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Amidst Democratic Debate, Pelosi Unveils Controversial Drug Plan

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This week, House Speaker Nancy Pelosi began circulating a draft of her proposed drug pricing plan, one of the Democrats top policy priorities in Congress and on the campaign trail.

While Pelosi has emphasized that the plan is subject to change, the release of the notably progressive proposal is concurrent with this week’s Democratic Primary Presidential debate, which clearly brought the issue of healthcare affordability front and center.

As the 2020 campaign proceeds, it will be imperative for both the leading national candidates in last night’s debate, as well as Democratic congressional candidates, to take a reasonable and responsive approach that heeds voters’ concerns without disrupting many of the current systems in place that are favorable and effective.

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In the past, drug pricing has been a key policy area where bipartisan agreement has been struck and reforms succeed.

However, the plan that Speaker Pelosi is circulating does more harm than good by damaging many of the already successful structures that patients, and specifically seniors, rely on today.

In its current draft, the plan would allow drug prices to be directly negotiated by the government, specifically the Secretary of Health and Human Services.

Most concerning is that the government negotiation process would not only apply for those on Medicare, but also in private markets, and government-coordinated price controls set to overseas markets where significantly less research and development, as well as access to life-saving medications, takes place.

If pharmaceutical manufacturers do not want to negotiate with HHS, there would be an aggressive penalty fee totaling 75% of the gross sales in the past year of the specific drug being negotiated.

Simply put, this will do irreparable harm to the free market, a market that has led to the development of new medications that are cutting edge and potential cures; and this also has the potential to stop future cures from even making it to the patient.

Many Democrats, progressive and moderate, have already voiced their opposition to the plan.

Rep. Lloyd Doggett (D-Texas), who I have even disagreed with on drug pricing reforms in the past, noted that it “remains to be seen” whether the financial penalty will yield the intended results.

Rep. Ron Kind (D-Wis.) a more moderate Democrat said in a statement that Pelosi aggressive package, “doesn’t take down the bipartisan aspects” that lawmakers have tenuously worked on in recent years.

Indeed, allowing government interference in healthcare policy decisions, and specifically Medicare drug policy decisions is not patient centric and should especially not be linked to policies in other countries. Many of these countries artificially suppress prices through government-dictated access restrictions and arbitrary cost-effectiveness thresholds.

This proposal is also just another step towards a one-size-fits all approach to health care l and would rob patients of the globally-leading care they depend.

In fact, if the Democrats truly want to address rising health care costs, they can’t ignore the behavior of health plans, pharmacy benefit managers, and hospitals, which are major cost drivers.

A report released this year from Yale revealed that hospital prices for inpatient care increased a full 42% in less than a decade, from 2007 to 2014.

Further, pharmacy benefit managers drive up the cost of drugs by negotiating larger and larger rebates, but fail to pass these savings onto patients.

It is simply unacceptable to ignore these groups when it comes to drug pricing reform and Democrats in the House must revise this plan to be more patient-centric while also allowing pharmaceutical manufacturers to deliver the most innovate cures in the world to the American market.

Indeed, our country needs patient-first solutions if we are going to reach effective reform that substantively addresses the most pernicious components of this issue.

While our current systems are far from perfect, the US must continue to produce the most innovative treatments and cures in the world. We must seek to foster this development in our country, not regulate ourselves into mediocrity by placing government controls on the market.