Democrats are looking for ways to finance their $3.5 trillion reconciliation bill and one plan is to put price controls on prescription drugs. If enacted, these policies would cause huge losses to the patients. Far from saving money, price controls will make better health more expensive.
The Biden White House has proposed requiring Medicare to “negotiate” drug prices. If companies don’t accept the government price, they face a tax of up to 95% on sales, which means it’s not negotiation but demand. Pharmaceutical companies will have to offer the same rates to commercial insurers. The scheme will also link the rise in prices to inflation, which will translate into higher prices for drugs only at the time of launch.