Senators Need to Check Their Conscience Before Voting for Price Controls | Citizens Against Government Waste

Senators Need to Check Their Conscience Before Voting for Price Controls

The WasteWatcher

Price controls will still be price controls and have a devastating impact on future drug development whether they are included in the Build Back Better Act (BBBA) or the  new Inflation Reduction Act of 2022 (noting that neither bill will achieve the intent of its title). 

Any senator who votes for the inflation reduction bill will have on their conscience the consequences of their actions.  Price controls, tax increases, barriers to business, and higher energy costs will all result from this legislation.  It will also prolong and exacerbate both inflation and the recession that the White House believes does not exist despite two consecutive quarters of negative GDP growth, something that President Biden and Treasury Secretary Janet Yellen both said was the definition of a recession until it happened under their watch.

While the loss of even a single new drug as a result of price controls is one drug too many, the Congressional Budget Office (CBO) estimate of the impact of the BBBA on research and development was that five new drugs would be lost through 2039.  But that appears to be a significant underestimate based on a November 29, 2021, issue brief published 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.” 

These findings are especially problematic for rare disease patients, since 93-95 percent of the 30 million Americans living with one of more than 7,000 rare diseases are still waiting for an FDA-approved treatment to be developed. Patients and taxpayers only need one Democratic or Independent senator to take a good look in the mirror and think about the life and death consequences of price controls on every American before they decide whether to vote in favor of the Inflation Reduction Act.

 

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