Tags: nancy pelosi | lower drug costs now act | policy | healthcare

Pelosi's 'Lower Drug Costs Now Act' Would Leave Us With No Drugs

Pelosi's 'Lower Drug Costs Now Act' Would Leave Us With No Drugs
Speaker of the House Nancy Pelosi speaks at a press conference at the U.S. Capitol on November 12, 2019, in Washington, D.C. (Drew Angerer/Getty Images)

Wednesday, 13 November 2019 12:56 PM Current | Bio | Archive

There’s a phenomenon in filmmaking called “Hollywood bookkeeping,” whereby very crafty accountants find creative ways to reduce the reported profit of a movie. This slashes the amount they have to pay in royalties or to anyone who foolishly negotiated a deal on net proceeds rather than gross proceeds. Perhaps the most galling example was the financial footwork on “Return of the Jedi,” which — despite having made nearly half a billion in ticket sales — has somehow “never made a profit.”

Nancy Pelosi has taken a page from Hollywood’s balance sheet, but in reverse. And in her dangerous game of creative accounting, she’s playing with people’s lives rather than just hoarding a few extra million.

In the effort to seize absolute control of our health care system, House Democrats have introduce HR 3, the innocently titled Lower Drug Costs Now Act, which would slap a preposterous tax on prescription medicine. If a drug manufacturer refuses to enter negotiations with the Health and Human Services secretary on “a maximum fair price,” HHS would slap an excise tax equal to 75 percent of annual gross sales in the prior year of the selected drug.

So very much like with Hollywood bookkeeping, the excise tax is on gross receipts, not net profits. If a company sells a drug for $100, they would owe $75 in tax — regardless of what profit was made. This means that the Pelosi prescription medicine tax can easily exceed 100 percent of profits.

And rather than a tax on drugs that are very esoteric or unnecessary for sustaining life, this would be on the 250 most common drugs Americans rely on. This steep penalty coerces drug manufacturers to negotiate and abide by the final price, while ensuring that patients maintain uninterrupted access to the medicines they need. Of course, if something as preposterous as this ever became a law, it would put drug manufacturers completely out of business — which would obviously interrupt patients’ access to the medicines they need.

The only way a drug manufacturer could avoid this confiscatory tax is to submit to a government arbitration that dictated prices. This price control would be pegged to inflation every year, further increasing scarcity of the drug supply. These controls would be based upon prices in countries with huge drug shortages and so-called death panels (yes, these are real, not just a 10-year-old Sarah Palin talking point). Drug shortages are massive problems for patients in the socialized-medicine paradises of the UK, Canada, Japan, Australia, and France.

When the government taxes something, consumers get less of it. By taxing the 250 most common prescription medicines at rates so grievous they make doing business impossible, Pelosi’s prescription-medicine tax will result in higher drug prices, rationing, and the intrusion of IRS-style clarity into your local drug store.

Not only will patients get less of the drugs they need today, they will get zero of the drugs of the future. If a company can’t recover its exorbitant R&D costs, it will not invest money in new formulations. New flavors of Doritos are less expensive than new drugs to fight Alzheimer’s, and Democrats haven’t threatened price controls on them. (At least not yet.)

Of course new drugs are expensive. But the alternative to medicine being expensive is not having any at all. Those prices spur innovations, which then become more affordable with time. It’s not perfect, but neither is life on planet Earth — and those who promise they can make a perfect world are invariably selling snake oil. As journalist HL Mencken said, “The urge to save humanity is almost always a false front for the urge to rule.”

Pelosi's dangerous scheme of hyper-taxation, government arbitration, and price controls is a key plank in enacting Medicare for All-style, socialized-medicine schemes. And socialism is something we (apparently now) have to fight off in all its forms, even if millionaire movie stars have started pushing it to get easy headlines. Because of course movie stars will never contribute their own wealth to a socialist system. That’s a key piece of Hollywood bookkeeping.

Jared Whitley is a long-time politico who has worked in the U.S. Congress, White House, and defense industry. He is an award-winning writer, having won best blogger in the state from the Utah Society of Professional Journalists (2018) and best columnist from Best of the West (2016). He earned his MBA from Hult International Business School in Dubai. To read more of his reports — Click Here Now.

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Nancy Pelosi has taken a page from Hollywood’s balance sheet, but in reverse. And in her dangerous game of creative accounting, she’s playing with people’s lives rather than just hoarding a few extra million.
nancy pelosi, lower drug costs now act, policy, healthcare
Wednesday, 13 November 2019 12:56 PM
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