Research Saves Lives – Price Controls Put All at Risk

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As Americans have seen their lives change dramatically, we are all doing our part to stop the spread of the Covid-19 virus. We know our best hope to return to normalcy is through the rapid development of therapeutics and vaccines. Where are these treatments going to come from? They will come from America’s proven ability to deliver on drug innovation.

In recent years, medications have transformed many conditions, like certain cancers and HIV, from death sentences into treatable conditions. New treatments are providing hope to patients with diseases like Alzheimer’s and Parkinson’s. Medical research saves lives.

Since its inception, National Right to Life has fought to protect life, whether protecting older people and people with disabilities from euthanasia or unborn children from abortion. We have long believed that the denial of life-saving medical treatment, including life-saving medication, is a form of involuntary euthanasia, and therefore have opposed government rationing of health care.

As Covid-19 spread across the country, some so-called ethicists have darkened the hope of a cure with talk of withholding care, rationing, and cutting back just as the need for cutting-edge research is most urgent. 

At this critical juncture, we must not hinder the private sector in its push to innovate and develop life-saving treatments. The ultimate answer to protecting Americans is to make sure we succeed in developing therapeutics and vaccines. 

Thankfully, the Trump administration has pushed back, and the effort to find treatments is occurring at record pace. As early as May 8, 2020, there were already 750 active clinical trials underway. Meanwhile, the government’s “Operation Warp Speed” has pledged $10 billion to create and administer 300 million doses of a Covid-19 vaccine by January 2021.

However, this level of rapid mobilization by the U.S. drug industry is only possible because the U.S. has preserved a free market for pharmaceutical drugs which has facilitated cutting-edge research and development

But such research is risky and expensive. The costs of bringing a new medicine to market have doubled in recent years, from $1.2 billion in 2010 to $2.4 billion in 2019, according to a Deloitte analysis. As costs skyrocket, profits have plunged – with returns decreasing from 10 percent to 2 percent, the analysis found.

And a policy many claim would reduce costs – price controls – would make our problems worse. In foreign countries with price controls in place, governments frequently utilize a range of arbitrary and draconian policies to determine the price of medicines. There is no negotiation and foreign governments often force innovators to simply accept set prices. Predictably, this has meant less access to cutting edge medications, and fewer new drugs making it to market.

Congressional Democrats, based on legislation like H.R. 3, introduced by House Speaker Nancy Pelosi, would gladly usher in an era of rationing and reduced medical innovation. 

While thankfully Pelosi’s efforts appear stalled, one important component of the Democrat bill is related to International Price Indexing, remains a cause for concern.

The International Price Index model, unfortunately, imports foreign price controls into the U.S. by modifying the Medicare drug reimbursement rates so that it is calculated from an average of prices set by 14 countries.

Notably, many of those 14 countries decide who gets care based on discriminatory quality-adjusted life year (QALY), which is banned in numerous places in U.S. law because it systemically undervalues the lives of patients with disabilities and chronic conditions. 

With the understandable goal of lowering prices, the Trump administration has issued a series of executive orders concerning drug pricing on July 24. 

One of the orders, restricting rebates to pharmacy benefit managers and other “middlemen” to preserve discounts directly for patients, is good step forward. It needs to be given a chance to provide relief to Americans. 

What we should not do is reach into the Pelosi bill and implement price controls, including the International Price Index.  

While costs are important, the middle of a pandemic is certainly not the time to begin limiting the amount of money that we can spend on new drugs. As we all do our part to fight the spread of Covid-19, we must ensure America’s research and development community continues to have the resources necessary to develop the life-saving medicines that will keep us alive and healthy.

Jennifer Popik, J.D. is the Director of the Robert Powell Center for Medical Ethics at the National Right to Life Committee

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