Biden’s new healthcare scheme is socialized medicine in sheep’s clothing
Story by Mary Vought
The Biden administration recently announced the next step toward socialized medicine, releasing its list of 10 prescription drugs subject to “negotiation” with the Medicare program. As one might expect from this administration, its latest gambit, while being couched in market-oriented language, will only further entrench the government in its control of the healthcare system.
Under the rubric laid out by Democrats’ mistitled Inflation “Reduction” Act last year, this “negotiation” will result in a predetermined outcome. The law specifies that drug companies will receive a “maximum fair price” that is at least 25%-60% below current market rates. Thus, the “negotiations” required by the law are little more than a charade designed to give the appearance of a give-and-take process, when in reality, the law prescribes price controls equivalent to those in socialist countries.
And if companies do not agree to “negotiate”? The federal government will make them an offer they can’t refuse.
Specifically, manufacturers face taxes of up to 1,950% if they fail to go along with the Potemkin “negotiations.” Such penalties could even put some companies out of business — that is, if they ever went into effect. Congressional scorekeepers concluded this tax would raise exactly zero revenue because no companies would, or could, refuse to participate in the process.
Where will all the savings from these “negotiations” go? Good question. It turns out that Democrats used hundreds of billions of dollars in Medicare savings from the Inflation Reduction Act’s prescription drug provisions to fund other elements of the law, including climate provisions and new funding for the IRS. In other words, while these savings will help subsidize wealthy suburbanites’ Teslas or trigger your audit, they won’t do a single thing to help Medicare, which faces insolvency in a few short years.
Just as these changes won’t help Medicare’s solvency, they won’t improve the prescription drug marketplace either. It doesn’t take government price controls to bring down the cost of prescription drugs; true competition does, as recent events have illustrated. Just a few weeks ago, the Justice Department announced two new settlements in a long-running investigation into drug price-fixing. As documents released publicly several years ago demonstrated, a group of generic drug manufacturers violated antitrust laws, colluding together to keep prices high.
As the mother of a daughter with cystic fibrosis, it angered me to read in the DOJ documents that Teva Pharmaceuticals rigged the price of tobramycin, a CF drug. But by the same token, this settlement points at one potential solution. Better enforcement of antitrust laws, and working to create a competitive environment by promoting generic entry into the marketplace, can bring down prices in a more durable way than any arbitrary government benchmark.
I recognize the high prices that CF patients, and others, pay for their prescription drugs. But I also recognize that the next drug developed could be the one that treats, or even cures, my daughter’s disabling condition. That’s why I hope Washington moves away from the sledgehammer approach announced by the Biden administration and instead promotes solutions that can prove more long-lasting and beneficial for patients.