Among the frustrations with our health care industry, reducing drug prescription costs is an issue that seems to unify all Americans.
Unfortunately, politicians in Washington seemed fixated on solutions that provide short term relief in exchange for long term pain. One such solution currently being debated in Congress is legislation to allow for the importation of cheap prescription drugs from Canada and other nations that have adopted price controls.
It is easy to see the political allure of “cheap drugs,” but what is often ignored by advocates of market distorting price controls is the long-term impact such policies will have on medical innovation and access.
A rarely discussed fact is that more than half of all global pharmaceutical/biotech research occurs in the United States. And make no mistake, this research isn’t cheap. It costs on average over $2.5 Billion and takes 10-12 years to develop a new drug, conduct clinical trials, and navigate the byzantine FDA approval process. Billions more is spent on drug research and testing that never crosses the finish line.
By contrast, countries with price controls have all but eliminated any incentive to pursue new innovations and research, leaving the task of investing in new life saving drugs to the US. The harsh reality is that most of the world is reaping the benefits of new drugs for which Americans are paying. Though this isn’t fair, it would be tragic if we traded away the next generation of life-saving medicine so that we can have cheap drugs today.
The good news is there are other alternatives for reform. If the goal is to reduce drug costs without stifling innovation, then reforming the Food and Drug Administration (FDA) approval process should be the place to start.
A perfect example of needed reform is the widely popular Right-to-Try Law. For the last few years, the Goldwater Institute has led a national effort that would allow terminally ill patients to take advantage of new drugs that passed the first phase of clinical testing. This proposal has been approved in 39 states with broad bipartisan support, yet this common sense reform is still being stonewalled by the FDA.
If Congress is truly concerned about high drug prices, identifying ways to promote innovation and eliminating FDA red tape would be a good place to start. Lawmakers in Washington should abandon the drug importation scheme and pursue real reforms that save money without sacrificing innovation, access, or the quality of our medical care.