In the coming days, the House of Representatives will vote on a new bill to "stabilize" Obamacare.
Don't be fooled.
The proposal will boost subsidies for those purchasing health coverage through one of the Affordable Care Act's state-based insurance exchanges. It also expands eligibility for those subsidies to families earning more than $100,000 annually.
While ensuring Americans who have lost their jobs don't also lose their health coverage is a laudable goal, this effort is nothing more than an opportunistic gambit to dramatically expand Obamacare — and is funded by new taxes and price controls on prescription drugs.
The proposal is a troubling preview of the single-payer system Democrats will surely begin pushing in the weeks and months ahead. And we can already conclusively demonstrate how terribly patients will fare — and how much innovation will suffer — if the effort succeeds.
To pay for the expansion of Obamacare, House Democrats have copy-and-pasted language from the drug pricing bill they failed to convince the Senate to take up last year, H.R. 3.
Under the proposal, the federal government would begin setting the prices on most popular, brand name medicines — with a cap of 120% of the average price paid in six "reference" countries: Australia, Canada, France, Germany, Japan, and the United Kingdom.
These countries all operate socialized medicine programs that allow the government to manipulate prices and subsidize costs with taxpayers' money. As a result, drug prices have little relationship to actual cost or value of the medicines. So if this bill becomes law, we'd adopt those same, market-crushing pricing schemes — and import the same, devastating consequences.
Consider access to new medicines. Of 220 new drugs launched in 36 countries from 2011 to 2017, 90% were available in the United States. Just two-thirds were available to patients in the UK, only half were offered in Canada and France, and a paltry one-third were available in Australia.
Even when drugs are made available for sale in these countries, shortages are common. In France, a quarter of patients have been unable to get their prescriptions because of drug shortages. Last year, Canada’s government reported 4,400 drug shortages, including critical drugs for treating cancer, seizures and diabetes.
Or, consider innovation. The portion of new medicines originating from the UK, France and Germany has been slashed in half over the past 40 years. European drug makers regularly flee regulations and price controls for greener pastures in the United States.
The American biopharmaceutical industry spent over $500 billion on scientific research and development last decade alone.
That investment leads to innovation.
The United States produces two in three new medicines.
And we've seen this innovation prowess recently, in service to the most pressing need of our time. American companies from small biotechs like Moderna to larger ones like Johnson & Johnson have led the way on discovering and developing a coronavirus vaccine.
To make the Democrats' plan even worse, if a biopharmaceutical company refuses to engage with government "negotiators," that company would be hit with a 95% excise tax on the drug's sales.
This tax demonstrates how preposterous the plan is — but also how serious the Democrats are about their crusade for single-payer health care. The goal is to allow the federal government — with all its flaws and all its incompetence — to run the entire healthcare system.
What else could explain the rush to expand Obamacare now while simultaneously trying to destroy the very drug makers who will ultimately save the world from COVID-19?
Since the pandemic began, Congress has passed trillions in coronavirus stimulus without even considering the impact on our debt. Yet now, in a nod to fiscal responsibility, the Democrats need to raid the coffers of the only industry that can get our nation out of this pandemic.
House Republicans mustn't aid and abet this ridiculous proposal.
Drew Johnson is a senior fellow at the National Center for Public Policy Research. Read Drew Johnson's Reports — More Here.
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