Over the next 17 years, the Manchin-Biden Build Back Better socialist price control scheme would reduce drug industry research and development by about $663 billion, resulting in fewer new medicines, writes University of Chicago Professor Tomas Philipson in Newsweek. In fact, the bill would negate by nine times Biden’s “Cancer Moonshot” initiative funding for cancer research.
“This will amount to a loss of 330 million life-years, about 30 times the loss from COVID-19 so far. The associated loss in value is more than $66 trillion, with longevity conservatively valued at half the amount used by agencies such as FDA and EPA. No economic gains have more value than living longer to see those gains.
“Losses could include cures for Alzheimer’s, cancer, and so much more. Indeed, nearly 50 percent of today’s FDA pipeline is for new cancer medicines—and the bill would cut the amount spent on cancer research by more than nine times as much as Biden’s ‘Cancer Moonshot’ initiative raises it.”
- These price controls will reduce American life expectancy. “Economic evidence shows that growth in life-expectancy is as important as GDP growth in lifting U.S. well-being. Put differently, few people would give up a year of their lives in order to gain an inflation-free year with marginally higher growth. Emphasizing the reduced economic effect of the so-called Inflation Reduction Act is akin to rejoicing that a hurricane spared the house, even though its owners died.”
- Price controls reduce quality of care. “Price controls on prescription drugs, meanwhile, would also reduce quality of care by reducing the number of better new treatments coming to market. If manufacturers refuse to accept the government’s dictated prices, they’d face punitive financial penalties.”
- Democrats are subsidizing insurance for those who don’t need it. “Taxpayers currently spend about $17,000 per newly insured person on these ACA subsidies. Those are public resources that could cover more people if spent more wisely, instead of being a de facto corporate welfare program for insurers. Indeed, about 75 percent of the enhanced subsidies went to people already insured. Many Americans enrolled in Obamacare plans are middle- and even upper-income and already had insurance through their employers, which they dropped to enroll in artificially cheap exchange plans instead.”
Studies show these drug price controls kill innovation and new cures:
- Price controls eliminate incentives to innovate: 12 firms studied had invested more than $400 billion in the U.S. pipeline to produce cures and treatments that represent a substantial portion of each firm’s revenue. Half of the companies researched in the study saw a reduction of their net earnings down to a third of what they earned previously, and the average reductions across the entire group were roughly over half what they earned previously.
- Patients suffer from lost cures and treatments: 104 treatments we have today would not have come to fruition under the Democrats’ cures-killing policies. Those cures touch a wide variety of diseases—cancer, depression, hypertension, and rheumatoid arthritis, to name a few—affecting hundreds of millions of Americans.
- Kneecapping American leadership in innovation: The firms studied represent more than half of all global innovative investment.
- Sending American jobs overseas: Democrats’ takeover of this industry will ship investment to China and other competitors overseas. Further, the study estimates the proposed legislation will also likely lead to the loss of over 590,000 U.S. biopharma jobs.
The vast majority of Americans oppose government negotiation if it results in fewer new medicines being developed in the future.
- A 50-state Morning Consult/PhRMA poll shows two thirds of Americans oppose price controls if they put the government in charge and take away power from doctors to prescribe medicines that best meet the needs of patients.
- The Kaiser Family Foundation also finds that Democrats’ price control scheme drops in popularity the moment respondents see that it oculd lead to less research and development of new drugs or limit access to newer prescription drugs.
- A March 2022 Ipsos/PhRMA poll reveals only 14 percent of Americans support Washington price controls if they limit their access to newer prescription medicines. Even if it “only” delays access, only 15 percent support the proposal then.
- The same poll shows that seniors are even more skeptical – 10 percent support the price controls when they learn of how it delays people’s access to new medicines.