Pelosi's Drug Bill Has a Huge, Hidden Price Tag
By Candace DeMatteis
House Speaker Nancy Pelosi just released a bill that would allow government regulators to set artificially low prices for hundreds of medicines.
These price caps would stifle medical research, making it harder for scientists to cure Alzheimer's and a host of other chronic diseases that currently burden millions of families and threaten to overwhelm the healthcare system in the coming decades.
The Lower Drug Costs Now Act would impose outright price controls on common treatments for everything from cancer to multiple sclerosis. If companies don't comply, they'd face a substantial penalty of 95 percent of gross revenues from the drug.
Price controls could save the government a considerable sum in the short run. But any savings would come at the expense of medical progress. It takes as much as $2.6 billion for research companies to bring one new drug to market.
Consider efforts to cure Alzheimer's disease, which have greatly impacted me and my family. My uncle is now in the final stages of Alzheimer's disease. Watching such a vibrant, fun-loving, outgoing man disappear by inches without any opportunity for improvement is heartbreaking. As our population ages, millions of other uncles, aunts, parents and grandparents could face similar fates; Alzheimer's alone threatens to overwhelm our healthcare system.
Companies have already invested billions in the search for a treatment to alter the progression of Alzheimer's disease with very limited success.
Sadly, scientists may never find a cure for Alzheimer's if price caps take effect. Researchers would struggle to attract funding for new research projects. Companies might pull the plug on experimental treatments in the development pipeline, thereby depriving patients of breakthrough medicines.
In the long run, price controls could increase costs for patients and the government. More than 190 million Americans suffer from at least one chronic disease. That number continues to grow. Over the next decade, chronic diseases could cost patients and taxpayers almost $42 trillion, cumulatively. New cures could revolutionize medicine and reduce overall health spending, but they won't be developed unless companies have market incentives to fund research.
Smart public policies can trim healthcare costs at the margins. But there are only two ways to substantially slash overall healthcare spending -- prevent people from getting sick, or help them manage their conditions to avoid costly hospitalizations.
Both solutions require new treatments and cures. If researchers discovered a treatment that delays the onset of Alzheimer's disease, our health system could save $650 billion within five years.
All told, new and better medicines could save our health system $6.3 trillion and save 16 million lives by 2030, according to a study by my organization, the Partnership to Fight Chronic Disease.
Though well-intentioned, Speaker Pelosi's bill is penny-wise and pound-foolish. In exchange for some government savings today, it sacrifices much needed medical breakthroughs that could save trillions of dollars and millions of lives tomorrow.
Candace DeMatteis is the policy director at the Partnership to Fight Chronic Disease.
