Democrats’ Latest Drug Cost Reduction Plan Will Result In A Healthcare Nightmare

Story by David Williams 

In the ongoing debate surrounding drug costs and accessibility, Independent Vermont Sen. Bernie Sanders continues to advocate to put more roadblocks in front of patients. Earlier this year, Sanders vowed to oppose the Biden administration’s nominee to lead the National Institutes of Health (NIH) – Dr. Monica Bertagnolli – until the administration accepted a more aggressive drug pricing plan. While her nomination hearing recently moved forward, Sen. Sanders continues to leverage his power as Chair of the Senate Health, Education, Labor and Pensions Committee to pull the Biden administration further in line with his agenda, one that rests on price controls and more government power.

Unfortunately for American patients and taxpayers, this regressive plan for the healthcare system would keep America from doing what it does best — innovating. For example, Sanders and Democratic Massachusetts Sen. Elizabeth Warren are calling for a government “march-in” to manipulate prices on drugs that utilize federally funded research. However, this plan would only disincentivize future investment in new medicines.

The “march-in” being described by Sanders and Warren refer to a provision of the 1980 Bayh-Dole Act. The Bayh-Dole Act set up a framework to promote public-private partnerships in medical research and jumpstart innovation so that taxpayer-funded discoveries do not go to waste. The march-in provision allows the government — in extraordinary circumstances — to take control of a company’s patent and license the product themselves. This is if it is determined the drug is not being made available on what the government deems “reasonable terms.”

The technology transfers facilitated by this law are responsible for more than 200 new drugs and vaccines since 1980, as well as the creation of over 15,000 startups and millions of resulting jobs. The Bayh-Dole framework delivers a clear return-on-investment for American taxpayers and society at levels not seen before the law’s implementation.

The Bayh-Dole Act was never intended to be used in the way Sanders and Warren suggest. The law actually decreased government control of licensing for these pharmaceuticals. Construing the march-in provision to be an endorsement of or exhortation to increase the size and scope of government in this area would be a monumental misunderstanding.

Abusing the march-in provisions of the law would undermine the patent protections that encourage private sector investment into strengthening the advances made through federally funded research. Elected officials and policymakers should uphold the integrity of Bayh-Dole instead of deliberately misusing it to enforce price controls for which partisans have shamelessly been lobbying for years. Disrupting this system without considering the long-term consequences would threaten countless future lifesaving treatments and hinder needed medical breakthroughs.

Likewise, a return of “reasonable” price agreements as a form of price controls in government contracts would discourage collaboration and investment in this space. What constitutes “reasonable” pricing is entirely subjective and opens the door to near unlimited government involvement and zero certainty. Such concerns were echoed by Republican Louisiana Sen. Bill Cassidy at Bertagnolli’s confirmation hearing.

For example, the NIH introduced a reasonable pricing clause in 1989. As a result, the number of Cooperative Research and Development Agreements issued for federal labs and companies to advance and commercialize medical research fell drastically. The NIH wisely got rid of the clause in 1995. Calls to bring this idea back today demonstrate a flawed understanding of both history and the complexities that go into taking a medical discovery from the lab to the hands of patients and families across the nation.

Rather than pursuing price controls and government intervention, Congress must remain focused on more concrete solutions. Such efforts are already underway in looking into the role pharmacy benefit managers (PBMs) play in driving up prices. At the state level, Hawaii most recently put the spotlight on these actors and filed a lawsuit pushing back against PBM’s pay-to-play practices, explaining the artificially increased costs for consumers and taxpayers.

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Following Sanders’ lead on drug prices would irreparably harm medical innovation and access to lifesaving cures for millions of patients nationwide. The Inflation Reduction Act’s price controls are already frightening enough. Doubling down with failed “reasonable” price agreements and misuse of the Bayh-Dole Act will only add to the nightmare for Americans. It’s time for Congress to get serious, ignore the distractions and implement policies that benefit patients rather than their own political agenda.

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