Biden’s Parting Insult: More Killer Drug Price Controls |
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By Timothy H. Lee
Thursday, January 23 2025 |
In its reckless departure from the White House amid a flurry of unseemly pardons and executive orders, the Biden administration seemed to save the worst for last. Namely, one underreported but consequential item among that flurry was an action that could haunt Americans for years to come unless interrupted by the incoming Trump administration: a new wave of drug price controls. Last week, the Biden administration announced 15 new drugs that will now be subject to price control mandates under the guise of Medicare “negotiations,” atop 10 drugs subjected to similar treatment last year. That spells potential disaster for Americans, because price controls reduce patients’ access to medicines and threaten future research, development and critical investment. That’s not simply some theoretical exercise. It’s actual experience and history. To illustrate, activists on the political left and other voices who should know better often praise other countries’ price control regimes. The simple reality, however, is that many lifesaving drugs do not become available at all for citizens of those nations. For instance, out of 270 new medicines introduced to United States citizens from the years 2011 through 2018, only 52% became available to our neighbors to the north in Canada. So much for the merits of Canadian socialized medicine. Further illustrating the point, only 41% of those new drugs available in the U.S. became available to Australians, 48% of them to the Japanese, 53% to citizens of France, 64% to those suffering under the British socialized medicine regime and 67% to German consumers. Americans simply access far more new and improved pharmaceuticals than citizens of other industrialized nations that too many voices in America foolishly seek to emulate. Remaining on that international theme for a moment, the negative impact of drug price controls on medicine availability actually remains accepted consensus among international authorities as well. Believe it or not, none other than the United Nations World Health Organization (WHO) itself acknowledges the point: [P]rice controls, combined with the threat of market lockout or intellectual property infringement, prevent drug companies from charging market rates for their products, while delaying the availability of new cures to patients living in countries implementing those policies. That also accords with the warnings of economists at the University of Chicago, who cautioned against the Biden administration’s government price control proposal back in 2021: The United States has far fewer restrictions on price than other countries, but the Biden Administration has announced their goal to lower drug prices through greater price regulation. … [N]ew drug approvals will fall by 32 to 65 approvals from 2021 to 2029 and 135 to 277 approvals from 2030 to 2039. These significant drops in new drug approvals will lead to delays in needed drug therapies, resulting in worse health outcomes for patients. (Emphasis added.) Once again, the theoretical has been affirmed by actual lived experience. Just last year, the American Society of Health-System Pharmacists sounded the alarm that drug shortages reached a record high in the United States: Last summer, ASHP shared findings from our most recent survey of drug shortages and called for action on what was a near-record number of active, ongoing shortages. The situation has worsened this year. During the first quarter of 2024, ASHP and our partner, the University of Utah Drug Information Service, tracked 3323 active shortages. This is an all-time high, surpassing the previous record of 320 shortages in 2014. All drug classes are vulnerable to shortages. Accordingly, we must leverage public policy to do everything in our power to maximize drug availability, not inhibit it. Although drug shortages and lower innovation and investment follow price controls just as night follows day, Senate Democrats this week nevertheless sought to double down on the Biden administration missteps under the so-called Inflation Reduction Act. Fortunately, the incoming Trump administration already initiated the process of mitigating rather than amplifying Biden’s misguided policies, issuing an executive order this week rescinding earlier Biden administration orders. That’s a step in the right direction, but much work remains. Congress can also act. Efforts such as reintroducing and passing the Ensuring Pathways to Innovative Cures (EPIC) Act would help restore incentives to develop new life-changing medicines that have been stifled under the Biden administration. Whatever the fate of the disastrous Inflation Reduction Act and other laws and regulations of the Biden tenure, President Trump knows that the success of his first term resulted from deregulation, lower taxes and freer markets. Let’s hope for continued progress in that direction over the next four years, particularly in the realm of lifesaving and life-improving pharmaceutical innovation on which so many Americans depend. |
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