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Monday, February 10, 2020

ANALYSIS/OPINION:

Life expectancy has creeped up to near 80 years old in the United States. For women, it’s already almost 82. Those 85 and over are the fastest-growing sector of the population — jumping from about 100,000 in 1900 to 5.5 million in 2010. 

Moreover, the longer you have lived, the longer you can expect to live. A healthy 21-year-old can expect to live to 80. A healthy 60-year-old can expect to see 84. An 84-year-old can expect to make it to 92. 


Some of this is because of better food, safer housing and fewer wars. But a lot of it has to do with science. Research has helped us learn more about personal wellness, emotional and physical self-care and how to maximize the benefits of exercise. It also has brought us to thousands of drugs that have addressed our maladies and set us on the course to healthier lives. 

Because the research is done in the United States by U.S. firms, Americans get first crack at many of these treatments — and the only crack for years in some cases. We sometimes pay a little more because we’re funding the research, but what we receive — access to the newest, most effective drugs long before people elsewhere in the world — balances it out. 

This grand bargain is under threat, though. Under a rule proposed by the Department of Health and Human Services, prices for drugs administered in doctors’ offices and hospitals under Medicare Part B would be benchmarked to prices set by governments in 14 countries, including Austria, Ireland, Greece, the Czech Republic and others.

This International Pricing Index would import price controls from other countries — some of which have significant, even overwhelming, influence by government on the price structure. It would force drug companies to sell to Medicare Part B at prices designed to match those kept low in other countries by government subsidies. 

This would force a race to the bottom to find the cheapest — which usually means oldest — drugs in the market and use them over newer, more effective treatments. And the effects could be dramatic.

One study found that if the United States had employed drug pricing schemes similar to those in Australia, Canada, France, South Korea and the United Kingdom — three of whom would be part of the proposed International Pricing Index — the gain in life years from innovative cancer treatments would be cut in half. 

The Trump administration seemed to understand this in 2018, when the Department of Health and Human Services wrote in a report that “Such price controls, combined with the threat of market lockout or intellectual property infringement, prevent drug companies from charging market rates for their products while delaying the availability of new cures to patients living in countries implementing these policies.”

But with elections approaching and members of Congress wanting to be able to tell voters they did something about high drug prices, the pressure has intensified to put some kind of pricing program in place. 

The House of Representatives passed a sweeping measure in the fall that would change the structure of the Medicare Part D prescription benefit for seniors, control drug price increases within Medicare that outpace inflation and give the federal government the power to negotiate prescription drug prices directly for both Medicare and the private market. 

But Part D is the rare government program whose costs haven’t spiraled out of control. Taxpayers spent less on it in 2018 than they did in 2015, and much of the reason is because the government is not allowed to negotiate drug prices. As a result of this and other provisions, the measure has only Democratic support and could not become law.

The Senate Finance Committee has approved a package put forth by Chairman Chuck Grassley, Iowa Republican, and Ranking Member Ron Wyden, Oregon Democrat, but Senate Majority Leader Mitch McConnell has said he does not support that legislation either. This normally would mean the end of the legislation for this Congress, but it’s an election year and pressure could mount as lawmakers look to show they did something to help lower drug prices.

Congress should focus on what it does agree on and what will help the country. The International Pricing Index qualifies on neither front.

• Brian McNicoll, a freelance writer based in Alexandria, Virginia, is a former senior writer for The Heritage Foundation and former director of communications for the House Committee on Oversight and Government Reform.


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