Biden’s price-control scheme will harm patients and compromise the free market

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On Tuesday, the Biden administration named the first 10 prescription drugs that will be subject to new government price controls. The novel power is derived from the Inflation Reduction Act, which permits the federal government to price-fix certain medications accessed through Medicare.

more than $2 billion and takes roughly 10 to 15 years. And that’s for successful products. Less than 12% of drugs that make it to clinical trials get across the finish line. So, investments associated with failed products also have to be baked into company budgets.

The government can and should demand high standards around the drug approval process. The hoops help ease people’s minds by confirming that treatments administered at hospitals or drugs purchased at the pharmacy counter are safe and effective. When combined with the dynamic community of scientists, researchers, doctors, and drugmakers, this assurance is why Americans enjoy the most cutting-edge healthcare in the world.

But government regulators can’t have their cake and eat it, too. To preserve the pipeline of new innovative treatments, therapies, and vaccines, drug companies must have the opportunity to recoup investment rather than be forced to sell products at below-market rates. Unlike Uncle Sam, businesses don’t have the option to spend beyond their means continuously and take on trillions of dollars in debt.

The Biden administration doesn’t seem to grasp this concept. The White House’s price control scheme, approved by his allies in Congress, is moving forward at full steam. As a result, the free market incentive to create new medicine will fade, compromising the health of future people.

 

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