Trump's healthcare plan would hurt NC
Friday, August 9, 2019
The Trump administration is considering a draft regulation to lower drug prices. North Carolinians have little reason to celebrate.
The administration’s proposal would impose price controls in Medicare. Rather than helping patients save money, this drastic step would stifle access to state-of-the-art drugs for folks across the country, including many right here in North Carolina.
It’s up to lawmakers in Congress — especially dedicated patient advocates like Senator Richard Burr — to defeat this misguided reform.
The proposal would impact Medicare Part B, which covers complex medicines administered by doctors. Currently, Part B pays more for these drugs than the government insurance programs in other developed countries, such as the United Kingdom, Canada and France.
That’s because, in those countries, the government strictly controls drug prices. For example, Canada’s Patented Medicine Prices Review Board determines the price of every new medicine that’s released. If a drug company refuses to accept the government-dictated price, these countries simply refuse to cover the medicine in question.
It’s certainly unfair that foreign countries underpay for the latest drugs, many of which are created right here in the United States. The administration’s plan is meant to level the playing field by tying reimbursement for Part B drugs to the prices paid in 14 other developed countries, most of which rely on price controls.
Unfortunately, this model doesn’t crack-down on these price control schemes — it copies them. That means copying their negative impact as well.
Drug companies are eager to launch their products in countries like the United States that pay market prices for medicines. That’s why 95 percent of cancer drugs released in the last few years were immediately available in the American market. By contrast, Canadian patients had access to only 58 percent of them, while only 65 percent were available in France.
If the government imposes price controls in Medicare, it will discourage drug companies from launching their medicines as quickly as possible in the United States. Patients would suffer.
Reduced access to the newest cancer treatments would be especially devastating here in North Carolina, where cancer is already the leading cause of death. This year alone, 20,400 state residents will succumb to this deadly disease.
The long-term consequences of embracing price controls would be even worse. By adding uncertainty to the drug development process, price controls would cripple innovation.
It costs about $2.6 billion to bring a new drug to market. That process can stretch on for over a decade, and often ends in failure. Innovators are willing to make these risky investments because creating a single successful drug can enable them to earn back their upfront costs, reward investors, and fund future research.
That incentive will disappear if the government can set artificially low prices for drugs. Without the possibility of earning a return on their investments, drug companies would view research and development as an all risk, no reward proposition.
Consequently, they’d scale back investment into new treatments for cancer, Alzheimer’s, diabetes and countless other conditions. Generations of patients would be denied medical innovations that could be just around the corner.
These changes should worry North Carolinians, especially those with family members suffering from Alzheimer’s. North Carolina is currently home to 170,000 individuals with the disease. That number is expected to rise more than 23 percent over the next six years.
Despite being the nation’s sixth leading cause of death, progress in treating Alzheimer’s has been dispiritingly slow. Only five Alzheimer’s drugs have ever been approved by the Food and Drug Administration, and no new drugs have earned approval in over 15 years.
The administration’s proposed price controls would only add to the challenges of discovering new therapies for the disease.
Sen. Burr has advocated long for Alzheimer’s patients. He cosponsored the Alzheimer’s Breakthrough Act, which aimed to increase the federal government’s Alzheimer’s research efforts. He also championed a law that provides funding to help find missing Alzheimer’s patients.
Sen. Burr’s work could be undone if price control policies spread to the United States. With any luck, he and his colleagues won’t let that happen.
Mary Griswold is a New Bern resident who authors the blog rightwinggranny.com and is member of the Coastal Carolina Taxpayers Association. Drew Johnson is a senior fellow at the National Center for Public Policy and a government watchdog columnist at Newsmax.