The Human Cost of Pharmaceutical Price Controls is Too High | Citizens Against Government Waste

The Human Cost of Pharmaceutical Price Controls is Too High

The WasteWatcher

The resurgence in the Senate of the Build Back Better Act (BBBA) is mainly focused on healthcare, although that could change before the bill is brought to the floor for a vote.  Whatever they decide, the deplorable prescription drug price controls are likely to remain in the bill.  This will significantly decrease the research and development needed for future cures and leave an invisible graveyard of patients who will never receive what they need to save their lives.

An August 2021 Congressional Budget Office (CBO) Simulation Model of New Drug Development report projected that H.R. 3, on which the drug price control provisions of the BBBA are based, will decrease new drugs entering the marketplace by 8 percent in the third decade, resulting in at least 60 lost treatments.  But a November 29, 2021, issue briefpublished by University of Chicago economists Dr. Thomas Philipson and Troy Durie, found that the healthcare provisions of the BBBA “will reduce revenues by 12.0 percent through 2039 and therefore that the evidence base predicts that R&D spending will fall about 18.5 percent, amounting to $663 billion. We find that this cut in R&D activity leads to 135 fewer new drugs. This drop in new drugs is predicted to generate a loss of 331.5 million life years in the U.S., 31 times as large as the 10.7 million life years lost from COVID-19 in the U.S. to date. These estimated effects on the number of new drugs brought to market are 27 times larger than projected by CBO, which finds only five drugs will be lost through 2039, equaling a 0.63 percent reduction.” 

In other words, the projected amount of life lost if the Senate agrees to price controls on drugs is the equivalent of every one of the 329.5 million Americans alive today dying at the same time.

As senators sit down with their families over the August recess, they should consider who among them – spouse, mother, father, sister, brother, children, or grandchildren – will not get the treatment or cure they will need to save their lives from disease if the senator votes in favor of the price controls that will be in the revised BBBA. Making this decision more personal may be sufficient to change a few minds, since it will only take one vote against the bill from among the 50 Democrats and Independents in the Senate to stop this from being passed. Otherwise, they will be financially and morally responsible for the resulting devastation to pharmaceutical research and development that will result in higher costs, less accessibility, and fewer treatments and cures for every member of their family, and every other American.  

There is no justification for the impact these price controls will have on the American people. There might be a short-term reduction in costs since they will be mandated by the government, but over the long term, price controls never lower costs, and losing a single life because a future cure is not created is one too many.