Price Controls for Dummies | Citizens Against Government Waste
The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Price Controls for Dummies

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


House Speaker Nancy Pelosi’s (D-Calif.) drug price control bill, H.R. 3, the “Lower Drug Costs Now Act” is unfortunately moving forward.  Citizens Against Government Waste has written about its negative impact and the socialist policies it adopts in a September 19, 2019 WasteWatcher, “Lenin, Stalin, and Capone Would be Proud of Pelosi’s Drug Pricing Plan.

On October 17, the House Energy and Commerce and the Education and Labor Committees marked up H.R. 3, and on Tuesday, October 22, the House Ways and Means Committee also marked up the legislation.  The bill is now ready to move to the House floor for a vote.

Watching the markups made it clear that Democrats are a bit confused about the definition of certain terms associated with H.R. 3.  To help them better understand what is at stake, the following words are defined and properly used in a sentence:

Extort:  To obtain from a person or company by force, coercion, or unlawful power.

H.R. 3 will allow the secretary of Health and Human Services to extort from a pharmaceutical company a 95 percent excise tax if the company does not agree to the price the government decides they should charge for their drug.

Negotiate:  To discuss with another entity to arrive at a settlement on a matter.

Since 2006, Medicare Part D has used pharmacy benefit managers to negotiate drug prices with pharmaceutical manufacturers and pharmacists to provide very satisfied beneficiaries a choice of drug plans to choose from and saved taxpayers billions of dollars, which means no one else (the government) should be involved now or in the future in any price negotiations.

Price ControlGovernment-mandated prices on a set of products, which are effective for only a short period of time and eventually lead to shortages and rationing.

Countries that use price controls discourage investment in their biopharmaceutical industry, which is why in 2016 the U.S. led in total pharmaceutical R&D expenditures with 58 percent, Japan came in next at 13 percent, the U.K. was at 7 percent, and Canada was at 1 percent.

Rationing:  An allowance of something to be used; to use sparingly.

While 96 percent of new oncology drugs launched between 2011 to 2018 were available to Americans, countries that have government-controlled healthcare systems used rationing to limit their access, so only 59 percent were available to Canadians, 66 percent were available to the French, 51 percent were available to the Irish, and 71 percent were available to the British.

Socialism:  A theory that calls for the collective, usually the government, ownership of means of production and distribution of goods.

Countries like Cuba and Venezuela have adopted socialism as their form of government, which is sufficient to clearly demonstrate why the U.S. should never follow that dangerous path.

Un-American: Not in accordance with American characteristics.

The explanation of this definition at Lexico.com, a collaboration between Dictionary.com and the Oxford University Press, is, “such un-American concepts as subsidized medicine and free education.”

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