By Rick Manning
House Speaker Nancy Pelosi’s (D-Calif.) Drug Pricing bill, H.R. 3, the so-called “Lower Drug Costs Now Act of 2019” would be a disaster for those praying for the next medical cure, as it punishes those who are making and democratizing the latest medicines.
Currently, the Centers for Medicare and Medicaid Services (CMS) is specifically prohibited from negotiating prices with drug companies for the very reason that they have market power to force manufacturers to drive prices below break-even points with the result being higher prices for non-government health care dependent users.
Pelosi’s ulterior motive with H.R. 3 is to create this exact disparity while using the lower cost that those on government health care pay for medicines as a universal health care talking point.
The reality is that Pelosi knows that her bill will inevitably result in a system where those who, like her, are extremely wealthy will continue to get the latest medicines, while those are not, will not.
In fact, the natural outcome of the Pelosi bill is for pharmaceutical companies to avoid mass distribution of new, more effective medicines until they have a generic alternative, and this loss of revenue generated by these new medicines will cut bottom line research and development costs.
If Pelosi wants to cut the cost of medicines, she should pass legislation streamlining the approval process. Various studies have shown that the average time for a medicine to go from invention to the drug store is twelve years with average cost estimates ranging from $1 billion to $2.6 billion according to a Tufts University study.
Creating cures and treatments for cancer, Alzheimer’s, diabetes and other deadly and debilitating diseases is not cheap, but decreasing the time to market would significantly lower the underlying costs and as a result prices as drug companies will want their product to reach as many people as possible and know that higher costs are a barrier for many in using their health inventions.
Yet Speaker Pelosi through H.R. 3, would not only make it unprofitable for certain popular drugs, but would create a pricing disincentive to broadly market a medicine to Medicare and Medicaid patients that could become one of the 125 most costly medicines to CMS, putting the drug into the CMS lottery of pain, where the loser has their new, successful cure made unprofitable with the stroke of a bureaucrat’s pen.
Anyone who is evenly mildly sentient would know that four outcomes are guaranteed to occur under these circumstances: 1) research and development will slow dramatically particularly for medicines that target diseases disproportionately afflicting the elderly; 2) prescription drug costs for those who use private health insurance or purchase their drugs out of pocket will escalate dramatically to offset the extorted and artificial lower costs provided to Medicare and Medicaid beneficiaries; 3) companies will seek to avoid marketing new medicines and covered treatments to physicians, hospitals and medical groups which have a significant Medicare and Medicaid clientele; and finally, 4) Nancy Pelosi, one of the richest women in the world, will still get her meds even if you cannot.
Rick Manning is the President of Americans for Limited Government. Reproduced with permission. Original can be viewed here.