State politicians are considering dangerous prescription price controls that could limit patient access to medicines, interfere with market competition, and stifle innovation.
While conversations about health care affordability are critical, legislators should recognize that addressing the problem through price controls could have long-term and harmful effects on patients.
Lawmakers should reject bills that allow state governments to cap and arbitrarily set the prices of medications, because instituting such price controls will:
- Undercut innovation and stall the development of groundbreaking medicines. The proposals place power in the hands of a government-run board of bureaucrats to set arbitrary price controls on prescription medications. Such price controls could undermine the competitive market that is critical in lowering costs and delivering new treatments to patients.1
- Limit access to crucial medicines. Capping prices or profits within the drug-supply chain could restrict patients’ access to medicines and result in fewer new treatments. Studies have shown that in countries with price controls, patients often have delayed access to new drugs that treat challenging diseases like cancer.2
- Do nothing to address middlemen. Price controls do nothing to address middlemen – insurers, pharmacy benefit managers, and others – who retain prescription drug rebates instead of passing those savings to patients. 3
Instead of misguided price controls, policymakers must focus on reforms that protect medical innovation and create meaningful savings for patients, such as capping their out-of-pocket costs and ensuring that patients receive the rebate savings they deserve.
1Manhattan Institute. “Drug Price Controls Hurt Patients Most.” October, 2015.https://www.manhattan-institute.org/html/issues-2016-drug-price-controls-hurt-patients-most-7949.html
2PhRMA analysis of IQVIA Analytics Link and FDA, EMA and PMDA data. January 2019. Note: New Active Substances (NASs) approved by the FDA, EMA and/or PMDA and first launched in any country between January 2011 and September 2018. Average delay represents the time in months since global first launch among NASs that have launched in a given country.
3BRG: Revisiting the Pharmaceutical Supply Chain 2013-2018. January 2020.