Let's Not Import Bad Ideas Like International Price Indexing | Citizens Against Government Waste

Let's Not Import Bad Ideas Like International Price Indexing

The WasteWatcher

How long do you think television companies would stay in business if the government told them to charge $200 for a TV even though the TV costs $250 to manufacture?  Not very long, but that is exactly what the socialists in Congress want to do with prescription drugs.

They want to use “international price indexing” (IPI) or “foreign reference pricing,” to determine the price of a drug used in the U.S. based on the price of the drug in foreign countries that use price controls and socialized medicine.

Those countries’ governments tell their pharmaceutical companies and their researchers what they can charge for a drug and that is why those countries have very little biopharmaceutical research.  It also explains why they free ride on the U.S.’s research and development. 

Adopting an IPI would usher in a whole host of awful consequences.  In countries with socialized medicine, access to medicines tends to be tight compared to the U.S.  For instance, in Japan, less than half of recent cancer drugs are available compared to 95 percent availability in the U.S.  That is why cancer patients in the U.S. tend to live longer.

Adopting an IPI would also destroy innovation in our healthcare sector.  If prices are decreed by government bureaucrats and politicians, there is less incentive for drug manufacturers to take on the risks for conducting expensive and complicated research and development clinical trials. That would mean fewer new cures coming to market, especially for rare diseases.

If Congress proceeds with IPI, it will be a step towards socialized medicine and government control over what potentially life-saving medicines you will have access to in the future. 

The government shouldn’t have the power to set prices, and Congress must not adopt international price indexing.

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The WasteWatcher: The Staff Blog of Citizens Against Government Waste