setting example, innovation almost certainly will suffer.”
H.R. 3 resurrects policies that have failed in the past, limits therapeutic options for patients and virtually guarantees the destruction of private drug therapy research and development. It should be outright rejected while lawmakers focus on solutions that promote American led life-saving innovations that can be shared worldwide.
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