By Gary Puckrein
Gary A. Puckrein is president and chief executive officer of
the National Minority Quality Forum.
Congressional Democrats are still trying to come to an agreement on their social spending bill.
On the health care front, lawmakers have been working for months to craft legislation that strengthens Medicaid, includes new hearing benefits in Medicare, and invests in services for seniors and persons with disabilities.
But a sticking point has been drug pricing. And moderates and progressives recently came to a deal that could actually undermine all the progress that they’ve made elsewhere.
With the marketing pitch of “negotiations,” Democratic lawmakers have put forward a plan to dramatically change Medicare’s drug benefit. By lifting the program’s “non-interference clause,” the plan would authorize the Secretary of Health and Human Services to set prices on certain medicines. It would also subject manufacturers to a tax penalty if a drug’s price rises faster than the rate of inflation.
This scenario would be a nightmare for patients and prove immensely harmful to our health ecosystem. Nearly immediately, Medicare beneficiaries would likely face reduced access to advanced medications. Investment in research and development would also dry up, limiting the development of new treatments and cures.
For proof, just look at the Veterans Affairs drug program.
To keep costs down, the VA utilizes a formulary that rations access to medicines. Indeed, only 52% of the 200 most popular medicines for Medicare beneficiaries are covered by the VA drug benefit. This statistic is a big reason why 8 in 10 veterans have supplemental insurance coverage. It doesn’t make any sense for Medicare to inch closer to this program and its shortfalls.
Price controls would also devastate the development of future medicines.
The war on cancer, for example, is reaching a critical phase, if not its endgame. Now is the time to increase investments in metabolic diseases like diabetes and obesity. And what about sickle cell anemia – where a cure is already in the offering?
Price controls will surely steer investors away from the life sciences sector.
Surely, there are better ways to cut costs than government price controls. Let’s consider one example: our clinical trial system, which is inefficient and costly.
Every novel prescription drug must receive approval by the U.S. Food and Drug Administration before it can be prescribed to patients. The FDA requires efficiency and safety tests as a condition of approval. These tests are usually undertaken through a clinical trial, which cost millions and often don’t reach FDA approval.
The process is deeply onerous. First, a network of clinical trial sites needs to be built. This can range from tens to several hundreds of sites. Next, patients are enrolled. The cost of recruiting patients, oftentimes thousands of them, is very expensive, made more so by the lack of permanent national infrastructure to support clinical trials.
Government can overhaul this antiquated system by promoting diverse recruitment of patients and protecting the intellectual property rights of innovative companies. This remodeling would make trials cheaper and more efficient, thereby reducing the cost of prescription drugs.
Reimagining our clinical trial enterprise system is not a panacea for the cost of medications. But, it would be a great first step. It would improve our health system and cut costs without the destructive side-effects of government price controls. And even more important, it would reduce costs without putting the most vulnerable communities in harm’s way.