Today, House Speaker Nancy Pelosi (D-Calif.) released the official summary and backgrounder of H.R. 3, “The Lower Cost Drugs Now Act,” although as of this posting, there is no bill language.  It would exert so much government authority over the pharmaceutical industry that it would equal anything that communist and socialist leaders in other countries have done to control various sectors of their economies.

The House Energy and Commerce Committee will hold a hearing on H.R. 3 on September 25.  Other committees that have jurisdiction over the legislation, like the House Ways and Means Committee, will also consider the bill before it is brought up for a floor vote.

The proposal laughably states the secretary of Health and Human Services would “negotiate” with drug companies over the price of a drug.  While up to 250 drugs that lack competition and have the greatest cost to Medicare and the commercial market would be identified as targets, the Secretary would be required to negotiate at least 25 drugs annually. If a company refuses to accept the government’s maximum fair price, it would be hit with up to a 95 percent excise tax on the previous year’s annual gross sales of the drug in question. 

This is not negotiation, it is criminal enterprise-level extortion.

The maximum fair price “negotiated” would be no higher than 120 percent of the prices in six countries, which utilize price controls and as a result have severely damaged their pharmaceutical industries.

It includes an inflation tax for drugs in Medicare Part B and D, another price control, that would not be used to help patients but simply be plowed back into the U.S. treasury.

The supposed savings from the price controls, after broad swaths of U.S. biopharmaceutical industry have been severely harmed or destroyed, would be used by government researchers to find new cures and treatments, because government is just so super-efficient in everything it does.

The U.S. leads the world in biopharmaceutical research and development, yet Democrats continually fail to understand that profits and private investment help drive innovation and create better products for everything.  Investors will not risk financing an industry that has been cut off at the knees by the government.

The Pelosi plan will not only fail to lower drug costs, it will also destroy the research and development of innovative medicines that are tackling serious diseases like Alzheimer’s and Parkinson’s, diabetes, cancer, and other chronic conditions.  It represents the worst of what government can do to a thriving industry that saves lives and it must be stopped from ever becoming law.