Higher Drug Prices, Fewer Choices, Fewer Cures
WASHINGTON, DC – As Committee Republicans and Democrats were negotiating a way to modernize the popular Medicare Part D benefit, Speaker Nancy Pelosi’s drug pricing bill was being drafted behind closed doors. When it comes to lowering drug prices, she has put politics over progress before, and her drug pricing bill is just more of the same. For a second time this year, she has disrupted a chance to make real progress for the Americans who want Congress to act.
The Energy and Commerce Committee has a history of bipartisan collaboration in passing effective legislation with real results. Just last Congress Reps. Gus Bilirakis (R-FL) and Kurt Schrader (D-OR) – both members of the committee – had their bill signed into law which sped up the approval of generics, or off brand drugs, getting into the market. By expediting the approval of generic drugs, the more competition there is in the market which helps decrease the cost of drugs.
Competition also helped lead to decreases in 2020 Medicare Advantage and Medicare Part D premiums. If price controls were to have been enacted on these programs, America’s seniors would have been forking over more money to pay for their health care.
Speaker Pelosi’s plan removes competition, and replaces it with price controls. We all agree the costs of drugs are too high, but the Pelosi plan creates a potential 95% tax on American innovation. This will lead to higher drug prices, and fewer cures.
It’s no wonder why all 24 Republicans on the Energy and Commerce Committee stated to Speaker Pelosi, “It does not have to be this way…”
Bloomberg Opinion: Pelosi’s Plan to Slash Drug Prices Will Backfire
By: Michael R. Strain
October 2, 2019
House Speaker Nancy Pelosi introduced legislation last month to lower the price of prescription drugs. That’s a worthy and achievable goal. Unfortunately, she gave a misleading explanation of how the law would work, obscuring its probable counterproductive effects.
Instead of pushing down prices by forcing drug companies to compete more vigorously, it would put them in the hands of government bureaucrats in a way that’s likely to restrict innovation and reduce access to many important medications.
The Wall Street Journal Opinion: Pelosi’s Expensive Drug Bill
By: The Editorial Board
October 4, 2019
Mrs. Pelosi’s legislation would direct the secretary of Health and Human Services to “negotiate” a “fair price” with drug manufacturers for the most expensive 250 patent-protected brand drugs. The government would issue a take-or-leave-it offer with a tax sword hanging over drug makers.
Price controls are also a prescription for less innovation since they reduce the payoff on risky research and development. Over the past 16 years, more than 120 drug treatments for Alzheimer’s disease have failed. Only about 12% of molecules that enter clinical testing ultimately obtain FDA approval, and those successes have to pay for the 88% that fail.
Price controls would hamper competition by slowing new drug development. The U.S. accounts for most of the world’s pharmaceutical research and development, so there would be fewer breakthrough therapies for rare pediatric genetic disorders, cancers or hearing loss.
The Daily Signal Commentary: Why Pelosi’s Drug Price Control Scheme Would Be a Poison Pill to Innovation and Access
By: Doug Badger
September 24, 2019
The Lower Drug Costs Now Act of 2019 (H.R. 3), introduced last week with the backing of House Speaker Nancy Pelosi, D-Calif., would double down on the failures of existing government policies that have distorted prescription drug prices and contributed to higher health care costs.
The prices resulting from these “negotiations” would be applied throughout the U.S. market. The government would require manufacturers to offer that price to private, as well as public, payers or face massive fines.
A manufacturer that declined to negotiate the price of any of its products would incur an excise tax of up to 95% of the revenues it derived from that product in the preceding year.
The bill represents an unprecedented exercise of raw government power.
The federal government already imposes price curbs across a range of programs, requiring manufacturers to pay the government rebates in Medicaid and the “340B” program, and discounts in Medicare, as well as to make various price concessions in the Veterans Affairs health system
These provisions all are confined to federal programs, but nonetheless have distorted drug prices throughout the health sector.
Proponents of H.R. 3 claim that it would have no adverse effect on innovation or on access to pharmaceuticals. But aggressive government price-setting has damaged innovation and limited access to new treatments in all six of the countries whose price controls the bill would import.
If the U.S. adopts price controls, it risks the same results here.
This lack of access can have damaging effects. A study by IHS Markit examined outcomes for non-small cell lung cancer, the leading cause of cancer mortality in the U.S. and the world. The report compared how Americans with that disease fared, compared with citizens of other highly developed countries, including Australia, Canada, France, and the U.K.
The study concluded that Americans gained 201,700 life years as a result of faster access to new medicines. Half those gains would have been wiped out, the study found, if Americans had the same limited access to those treatments as patients in other countries.
STAT News Opinion: Patients will be the losers as Pelosi’s plan to control drug prices nearly strikes out
By: Peter Kolchinsky
September 23, 2019
The second part of Pelosi’s plan calls for government price controls on 250 drugs under Medicare. This means U.S. companies would not be allowed to set their own drug prices — even if they were the same as what other countries paid. The bill summary referred to these controls as a “negotiation” to bring down costs under Medicare, but its reach extends well beyond Medicare and doesn’t actually call for negotiation. Drug companies that do not acquiesce to pricing demands from the Department of Health and Human Services would face punitive taxes until they came to heel.