Controlling drug prices is always a bad idea
One of the things that most people writing about policy won’t tell you is that how a new program gets paid is considerably less than how much is spent. Yet, in a nutshell, this is what is preventing President Biden’s “Build Back Better” program from being implemented.
It is not difficult to understand. The budget process lives up to its eyes in rules that should always appear to be followed. Whether they are, given the number of fig leaves available to hide what’s going on, doesn’t matter.
One “pay” that the White House keeps coming back to (because all new spending by the Biden administration will be “paid” with higher taxes and fees, etc.) is the government’s price controls on products. pharmaceuticals, especially those on which the elderly depend. People forget that George W. Bush largely solved the problem of the elderly and expensive drugs by expanding Medicare with a new law.
Still, some continued to agitate for prices to fall further, which helped produce Obamacare, another supposed solution to the problem. It wasn’t, but big government socialists whose real goal is a British-style national health service are using their failures as an excuse to rid the system of guarantees that keep drug prices reasonable for them. consumers, suppliers and manufacturers.
What Democrats have called for in the past – and may want to again in the coming days as another new “build back better” framework passes through Congress – is to fix the price of drugs sold through Medicare.
According to the Congressional Budget Office, a recently launched plan used tax penalties on drug companies to raise about $ 581 billion over 10 years. Now the White House is talking about repealing the Trump administration’s surrender rule which it says will bring in $ 145 billion. Other proposals, of a similar nature, will certainly come as it is not about cheaper pharmaceuticals but about the control of the American health system.
Another bill, the “Lowering Prices Through Fair Drug Price Negotiation Act,” would have been a loser of money between 2021 and 2023, the CBO said, then increase revenues between 2027 and 2030. Pay heavily for new spending today on the promise of an increase 7-10 years later, revenues are the kind of Washington gimmick that has helped the nation end up in its current tax mess.
The CBO also found that the tax penalties proposed in the original bill would encourage drug companies to pull drugs from U.S. markets as an avoidance measure. An excise tax on zero sales does not generate any income. Markets are dynamic even if the analysis is not. It’s a plan envisioned only by the kind of person who wanted to fail just to come up with a solution leading to the nationalization of an entire industry.
Let’s face it: most Americans are not Bernie Sanders or AOC and don’t have the passion for economic redistribution running through their veins. Above all, they want to eliminate the government so that the private sector can create jobs. All the government has given us since Biden took office is inflation. It should not be allowed to kill the goose that lays the golden eggs. The United States is the world leader in pharmaceutical innovations. Pricing in the private sector is illegal, and for good reason, which should send a signal about government-imposed price controls.
David Ricks, chairman of the board of directors of PhRMA, warned of the dangers of price controls in the Boston Globe several weeks ago: “(These) price controls would reduce the industry by 40% or 100 billion dollars. dollars of income per year. Our industry as a whole invests about $ 100 billion a year in research and development.
You can report his conflict of interest here, but having one doesn’t hurt.
The American health care system has been disrupted, with sick people subsidizing care for healthy people. Controlling the prices of drugs paid for by Medicare will not solve the problems that still plague our health care system. It is a terrible policy and insufficient “pay for”. It belongs in the trash with the wealth tax and other bad ideas.
Peter Roff is a former UPI and US News & World Report columnist who is now affiliated with several Washington DC-based public policy organizations. Contact Roff at [email protected]