The Lower Drug Costs Now Act (H.R. 3) and similar proposals keep rearing their heads in Congress with the purported aim of lowering prescription drug prices and improving Medicare. The problem is, such proposals are shortsighted and ultimately lead to lower quality, fewer options, and diminished health outcomes.
H.R. 3, which has been around for years and like a vampire just won’t seem to die, would cap prescription drug prices at no more than 120 percent of the prices paid in six countries (Australia, Canada, France, Germany, Japan, and the United Kingdom). The theory is that by importing foreign price controls from those countries, Medicare, Medicaid, and private payers could save hundreds of billions of dollars over the coming decade.
On its face, it sounds like a great idea to have lower drug prices such as they have in those countries. The problem is, the governments in those nations set artificially low reimbursements for medicines—in other words, they employ a heavy-handed, socialist system of drug pricing.
If H.R. 3 or anything like it were to pass, it would suck the lifeblood from the pharmaceutical industry, where we would certainly see a drastic reduction in investment in biomedical research and development.
According to data highlighted by the California Life Sciences Association, by incorporating foreign price controls into the Medicare Part D program alone, H.R. 3 would cause a 58 percent reduction in pharmaceutical industry revenue, “significantly reducing the investment capital available for partnerships and licensing agreements with emerging companies, and therefore lead to an 88 percent reduction in new medicines developed by small U.S. biotech companies.”
Thus, H.R. 3 would dramatically curtail the development of new therapies to treat some of the world’s most pressing health challenges: cancer, rare diseases, lupus, Alzheimer’s disease, and many others.
In addition, some of those foreign countries that H.R. 3 would have America emulate, including the United Kingdom and Canada, make drug reimbursement and coverage decisions based on cost-effectiveness assessments tied to the quality-adjusted life year (QALY). QALY assessments are based on what officials consider to be the value of living with a medical condition in comparison to being in “perfect health.”
Thus, QALYs assign a lower value to treatments for people who are expected to live fewer years, to treatments for populations that are expected to have shorter lifespans (including people born with disabilities), and, by default, to treatments focused on populations that have faced historical inequities in the health care system.
Along a similar vein, some members of Congress want to tie drug prices in Medicare to the prices in the Department of Veterans Affairs (VA). Yet the VA system not only employs the QALY assessments that discriminate against seniors, disabled people, and communities of color but also applies a one-size-fits-all method that restricts access to medicines to such a degree that most VA beneficiaries rely on other sources, including Medicare Part D, to supplement their drug coverage.
Since the onset of the COVID-19 pandemic, we have seen firsthand the impressive ability of American scientists to produce vaccines at record speeds. Government price controls would create a huge barrier to innovation and would leave many patients—especially the most vulnerable—high and dry and just waiting to die.
We need scientists to continue researching and developing breakthrough medicines. Sacrificing future innovation to achieve some short-term financial savings would ultimately hurt patients.
Indeed, the concept of “paying it forward” could hardly be more compelling than in the case of discovering life-saving therapies and treatments for our most pressing healthcare challenges. The selfishness implicit in injecting socialist price controls into the pharmaceutical market is astounding.
That’s why Congress should once and for all drive a stake in the heart of H.R. 3 and its kin.
