Biden’s New War on Drugs

By a wide margin, Americans believe the War on Drugs has been a failure and are ready for a different approach.  Given that the old drug war has gone so poorly, why does President Joe Biden want to launch a new one, this time on prescription drugs?

As senator, Biden was a leading advocate for first enacting and then sustaining the war on illegal drugs. By any objective standard, Biden’s war accomplished few, if any, of its objectives; in fact, the illicit drug market thrived. 

Since the War on Drugs began, the number of Americans jailed for drug offenses went from 40,900 in 1980 to 430,926 in 2019, with almost half the federal prison population in on drug charges.  As a result, there are as many Americans with criminal records as there are with college degrees.

Now as president, Biden is opening a new front by pushing for price controls on prescription drugs that promise to have profoundly negative unintended consequences, harming patients and eroding America’s edge in developing and bringing new drugs to market. 

The Biden plan centers on what supporters charitably describe as “negotiations” over the price of the most popular prescription medicines Americans use.  But this would not be a negotiation as most Americans understand that term. In fact, it is more like a hostage negotiation. 

If a company does not agree to the “negotiated” price on one of its drugs, the government would slap a 95% tax on it.  And even though the government would ostensibly be negotiating on behalf of the Medicare program, drug companies would be required to offer private insurers that same “negotiated” price.  

As much as the president and his allies in Congress would like to try, there is one law they simply can’t repeal:  the law of supply and demand.  It is a law the original War on Drugs crowd could never overcome, and Biden would have no better luck this time. Indeed, by artificially lowering the price of prescription drugs, he would ensure a lower supply and fewer new potentially lifesaving cures and therapies coming to market.

A recent significant analysis by economist Tomas Philipson of the University of Chicago found that drug price controls would lead to as much as a 60 percent reduction in drug company research and development from 2021 to 2039. According to Philipson, that means anywhere from 167 to 342 fewer new drug approvals during this period, and he notes that his estimates are “conservative.”  To put this in perspective, from 2001 to 2020, the FDA approved 671 new drugs. 

It stands to reason that price controls will curtail the development of new drugs. Another study found the approval rate for drugs entering clinical development is just 12 percent. That means the profits on the small number of approved drugs must also cover the development costs of the others that never make it to market.  If you fix the price of the successful drugs, there has to be less for companies to plow into research on new cures. 

How should someone dealing with any number of cancers or rare diseases take this news? What if one of those drugs that never makes it to market could be the one that ends up saving their life?

We here in America have been very fortunate to have access to more new drugs and treatments than anywhere else in the world.  We know from other countries like Canada that putting the government in control of prescription drugs leads to rationing and shortages that put people’s lives at risk. While Americans enjoy access to 89 percent of new drugs, Canadians only have access to about half, because their government deems most new drugs “too expensive.”

The pandemic has shown that the way to get Americans more and quicker access to life-saving drugs and treatments is to get government out of the way and empower the innovators. Washington is completely ignoring this lesson.

To reduce costs for consumers, the federal government should promote more competition for prescription medicines and end the red tape that makes drugs more expensive. 

For example, the FDA is too slow and bureaucratic. It needs to get faster at approving generics and biosimilar drugs, and the agency should be required to allow Americans access to drugs that have been approved in other developed countries. Additionally, Congress should make permanent the temporary regulatory changes that helped bring the Covid vaccine to market in record time. 

When it comes to prescription drugs, we all want affordability. But lower prices are meaningless if people cannot get the drugs they need in the first place.

Joe Biden has seen the error of his ways and reversed course on the illegal drug war. Hopefully he will do the same with this new war on prescription drugs before it is too late.

James Davis is president of Touchdown Strategies, a mission-driven PR and marketing firm based advancing liberty and economic opportunity for all.