They hope a watered down version of their Build Back Better Act will do the trick. Senator Joe Manchin, Deutsche Welle. Virginia, who helped drop the bill last winter, has met repeatedly With Senate Majority Leader Charles Schumer, a Democrat from New York, in recent weeks trying to reach a compromise on the massive spending package.
Reports suggest that a proposal to give Medicare the power to “negotiate” drug prices could be a key feature of any compromise. Senator Manchin recently mentioned Reforming drug pricing is “the only thing that needs to be done”. he is urging fellow lawmakers To take action on drug price negotiations and ‘keep promises [they’ve] Made for our seniors.”
But these “negotiations” are disguised price controls. As such, they are eliminating medical innovation and denying patients access to life-saving medicines.
The Democrats’ goal has long been to give the government the power to set drug prices. The Latest iteration Build Back Better would enable federal bureaucrats to “negotiate” prices for some high-cost drugs without public competition under Parts B and D.
The more accurate term for what Democrats have in mind is “coercion.” Under the proposal, the The government can impose A selective tax of 95% on the total sales of a drug if a pharmaceutical company refuses to participate in the negotiating charade.
This leaves pharmaceutical companies with two options. They can accept the price dictated by the government, or lose almost every penny in sales of the drug.
Although there are limits on the price and number of drugs officials can set each year, there is no limit to the number of drug prices they can set over time. If the BBB is passed, 100 medicines It will be open to negotiation by 2030.
Knowing that the government may one day drastically reduce the price of the drug, many investors will think twice before pouring money into research and development.
The research and development process is incredibly risky and expensive, often require $2.9 billion and 15 years to get the drug to patients. The prescription drug market free from bureaucratic interference provides investors with the opportunity to recoup these expenses if the drug in which they invested turns out to be one of 12% From experimental treatments that make it through clinical trials.
Price controls will disrupt this system, resulting in lower investment and less innovative treatments. University of Chicago economist Thomas J. Phillipson Estimates That the BBB’s proposal for negotiations would reduce R&D spending by $663 billion, lead to 135 fewer new drugs being introduced, and cause a loss More than 330 million years of life in the United States Until 2039.
But lawmakers do not need to rely on economic modeling to reach these conclusions. Just look across the Atlantic or across our northern border, where governments place restrictions on prescription drug prices.
Keep in mind that the UK develops a fraction of the medicines that the US produces. Between 2001 and 2010, three out of five new drugs were invented in the United States. UK advanced only 8%.
Price controls also prevent patients from accessing the latest life-saving drugs. While the American patients reach 96% Of all the new cancer drugs launched between 2011 and 2018, Canadian patients earned less than 60%.
There is little reason to believe that life under a government price-fixing scheme would be different for American patients than for their British or Canadian counterparts.
The Democrats’ price-control scheme is a transparent attempt to buy votes. Given its long-term costs in innovation and lack of access, this is one of the negotiations Americans should reject.