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Drug Price Controls Are a Bad Idea With a Lot of Support

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
AP Photo/Andrew Harnik

The idea of price controls is an easy sell to people who don’t know any better. But history has repeatedly shown they not only don’t work, they’re a disaster. That they are a disaster might be why the idea is gaining so much traction among Democrats both running for president and currently running Congress – namely Nancy Pelosi – progressives have always left a trail of disaster in their wake. But in one industry in particular, a disaster will be exceptionally hard to recover from: health care.

The story in health care that is getting all the attention is “Medicare for All,” which is socialized medicine by a different, higher polling name. For a complete government takeover of the entire system to happen, the entire private sector system that currently is in place would have to go away. No company is going to continue to employ people for an industry that no longer exists.

But what if the new system fails? With the old system, the one that served so many so well for so long, gone, where can we go to escape the inevitable wait times and rationing that always follow socialized medicine? Nowhere.

And what company would reinvest the billions of dollars needed to reconstitute some semblance of what we currently have knowing that should another left-wing politician decide there are votes to be gained from ruining it again? No company.

Once our private system, as it currently exists is gone, it’s gone.

But it’s not just the insurance aspect of health care that finds itself in the scope of the left, one just as important is in their crosshairs too.

The prescription drug industry is easy to demonize because it’s faceless and has a lot of money. When politicians are willing to cherry pick rare data and pretend it’s common, you can manipulate people to turn against the idea of almost anything. And right now Democrats, led by Pelosi, are doing just that to pharmaceuticals.

Pharmaceuticals are incredibly important. Prescription drugs not only save lives, they improve the quality of lives of the people who need them. But they aren’t free.

It costs more than a billion dollars to bring a new drug to market, and takes about a decade. That’s not counting the time and money spent on drugs that fail in trials after years of investment. The money for that research and development has to come from somewhere, and the window those companies have to make a profit before generic competitors can legally manufacture the same product without the overhead is very narrow.

Now Democrats want to introduce price controls on prescription drugs in an attempt to garner some populist support for 2020. This would be a disaster.

If the US goes the way of the rest of the world, expect the results of the rest of the world, only worse.

Countries where government controls the health care wait months, sometimes years, for new drugs to be introduced into the market. That’s because their governments demand artificially low prices or threaten to steal the patent for the drug and manufacture it themselves. Pharmaceutical companies are given a choice between getting some money or no money, so they opt for some.

This dance also delays the government’s requirement to pay for the drug, saving them money in the short-term. Patients suffer, but they aren’t the focus of any of this. It’s about money.

As Democrats in our government position themselves for an attempted complete takeover, they have to shave costs anywhere they can, and prescription drugs are an easy place to start. But there’s a very basic problem.

As with any industry, if you remove the possibility of profit, you kill advancement. If government sets the price of drugs, the only new drugs that will be developed will be for treating afflictions a lot of people suffer from. If a disease impacts 50,000 people, there will be no research into a treatment for it because the cost will never be able to be recouped. So if Democrats have their way, you’d better hope you or the people you care about come down with something for which there is already a treatment, or a lot of people get it. Otherwise, you’re out of luck.

That’s the problem with government involvement in general and price controls in particular – they bastardize the market and kill innovation. And ultimately, they kill people.

You’ll never know what could have been if you prevent the idea from being explored in the first place. That’s what price controls on drugs will cause.

It might poll well, it might motivate some people to vote, but government setting the prices of prescription drugs would be every bit the disaster socialized medicine would be. Democrats don’t care, Republicans are either on board or afraid to say anything, and we the people will end up losing. But just think of the savings!

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