The threat of drug price controls is returning—here’s what’s happening and why it’s still a misguided policy proposal.
What’s happening: Democrats have reportedly “finalized” a drug pricing proposal “largely similar to the blueprint that Democrats put forward last year,” reports The Washington Post. The proposal would allow the government to fix the prices of certain drugs, “penalizing companies that raise prescription prices faster than inflation.”
But prices of brand-name drugs continue to fall,BIO experts have explained time and again—and drug prices are seeing the lowest increases for inflation across all health care categories.
What price controls will do is throttle innovation—eliminating the incentives to conduct risky, expensive R&D.
What legislation would really make a difference for drug prices? The Pharmacy Benefit Manager Transparency Act, which is making its way through the Senate and targets drug middlemen who can drive markups in drug prices.
BIO supports legislation to reduce patients’ out-of-pocket costs—but price controls would “disrupt our innovation ecosystem and crowd out the next generation of new therapies that could transform the standard of care for patients and help bring down our nation’s long-term health care costs,” BIO President and CEO Dr. Michelle McMurry-Heath has said.
Gear up for a busy summer. With Sen. Joe Manchin (D-WV) reportedly on board, Democrats “hope to adopt the drug pricing plan as part of a larger economic package that they would advance through the narrowly divided Senate using the process known as reconciliation,” explains The Washington Post. This would allow the Senate to pass it with a simple majority, according to Forbes.
Listen: How Drug Price Controls End Up Hurting Patients