Rumblings on Capitol Hill and encouragement from the Biden administration are making the passage of the Build Back Better Act (BBBA) in some form a genuine threat.  Even though Sen. Joe Manchin (D-WV) led the charge in his party on stalling the $1.75 trillion BBBA in its original form, there is a real possibility that the bill will be split apart and voted on piecemeal.  But that strategy will require support from Republicans for nearly all of those parts of the bill, since the use of reconciliation, which requires only a majority vote, is severely limited.

President Joe Biden met with 10 high-profile business leaders on Wednesday, January 26, to discuss the BBBA and a possible BBBA 2.0.  The BBBA 2.0 could be included in Biden’s State of the Union Address on March 1.  Taxpayers may have won the battle by temporarily shutting down the BBBA, but fighting off big government socialism is a war, and passage of any part of the BBBA in any form could devastate America.

That is certainly true for the BBBA’s healthcare provisions, which include price controls that will hinder research and development and result in higher prices and fewer future cures.  They would also harm patients and eliminate consumers choice.

Price controls have failed throughout history and continually led to rationing and shortages.  If passed in any form and implemented in the healthcare market, the consequences of waiting for or never receiving a lifesaving drug is nothing at all like the impact of waiting on long lines for gas in the 1970s.  A Congressional Budget Office (CBO) Simulation Model of New Drug Development projects that H.R. 3, the price control provision found in the BBBA, will decrease new drugs entering the marketplace by 8 percent in the third decade, resulting in 60 lost treatments.  

But a November 29, 2021 report by economist Dr. Thomas Philipson and Troy Durie from the University of Chicago found that 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. This cut in R&D activity leads to 135 fewer new drugs.  This drop-in new drug 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 price controls found in the BBBA are likely to mean the difference between life or death for millions of patients living now or in the future with a debilitating disease.

The price controls found in this bill will also cripple the generics industry. Without knowing which future drugs will be susceptible to price controls, investors will shy away from the risk, and price controls will distort the marketplace once again.  The excise tax on pharmaceutical companies that don’t comply with the government set prices will start at 65 percent of the company’s previous annual gross sales.  It will rise 10 percent every quarter to 95 percent if the company doesn’t comply.  Since the bill doesn’t define a tax base, a company could be taxed at 1,900 percent tax rate if the government disagrees with their price.

The purpose of these extreme measures is to squash the private sector and pursue government control over healthcare through Medicare for All or a similar program.  Decisions about doctors and medications would be made by bureaucrats, not medical professionals.  To prevent this from occurring, the price control provisions of the BBBA must be defeated.