Some policymakers in DC are laser focused on giving the government the power to “negotiate” in Medicare. What they aren’t saying is that this isn’t negotiation at all. They essentially just want the government to dictate medicine prices.
The latest drug pricing plan in the Build Back Better Act, Speaker Pelosi’s proposal (commonly known as H.R. 3), proposals that would tie medicine prices in Medicare to prices paid by the Department of Veterans Affairs – all are attempts at implementing a price control approach where the government has unprecedented, sweeping authority to set prices for your medicines. Each of these so-called negotiation proposals, no matter what name is used, would have the same problem: negative consequences for patients.
How do we know? Because history has shown us that’s exactly what will happen. In other countries that have resorted to these and other government price setting mechanisms for medicines, patients have access to fewer new medicines and wait longer to get the medicines they need. And investment in research and development of new medicines has decreased and led to fewer new medicines getting developed in those countries.
This was confirmed by a new analysis from Vital Transformation that looked at the impact of government price setting on the European biopharmaceutical ecosystem. According to the analysis, every 10% reduction in medicine prices in markets relying on government price setting resulted in an 8% increase in the delay of access to medicines. The authors also observed that as European countries continued to use government price-setting policies to control drug spending, there were continued declines in biopharmaceutical industry investments in the Europe Union relative to the United States. From 2003 to 2019, biotech investments in the United States increased sixfold, while they remained static in the European Union.
Whether through referencing international or domestic government prices or setting a price cap tied to mandatory discounts, the end result is the same: government interfering to dictate the price of medicines and putting patient access to medicines and future innovation at risk.
Don’t let anyone on Capitol Hill pretend otherwise.