Time for Democrats to abandon their unhealthy fixation with price controls | Opinion

In the run-up to November's midterm elections, Democrats touted a slew of recent healthcare reforms -- especially the prescription-drug price controls included in the Inflation Reduction Act (IRA) -- as a major win for American patients.

But their pitch to voters has a glaring flaw. Empowering the government to underpay for life-saving care isn't in the interest of patients. In fact, these reforms will inevitably impede access to sophisticated medicines in the years ahead.

What Americans need are policies that make affordable, high-quality care more widely available. The reforms Democrats have enacted do precisely the opposite.

More by Saul Anuzis:Short-term rental legislation would negatively affect seniors | Opinion

More by Saul Anuzis:Medicare and Medicaid deny Alzheimer's medicine coverage, hindering thousands of Tennesseans | Opinion

Drug companies will not feel an incentive to innovate

The IRA allows the federal government to "negotiate" for lower prescription drug prices through Medicare -- a policy that progressives have sought for decades. It's never been clear why.

President Joe Biden gives Sen. Joe Manchin, D-W.V., the pen he used to sign The Inflation Reduction Act.
President Joe Biden gives Sen. Joe Manchin, D-W.V., the pen he used to sign The Inflation Reduction Act.

For starters, these "negotiations" are little more than price controls by a different name. The federal government will demand lower drug prices, and pharmaceutical companies will have no choice but to comply. Firms that refuse to sell their medicines at below-market prices will eventually face a massive 95% excise tax on every penny a particular drug makes.

This arrangement will have a devastating effect on the future of medical innovation. It costs $2.6 billion on average to create just one drug, taking into account the R&D investment lost on the ones that fail along the way.

If a company can't sell its invention at a price it deems fair, it makes no sense to invest in the first place. So patients can expect to see a dramatic reduction in the number of medical breakthroughs in the years to come.

 Hear more Tennessee Voices: Get the weekly opinion newsletter for insightful and thought provoking columns.

Do we want to go in the direction of Europe?

According to economists at the University of Chicago, these price controls will result in upwards of 135 fewer new medicines by 2039 -- at an untold cost in lives.

Worse, medicines that do make it to the market will become far harder to come by, particularly for Medicare patients. Price controls inevitably create shortages wherever they are put in place.

This is exactly what has happened in countries that currently enforce drug price controls, like many in Europe. There were more than 290 new medicines released between 2011 and 2018. Of those, fewer than half were available in France and Ireland, and just 62% were available in Germany.

Here in the United States, where pharmaceutical companies are free to charge an appropriate price for their products, patients had access to 89% of these medicines.

Sign up for Latino Tennessee Voices newsletter:Read compelling stories for and with the Latino community in Tennessee. 

Sign up for Black Tennessee Voices newsletter:Read compelling columns by Black writers from across Tennessee. 

Go after actors that drive up medication prices

Sadly, this isn't the only instance in which Democratic magical thinking holds you can conjure up the same result while paying less. In September, the Biden Administration announced plans to cut how much Medicare pays doctors by 8.42%. This is in addition to a 2% payment cut that took effect this year.

Saul Anuzis
Saul Anuzis

In a recent survey, 92% of medical group practices said that the program's current reimbursement rates aren't enough to cover their costs. In turn, some providers are having to stop business with Medicare entirely or merge with larger health systems. This growing trend of consolidation increases costs and diminishes competition -- meaning worse care and access for patients.There's no benefit in making it more difficult for community providers to care for their patients in a convenient setting.If Democrats' cared what was best for patients, they would abandon their fixation with price controls and focus on policies that truly improve access to care. For instance, lawmakers could go after the insurers and other middlemen companies -- notably pharmacy benefit managers -- that are actually responsible for high out-of-pocket drug costs.Price controls will only restrict the availability of needed medical care. As such, they pose a threat to the health of all Americans. It's time Democrats stop patting themselves on the back for their disastrous health reforms and get to work on policies that actually help patients.

Saul Anuzis is President of 60 Plus, the American Association of Senior Citizens.

This article originally appeared on Nashville Tennessean: Democrats should abandon their unhealthy fixation with price controls