08.14.2020 0

Price controls on Medicare prescription drugs will just shift costs to non-Medicare patients

Price controls for Medicare prescription drugs will just pass along costs of drug innovation to non-Medicare patients, could lead to socialized medicine:

President Donald Trump is currently considering an executive order that will direct the Center for Medicare & Medicaid Services (CMS) to implement a proposed 2018 rule instituting an International Pricing Index for Medicare Part B prescription drugs. The intent is to reduce drug costs for seniors. However, it will come at a significant cost to non-Medicare patients, who will be compelled to shoulder the costs of drug innovation. How do we know that? Because the U.S. is already bearing the costs of drug innovation for the rest of the world, which uses similar price controls, in turn passing along the costs to the American people, who pay far more than the rest of the world. Politically, this could also create an opening for Democrats to exploit the disparity by calling for more price controls or even for socialized medicine. House Democrats have proposed Medicare for All, while Speaker Nancy Pelosi (D-Calif.) and former Vice President Joe Biden are similarly offering Biden’s public option. Either way, Democrats can bill socialized medicine as a means of reducing out-of-pocket prescription costs that non-Medicare patients will be burdened with under the CMS rule. Ultimately, the question that remains is who pays for the price of drug innovation?

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