The ink has barely dried on the
Inflation Reduction Act
, but certain misguided
Democrats
already want to up the ante on drug price controls.
Signed just over a year ago, the act’s
Medicare
drug price “negotiation” program is a disastrous policy not just for beneficiaries but the entire healthcare system. The devastating effects of these drug price mandates will harm innovation and severely reduce access to treatments that people rely on, and the scope of this incoming damage has yet to be fully realized. So why would Democrats propose a premature expansion of these price controls — this time into the private sector?
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Instead of waiting to assess the act’s damage to Medicare, Reps. Frank Pallone (D-NJ), Richard Neal (D-MA), and Bobby Scott (D-VA) introduced
H.R. 4895
, the so-called “Lowering Drug Costs for American Families Act,” which would ramp up government controls over drug pricing and preemptively deem the act’s Medicare experiment a success. Specifically, this bill would
extend
price controls into the private insurance sector, allowing private insurance companies to parrot Medicare’s “negotiated” prices.
But bleeding price mandates into the private sector would be a dangerous government overreach and an attack against the free market. It would not just be yet another step toward full-on socialized medicine — it would be a massive leap.
America’s competitive free market and natural incentives to innovate are the reasons the United States has led the world in developing new treatments and cures. Without these fertilizers for innovation, companies would be unable to invest in the painstaking trial-and-error process that creates new drugs for patients who are waiting for them. In fact, a
recent study
found that of the 121 therapies identified for price setting in the Inflation Reduction Act, about 70% of them would not have been developed if price controls had already been in place.
Instead of pushing for a policy that endangers the system that makes American medical innovation second to none, the government ought to be looking for ways to expand the free market’s success by taking on bad actors exploiting the ecosystem. Reining in the monopolistic practices of pharmacy benefit managers, for instance, would be an obvious first step.
The reasons H.R. 4895’s ill-advised expansion into private insurance plans would level innovation are simple. Arbitrary price caps would remove a key cornerstone of revenue manufacturers rely on to make a future of better treatments and cures a reality. Drugmakers have already sounded the
alarm
that price controls will significantly affect their ability to invest in the creation of new drugs. Some drug companies have already had to announce
research investment cuts
due to the Inflation Reduction Act’s heavy-handedness in Medicare.
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Unfortunately, it seems the Inflation Reduction Act was just the first step in the government’s march toward socialized medicine. But make no mistake: The only way to keep the U.S. the leader of medical innovation is to ensure that our citizens are not forced to endure the encroachment of socialist pressures seeking to take control of our health system.
The Inflation Reduction Act’s Medicare drug “negotiations” will have a devastating impact on the market forces that lead to the accessibility of innovative, life-saving drugs. We must halt further Democratic attempts to implement more government controls in healthcare before these actions snowball into a failed system of socialized medicine.
Jack Kalavritinos is the executive director of the Coalition Against Socialized Medicine.
