Roads, Bridges, and Drug Pricing—A Dangerous Trojan Horse

There’s quite a bit happening in Washington, D.C., and that is bad news for taxpayers and consumers. Speaker of the House Nancy Pelosi (D-Calif.) has now claimed that lawmakers are considering piling their massive Medicare overhaul on top of the Biden administration’s $3 trillion infrastructure proposal.  Putting aside the price tag of the infrastructure bill, healthcare policy is not related to repairing roads and bridges or investing in emerging transportation technologies.

For three years, progressives in Congress have been unable to enact their radical healthcare agenda—and for good reason. H.R. 3, the bill negotiators want to include in the most recent infrastructure package, would use taxpayer dollars to choke off private companies and stymie innovation. In addition, it would give government “negotiators” the power to hold pharmaceutical manufacturers hostage, threatening to withhold payment if they don’t meet certain price points. The basic laws of supply and demand dictate that this only ends one way: fewer medicines available to patients and fewer new cures coming to market. 

During the COVID-19 pandemic, America has written the script on harnessing private sector innovation to reach millions of individuals in record time. From vaccines and treatments to protective equipment and new delivery technologies, American companies were prepared to meet the moment with immediate solutions. Because of this, the country was finally able to begin the economic recovery in earnest by opening businesses, getting people back to work and returning to some form of life as we knew it.

But when it comes to drug pricing, there is more to good policy than meets the eye. The legislation under consideration follows an “international reference pricing” model, using foreign countries’ benchmarks to cap American prices. Tying cheaper socialist systems to the free market will have irreversible ripple effects that cripple private innovators and ensure patients can no longer access the drugs they need. H.R. 3 lowers federal spending only because Medicare would refuse to pay for certain medications, not because of new efficiencies or reduced red tape and lower prices.

This legislation would use tax dollars to fund the same government interventionism that has led to months-long waits for patients to access new medications in other countries and caused their local innovators to flee to more welcoming shores. Taxpayers would also pay more in the long run thanks to reduced health outcomes. Meanwhile, vulnerable seniors who can’t afford additional coverage would be stuck with fewer options for treatments they need.  

Simply put, everyone loses.

Price controls are always the wrong policy prescription, but they are especially dangerous with drug pricing—the costs far outweigh the benefits at every level. House Democrats made healthcare their primary agenda item in the 2020 election cycle, and voters rejected these proposals at the polls. This is why Congress’ attempt to couple H.R. 3 with an unrelated, pie-in-the-sky infrastructure package so they can pass it through a expedited reconciliation threshold is dishonest and will lead to devastating consequences.

If policymakers want to address rising healthcare costs, they must instead look to what has worked during the pandemic: cutting red tape at the Food and Drug Administration, supporting private innovators, and promoting price transparency from hospitals and other providers.