House Speaker Nancy Pelosi is surrendering to the radical, socialist wing of the Democratic Party on health care, according to her new, $32 trillion drug-pricing proposal leaked last week.
The Pelosi plan takes a sledgehammer to the Medicare system at the expense of patients, innovators and free enterprise and puts the U.S. health care system firmly on a pathway toward Rep. Alexandria Ocasio-Cortez’s and Sen. Bernie Sanders-style socialized medicine.
The proposal empowers government bureaucrats to set the prices of the top 250 prescription medicines. If a manufacturer does not agree with this price or refuses to “negotiate,” the government will hit it with a 75 percent excise tax on the gross sales of a drug from the previous year — not a 75 percent tax on profits, but a 75 percent tax on sales.
The pan would also impose foreign price controls on American drugs by forcing manufacturers to calibrate prices of lifesaving medicine to those of half-a-dozen nations from Australia to Germany.
The bill would impose a retroactive inflationary penalty for drugs covered under Medicare Parts B and D. This retroactivity (which goes back to 2016) is particularly egregious because it would punish manufacturers for past decisions made, the U.S. Constitution’s prohibition on ex post facto laws be damned.
The Pelosi plan does not constitute a good-faith effort to negotiate lower prescription drug prices. Instead, the proposal represents a giant step toward government controlling the means of production within the pharmaceutical industry — a textbook example of state socialism.
Medical innovation only exists because manufacturers are able to invest significant time and money in research and development. This is especially important to senior citizens, whose quality of life is often governed by access to lifesaving medicine.
On average, it takes more than a decade to bring a new drug to market. Of all the experimental drugs under development, 90 percent do not receive approval from the Food and Drug Administration and never come to market. In 2016 alone, American drug companies invested $90 billion for therapy research and development of drugs, more than three times the R&D money spent by the National Institutes of Health.
This process is inherently risky — more than 150 experimental Alzheimer’s therapies have been tried over the past 20 years. Despite these challenges, American innovators continue striving toward a cure for Alzheimer’s. This persistent search for a cure contributes significantly to the estimated $300 billion in annual costs associated with the disease.
Prescription drugs comprise just 14 percent of health care spending. Hospital services comprise 30 percent of health care spending, and is growing at a faster rate than pharmaceutical care.
The United States is a world leader and accounts for almost 60 percent of medical innovation in the world.
This innovation means more lifesaving and life-preserving medicines, and contributes to a strong U.S. economy and supports high-paying jobs across the country.
Mrs. Pelosi’s plan to impose punitive taxes, foreign price controls and retroactive penalties would cause research on drugs to fight Alzheimer’s and other diseases to come to a screeching halt.
Mrs. Pelosi’s plan helps achieve the left’s real goal — complete government takeover of the nation’s health care system. If Mrs. Pelosi and the left succeed in passing this bill, it will not be the last health care measure they pass that will dramatically increase spending and taxes, limit choice and access, and put control of personal decisions in the hands of bureaucrats. Over time, they will try to take employer-provided health care away from over 150 million Americans. The majority of House Democrats already support this step.
Speaker Pelosi’s draft plan for prescription drugs is an unabashed attempt to impose greater government control on the health care system. The Pelosi plan will wreck scientific innovation and ultimately harm the people who rely today or tomorrow upon new drugs to save their lives and those of their loved ones.
• Grover Norquist is the president of Americans for Tax Reform. Jim Martin is the founder and chairman of the 60 Plus Association.