Gerard Scimeca – CASE
September 14, 2020
In the ongoing debate on the best way Washington can help lower prescription drugs prices, most U.S. consumers have remained staunchly opposed to socialized medicine and plans such as “Medicare for All” where Uncle Sam replaces our doctors and primary care providers.
Yet now on the road to the 2020 election the White House has taken a detour toward socialized medicine through a “Most Favored Nation” (MFN) Executive Order (EO) signed by President Trump this week that ties Medicare Part B and Part D payments to the drug costs in foreign countries. These are the very nations that pay less for medicine because they not only freeload off of American innovation, but also because the lower prices they pay for pharmaceuticals lead to lower quality care. The price controls adopted in the President’s EO are pure socialism and will have a tremendous negative impact on the critical medications millions of Americans require every day, as well as their access to medicine in the future.
While we understand the President wants to make good on his promise to lower drug prices, there are far better options on the table that don’t involve Washington becoming the nation’s pharmacy, a disastrous policy that will make America’s healthcare worse, not better.
Price controls are right off the Bernie Sanders wish list for fundamentally changing our healthcare system and putting government in control of all medical decisions. By tying the cost of drugs to socialized healthcare systems in foreign nations, Washington will dictate to patients what drugs will be made available, what drugs will be developed, and how soon they can have access to them. As Forbes points out, everywhere price controls have been tried, they “have reduced biopharmaceutical research spending, resulting in fewer vaccines, therapeutics, and cures.”
But crushing innovation into future cures isn’t the only concern consumers should have about this plan, as price controls lead to less access to drugs now on the market. Americans now have access to 90 percent of the new drugs developed between 2011 and 2018, but countries with price controls like France, Greece, the U.K., Denmark, Germany, Japan and others come nowhere near that level of access to these vital medications due to their socialist price control systems. France has access to fewer than half of the new drugs developed, while Greek citizens can claim a meager 14 percent access. In the U.K., acquiring needed medications on average takes three times longer for patients there compared with the U.S. That is a harrowing prospect; fewer available medicines and longer wait times to access them. This is not the road we want to go down.
American innovation is the main driver of better healthcare cures and treatments across the globe, currently funding 44 percent of all new treatments brought to market internationally. To tie our medical industry’s hands to price controls will bring investment into research for new treatments and cures to a screeching halt. Companies now spending billions of dollars to develop and test new formularies now face a far greater risk that with government controlling the market they will lose money in the bargain. It is a policy turned on its head that instead of encouraging innovation into lifesaving treatments Washington is actually punishing the innovators who offer promise for deadly and debilitating ailments, putting millions of lives at risk.
The President deserves praise for targeting the “middle men,” the Pharmacy Benefit Managers (PBMs) who negotiate drug prices with manufacturers in secret, and set prices with providers in secret. Their actions require more transparency and under the light of day U.S. consumers will realize a more fair system on drug pricing, boosted even further by requirements that drug rebates go to patients and not into the PBMs’ pockets.
Downward pressure on drug prices can also be applied through government reform, such as at the FDA, whose slow and onerous processes needlessly raise the cost of getting drugs to market. These protocols can be modernized and reformed while also ensuring that approved drugs are safe for those who need them.
Unfortunately America’s leadership in global medical innovation is assuredly at risk by this misguided White House policy. Price controls that mirror socialist nations will throttle innovation to the tune of 100 fewer cures developed over the next decade, according to the President’s own Council of Economic Advisors. This would equal one third of all new drugs to be released, a ghastly looting of America’s hope to find cures and better treatments for our worst medical afflictions.
This march to socialized medicine led more than 80 free-market, pro-consumer groups to weigh in with letters urging the President to avoid this catastrophic policy. We saw how government intervention with Obamacare sent prices skyrocketing while limiting consumer choice; we can expect more of the same from this socialist experiment with price controls. We already know how it will turn out, as the evidence is everywhere it has been tried. Let’s not kill American innovation and lower the quality and delivery of care in our nation, the President and his team must reverse course and make a U-turn on their road to socialism.
