Drug-price controls make Dems’ bill the Lifespan Reduction Act


Across the pond, Brits are demanding their next prime minister do something to reduce the United Kingdom’s notorious cancer death rates. But here in the United States, Democrats are doing the opposite.

They’re pushing for European-style price controls on drugs, which will slow cancer cures and lead to more deaths. Americans enjoy the highest cancer-survival rates in the world. But maybe not for long.

Democratic Sens. Chuck Schumer and Joe Manchin call their legislation the Inflation Reduction Act. Don’t let the title fool you. The bill cripples the ability of drug companies to develop new cures. It should be called the Lifespan Reduction Act.

The bill empowers the federal government to impose price controls on top-selling brand-name drugs starting in 2026. Virtually all health experts agree these price controls will discourage innovation.

The only disagreement is how grave the impact will be. The Congressional Budget Office lowballs the number of new drugs that will never be developed and declines to predict the “effects of forgone innovation on public health.” But the Office of Health Economics, a think tank, foresees “significant losses in biopharmaceutical innovation and hence health for the U.S. and global populations over the coming decades.”

The Global Colon Cancer Association, which helps patients battling cancer, warned Tuesday that the bill will backfire, “leading to less of the medical innovation we need to finally defeat cancer.”

With the passage of the bill, this speed will slow.
The bill cripples the ability of drug companies to develop new cures. It should be called the Lifespan Reduction Act.
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Amazing that Congress is ignoring these warnings. Democrats are bragging about reducing prescription-drug prices but not admitting you could be paying for that discount down the road with your life.

Democrats claim the government will “negotiate” with drug companies to reach a fair price. Untrue. The bill says government will dictate the price. Any company that refuses that price will get hit with a tax as high as 95% of revenue. That’s a gun to the head, not a negotiation. Democrats are playing word games with “negotiate,” just as with “recession.”

Medical investors look at the expected future revenue from a drug to decide how much to invest. Even non-American companies rely on selling in the US market for their profits. But the proposed price controls tell investors to put their money in some other industry, not medical innovation.

Now drug development in Europe attracts only 3% of the investment capital available in the United States.
European drug developers led globally until price controls shut down innovation. 
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European drug developers led the world until price controls shut down innovation. Now drug development in Europe attracts only 3% of the investment capital available in the United States. It’s a warning.

Countries that promote drug development have better cancer survival rates, reports Columbia University economist Frank Lichtenberg, who compared rates in 36 countries. 

The United States proves the point. Cancer death rates here have plunged in the last two decades. Research in the Journal of Medical Economics shows that from 2000 to 2016, more than 1.3 million patients were saved by new treatments for 15 different types of cancer.

Don’t expect that to continue under price controls. The University of Chicago’s Tomas Philipson and Troy Durie calculate that hundreds of potential cures will go undeveloped over the next decade, leading to a loss of life greater than what we’ve experienced from COVID. These are lives that would be saved if the current pace of innovation continued instead of being blocked by the Manchin-Schumer deal.

Is their price-control scheme even constitutional? The Congressional Research Service says forcing drug manufacturers to lower prices for all customers, not just government, might violate the “takings” clause of the Fifth Amendment. Certainly a 95% tax on revenues of companies that refuse could be considered “excessive” punishment under the Eighth Amendment.

Even so, Democrats are rushing to pass their 725-page bill, with its many varied provisions and cockeyed priorities. The bill pours hundreds of billions of public dollars into companies that install solar panels and build electric vehicles in the name of saving the planet.

But the same bill strips biotech and drug companies of the ability to attract billions in research and development funds and produce the next generation of cures. As if saving the planet is all-important and saving lives no longer matters.

Betsy McCaughey is a former lieutenant governor of New York.

Twitter: @Betsy_McCaughey



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