Head for the hills whenever Pelosi talks about socialized medicine:
My guess is that Nutso considers shoving the Affordable Care Act down the public’s throat her greatest achievement. Never mind that the ACA is being dismantled and may soon be declared unconstitutional.
Nothing good ever came out of Diarrhea Mouth’s mouth, but there is always a lot of bad and ugly in everything she stands for:
The Bad: Price Controls
The Pelosi document talks about drug price “negotiation,” but the policy it proposes represents nothing of the sort. For the 250 largest brand-name drugs lacking two or more generic competitors, the secretary of Health and Human Services would “negotiate” prices. However, Pelosi’s bill “establishes an upper limit for the price reached in any negotiation as no more than” 120 percent of the average price in six countries—Australia, Canada, France, Germany, Japan, and the United Kingdom—making “negotiation” the de facto imposition of price controls.
Drug manufacturers who refuse to “negotiate” would “be assessed an excise tax equal to 75 percent of annual gross sales in the prior year,” what Pelosi’s office called a “steep, retroactive penalty creat[ing] a powerful financial incentive for drug manufacturers to negotiate and abide by the final price.” Additionally, the “negotiated” price would apply not just to Medicare, but would extend to other forms of coverage, including private health insurance.
As some have noted, Pelosi’s plan attempts to mimic President Trump’s drug pricing proposal, by using an international pricing index to bring down prices in the United States. The Trump administration’s efforts have highlighted how developed countries overseas free-ride on American innovation. By imposing price controls on their pharmaceuticals, other countries allow American consumers to pay a greater share of the research-and-development costs needed to create new pharmaceuticals.
But the solution to that dilemma lies in trade policy, or other solutions short of exporting other countries’ price controls to the United States, as outlined in both the Pelosi and Trump approaches. Price controls, whether through the “negotiation” provisions in the Pelosi bill, or related provisions that would require rebates for drugs that have increased at above-inflation rates since 2016, have brought unintended consequences whenever policy-makers attempted to implement them. In this case, price controls would likely lead to a significant slowdown in the development and introduction of new medical therapies.
The Ugly: New Government Spending
While the price controls in the drug pricing plan have attracted the most attention, Democrats have mooted some version of them for years. Price controls in a Democratic drug pricing bill seem unsurprising—but consider what else Democrats want to include:
With enough savings, H.R. 3 could also fund transformational improvements to Medicare that will cover more and cost less—potentially including Medicare coverage for vision, hearing, and dental, and many other vital health system needs.
In other words, Pelosi wants to take any potential savings from imposing drug price controls and use those funds to expand taxpayer-funded health care subsidies. In so doing, she would increase the fiscal obligations to a Medicare program that is already functionally insolvent, and relying solely on accounting gimmicks included in Obamacare to prevent shortfalls in current seniors’ benefits.
Price controls have their own drawbacks, as outlined above. But using any supposed savings from these price controls to expand an already unsustainable system adds injury to insult on future generations of Americans, providing good reason for conservatives to reject much of the Pelosi drug pricing agenda.