Presidential administrations rarely act so destructively as to appear to be motivated by malice. But what President Joe Biden’s administration is doing on prescription drugs appears to be an effort to impose price controls on drug companies and impose punitive excise taxes on companies that resist.
“Improved access to drugs, especially in poorer countries, could save 10 million lives each year, 4 million of which could be lost in Africa and Southeast Asia.” United Nations estimates The assessment did not address how government policies impede access to life-saving medicines.
We fund billions of dollars in research and development to produce new medicines. We drive innovation. Or we used to be, anyway.
Governments in countries with “low” prescription drug costs impose those costs on companies in several ways. First, they just drag down the drug approval process. 2019 Survey The Journal of the American Medical Association investigated “differences in the availability of new drugs in Germany and the United States” and found that “compared to the United States, fewer new drugs are available in Germany and they are brought to market more slowly.” It turns out. time. ”
JAMA reports “a study comparing 599 drugs approved in the U.S. and Germany between 2004 and 2018” and found that “92% of all new drugs approved in both countries were available in the U.S.” , 80% were available in Germany. The median approval period in Germany has been extended by four months. ”
That meant Americans had access to more drugs, and they were able to get them faster than Germany.
Germany is not unique. Governments in countries with socialized medicine systems prevent new drugs from entering the market while they “negotiate” the price the government will pay. This process adds significant time to the approval process.
Four months may not seem like a long time, but for people suffering from diseases where new treatments and the latest and most effective treatments are held up by bureaucrats to set prices. It can last a lifetime. It’s not a “negotiation” at all. The government typically issues an ultimatum: “Accept what we’re asking for, or we’ll seize it.” theft) Obtain your patent and have a domestic company manufacture your drug.
The Biden administration is also currently asserting that: have power Seize drug patents if the companies that own them do not yield to government price demands.
When other countries force lower prices than the market would produce, the subsequent shortfall must be made up elsewhere. Other locations are typically the United States.
We fund billions of dollars in research and development to produce new medicines. We are the world’s leading innovators. It is no coincidence that the United States dominates the pharmaceutical market. America powers innovation.
Or we used to be, anyway.
In addition to the power to seize patents, the Biden administration is also asserting the power to impose a 95% excise tax on companies that do not “negotiate” with Medicare until the president is satisfied.
As part of the Inflation Control Act, the president, for the first time in history, was given the power to negotiate the prices of a limited number of prescription drugs on behalf of the government. If the government is dissatisfied with a drug company and cannot reach a compromise, or if the drug company simply refuses to comply with the federal government’s orders, the government can impose a 95% excise tax.
Call it whatever you like — compulsion, blackmail, theft –But please don’t call it “negotiation.”
For now, the administration’s power to “negotiate” drug prices is limited. But unless Congress intervenes, its powers will expand. That’s a path to decimation of the U.S. prescription drug market.
If you have a loved one who needs prescription drugs to treat a chronic illness or someone who is battling an inoperable disease, this should really scare you. It kills innovation and ultimately will do the same to Americans who rely on drugs to survive and thrive.
