Ron Klink on Nancy Pelosi’s Drug Costs Now Act Misses the Point

House Speaker Nancy Pelosi just proposed one of the most ambitious healthcare reforms since the Affordable Care Act. She hopes her plan, The Lower Drug Costs Now Act, will reduce the “out of control” prices that are “crushing Americans at the pharmacy counter.”

I served four terms in Congress with Speaker Pelosi, and I know she cares deeply about patients. Despite her good intentions, this bill would do little to reduce patients’ pharmacy bills. But it would deprive Americans of lifesaving treatments.

Consider the bill’s main provisions, which would reduce government — not patient — spending. One measure would impose steep fines on drug companies that raise prices faster than inflation. The revenue collected would go straight to the Treasury Department. And the government wouldn’t be required to funnel those savings back to beneficiaries.

Another measure would allow the government to cap the price of 250 brand-name medications. The caps would reduce government spending. But they wouldn’t necessarily reduce patient cost-sharing.

Such measures would crush America’s biopharmaceutical industry. The bill would reduce drug companies’ revenues by $1 trillion in 10 years.

That would hurt patients. Pharmaceutical companies devote 17 percent of revenues to research and development. So a $1 trillion drop in revenues means research spending would fall by roughly $170 billion.

Without this funding, scientists would develop far fewer medicines. Cutting drug prices by 40 to 50 percent would result in up to 60 percent fewer research and development projects. Government pricing setting would slow drug development so much, average life expectancies could decline.

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SOURCE: Christian Post, Ron Klink