Gil Gutknecht: Losing Access? Get a Grip.

Unless we conservatives get serious about controlling drug and healthcare costs, we will wind up with the worst of all worlds. Market forces cannot work where participants are granted monopoly powers. Fortunately, we have a President who instinctively gets this.

via AP

It will cripple American medical innovation? Seniors would lose access to modern, lifesaving drugs? Those are a couple of the dire warnings being advanced by the drug industry and a few of their friends. Spots are running on conservative talk radio. We can guess who is actually paying for those ads. 

The cause of all this angst is a fairly modest proposal by the Trump Administration to collect reference (comparative) pricing for Rx drugs from other industrialized countries. All sides agree that this will put U.S. drug pricing under a much hotter spotlight and give the President a stronger bargaining hand. Donald Trump prefers negotiating from strength. Remember, he wasn’t elected on an America Last agenda. 

One side of the debate clearly does not want this to happen. They are spending serious money to try to quash it. 

They know the truth. And the truth will alter the Pharmaceuticals’ business models. It will be a bitter pill for them. The unvarnished truth is that we Americans are forced to pay more for prescription drugs than anyone else in the free world. Not just a little more. A lot more. This proposal will begin to level the playing field. The inflation rate for drugs has been greater than any other product or service for more than a decade. It is a critical driver of our runaway healthcare costs. 

The drug industry knows that this will lay the groundwork for much more aggressive price negotiations for Medicare and other healthcare plans. It may even start to crack open markets, allowing Americans to legally import drugs from other countries like Canada. We can freely import almost anything else. We just renegotiated NAFTA, getting a better deal. Except of course for prescription drugs. The one category of free trade that could save us Billions. 

So now the folks at PhARMA are engaged in a new disinformation campaign. They are trying to make us believe that if our government does a little price shopping in say Germany, the next cure for cancer or incontinence will never happen. We won’t have “access” to the next lifesaving therapy. I really don’t like that word, access. It’s theirs, not mine. 

Get a grip. 

That’s like saying if our government does a little homework and finds that “socialist” Germany is buying their fighter aircraft for 300 percent less than we are, we won’t have access to the next generation of fighter jets. Does anyone believe that? Maybe Germans are just better negotiators than we are. Or maybe we just have stupid tattooed to our foreheads. 

No more.

Boeing and Lockheed plow a lot of money into research to produce the next generation of aircraft with no guarantee that anyone will buy them. Some may say, oh but the government helps to underwrite some of those costs. True. That same government, through the CDC, NIH and various other agencies underwrites much of the research costs for developing the next generation drug as well. 

Researchers at Bentley University conducted a lengthy study to determine just how much the pharmaceutical companies benefit from taxpayer subsidized research. They poured through millions of pages of research documents. Their findings were publishedin the Proceedings of the National Academy of Science. They found that of the 210 new drugs approved by the FDA between 2010 and 2016, all 210 of them benefited from molecular research funded by the U.S. taxpayer. 

Thanks to legislation known as Bayh-Dole, we taxpayers get NO royalties for our investment. And thanks to our foolish, we won’t negotiate policy, we get to pay the highest prices in the world for those same drugs. 

Unless we conservatives get serious about controlling drug and healthcare costs, we will wind up with the worst of all worlds. Market forces cannot work where participants are granted monopoly powers. Fortunately, we have a President who instinctively gets this. Like Teddy Roosevelt, he understands that when monopolies abuse their power, it is up to government to intervene and level the playing field. 

Doing a little homework, confirming what others are paying for Rx drugs is a smart first step. 

Gil Gutknecht served six terms in the U.S. House from Minnesota. This piece contains excerpts from his forthcoming book, PhARMing the USA, How the drug companies milk America.  Share this on Facebook  Tweet