Resurrecting Failed Drug Price Controls Before the Midterms Won’t Help Americans

Democrats are desperate to show American voters that they are doing something—anything—before November and the expected red wave. But resurrecting old, failed ideas won’t help Americans.

The legislative clock is running out because the general consensus is that Democrats will lose big in the midterm elections, and their efforts to overhaul the role of government as we know it will be shelved. There’s no chance that the torrent of government spending on social programs and green energy subsidies will continue once the House and Senate are no longer controlled by the far left of the Democratic Party.

The countdown to November means that politicians, including those who vehemently opposed aspects of the Build Back Better only six months ago amid concerns of rising inflation, including Senator Joe Manchin, are now willing to play ball to pass something using the budget reconciliation process. Here are three points Americans need to remember as negotiations continue.

Number one: Every time the government says they will lower costs for services, including health care, they fail.

An extension of health insurance premiums subsidies under the Affordable Care Act is set to expire later this year. If legislators don’t act, consumers will see sharp premium increases when they start shopping for plans in October, right before the November elections. Many would lose their coverage or see premiums spike exponentially.

Democrats know they have to act. Politico has called the extension a “political time bomb,” and even Emily Gee, coordinator for health policy at the leftist Center for American Progress, admitted, “the timing of the subsidy expiration could not be worse…It is something that’s going to be highly visible to consumers.”

This is a perfect showcase of the government claiming it can help people and lower costs—when in fact, the opposite has happened with Obamacare. The government is simply not efficient or effective when it comes to delivering services for a competitive price.

Number two: Democrats want to introduce more government intervention into Medicare by “negotiating” prices—another way of saying they want to put price controls on drugs and other treatments. The fact is that Medicare Part D is already operating efficiently, and any “negotiation” wouldn’t be a negotiation at all. The negotiation would be more fittingly called coercion since proposals call for a 95 percent penalty tax to force drug companies to accept whatever price government bureaucrats deemed appropriate. Worse yet, Democrats have made clear their plan will also be used to siphon billions of dollars meant for Medicare to fund unrelated spending programs.

And lastly, any price controls instituted in the dynamic and complex pharmaceutical life cycle—like any price control in any other industry—would only limit access and diminish supply. It would also cut off the flow of newly discovered therapeutics and medicines into the healthcare system. In fact, a report from the University of Chicago predicted that the price controls proposed last year in the Lower Drug Costs Now Act would lead to a 29 to 60 percent reduction in R&D—equal to 167 to 342 fewer new drug approvals between now and 2040.

These bad ideas keep resurfacing even though numerous studies point out price controls are innovation-killers. Last year, a Kaiser Family Foundation survey discovered that 65 percent of Americans oppose drug price controls if it meant less R&D and fewer new treatments coming online.

There are plenty of good free-market ideas that deserve legislative consideration, including looking at the role that the Pharmacy Benefit Management industry plays in increased drug costs, streamlining the Food and Drug Administration’s approval process, and expanding health savings accounts to put people in charge of their own purchasing power for medications.

Plans to resurrect a weaker version of Build Back Better chockful of government subsidies and price controls in the name of “lowering” prices is an artificial and frankly misleading way of fulfilling election-year promises that won’t provide Americans any relief. If such legislation is passed, Americans can expect drug shortages, longer wait times for new treatments, and fewer innovative treatments ever reaching the marketplace.

Jack Kalavritinos is the Executive Director of the Coalition Against Socialized Medicine (CASM).