Price Controls Are Bad Medicine for Vulnerable Americans

March 3, 2021
By Naomi Lopez

The United States leads the world in medical innovation. Unfortunately, a new series of proposals which attempt to “do something” about drug prices could leave the most vulnerable Americans with inferior health care. Those with severe or rare diseases where the newest treatments offer their best hope or those who lack the means to seek care outside their state would be at greatest risk.

In a recent op-ed in the Daily Oklahoman, Goldwater Institute visiting fellow Rafael Fonseca, MD and I discussed that, if a proposed Oklahoma bill becomes law, Oklahomans will be getting a prescription for lower-quality care. Unfortunately, Oklahoma is not alone in flirting with this dangerous and misguided proposal. Other states including Hawaii, North Dakota, Pennsylvania, and Rhode Island are also considering similar legislation. The same harms that could result from delaying access to needed treatments for months or years, which is a regular occurrence in Canada, could happen in the states where this proposal is adopted.

In the article we write: “Senate Bill 734 would establish price controls on the leading drug treatments, making it illegal for any health plan to purchase drug treatments where the price exceeded a government-determined reference price. This would apply to state government programs, as well as all private employer-sponsored health plans that cover Oklahomans. These price controls would be based on drug prices found in Canada, a country that explicitly rations care under its socialized medicine system to keep costs down. Put simply, that system is an innovation-killer—and should Senate Bill 734 become law, Oklahomans will be getting a prescription for lower-quality care.”

The United States leads the world in medical innovation. Unfortunately, these proposals which attempt to “do something” about drug prices could leave these states’ most vulnerable – those with severe or rare diseases where the newest treatments offer their best hope or those who lack the means to seek care outside their state – with inferior care.

Healthcare innovation is moving faster than ever. Attempting to peg the “value” of a treatment to a country that explicitly rations care – with little to no regard for the individual patient or the physician’s expertise – is bad medicine. There are no easy answers to the many problems in our nation’s healthcare system, but lawmakers and the public should be aware of and publicly debate whether we want to replicate the approach of a foreign country that rations care, taking these important decisions out of doctors’ and patients’ hands and replacing them with a bureaucratic, one-size-fits-all  approach.

Naomi Lopez is the Director of Healthcare Policy at the Goldwater Institute. Rafael Fonseca, MD and Lopez are co-authors of the recent Goldwater Institute “Deciding What a Life is Worth: The Top Three Things Lawmakers Need to Know About QALYs.”