Senate HELP Committee Should Reject Rx Drug Price Controls

On Thursday, the Senate HELP committee will consider a series of bills, and entertain amendments. Senator Bernie Sanders (D-Vt.) will offer several amendments to impose socialized medicine on American patients in the area of prescription drugs. Senators committed to making healthcare more affordable using proven free market solutions should reject his amendments.

Sanders Amendment 5 would permit anyone to steal the patent for any prescription drug the government deems too expensive. Imagine if that was the case in (say) video games. If the government thinks a video game is too expensive, Sanders would presumably support letting others rip off that game and sell it themselves. Why would anyone invent anything anymore if they didn't have patents and copyrights to protect their hard work and investment of time and money?

Sanders Amendment 6 violates another area of the U.S. Constitution, this time the First Amendment, by banning advertising of prescription drugs. Apparently it's ok to sell hamburgers, it's ok to sell cars, but it's not ok to sell prescription drugs. We all say we want patients to be better consumers. Well, part of being a consumer is being advertised to, which often starts the conversation between a patient and her doctor about treatment.

Sanders Amendment 7 is the worst of all. It would expand the failed Biden "Inflation Reduction Act" (IRA) price controls (which have backfired by torpedoing new drug research funding) from Medicare, where it is limited to today, to all private sector group health insurance. If you get your health insurance from your job, that means you.

Price controls don't work, because you can't force people to lose money. Eventually, the too-low price means that the controlled good or service stops getting sold. That means shortages. And shortages mean government rationing. Recently, 50 conservative groups (including CFE) signed a letter opposing President Trump's government drug control plan. It's just as bad when Bernie Sanders is looking to expand Joe Biden's failed price control regime.

A couple of years ago, CFE hosted a "price controlled beer night" at Bullfeathers, a popular bar for young staffers across the street from the U.S. Capitol. Beer sold for just $1 per pint. Not surprisingly, we packed the place, and soon ran out of beer. It was a lesson in economics that everyone there will remember--price controlling something too low means that scarcity is the ultimate result. Shortages of drugs and no new research into new drugs is the inevitable outcome of price controls on medicines.

These amendment ideas are silly. If we want lower prescription drugs, there's a great way to do it: get countries overseas to pay the fair market value for drugs, instead of letting them get away with price controls. That puts more money into the global system, and allows U.S. prices to come down without imperiling money for new cures and treatments. Only President Trump can do this, and it's part of his executive order on drug pricing.

It would also help if prescription drugs were bought and sold like everything else we use. That means getting pesky middlemen like PBMs out of the way. It means real and transparent prices, not opaque "list prices" and "rebates." It means advertising, and selling directly to the consumer, like TrumpRx is doing. If it's good enough for groceries (more important to keeping you alive than drugs are), it's good enough for the medicines we use.