President Ronald Reagan's famous warning about the most terrifying words in the English language---I'm from the government, and I'm here to help---are ringing true again. Price controls passed by President Joe Biden and Democrats aimed at reducing prescription drug prices are instead reducing available prescription drugs. A Bloomberg report says drug companies are now delaying the release of new medications in order to avoid triggering the new price controls, which mandate companies "negotiate" with Medicaid. Critics previously blasted this proposal, calling it "price fixing" that would benefit insurance companies and government entities like Medicaid while failing to actually bring down prices.
"Many groups said this is exactly what was going to happen," says David Balat, CEO of Healthcare Finance Specialists. "Now, we're seeing a slowdown in innovation, a slowdown in medications making it to market, and the only population this is hurting is American patients."
The cost of prescription drugs is a legitimate concern and issue for Americans, but Balat believes politicians are exploiting it with policies like this. "Sadly, I think many of these efforts have more to do with campaigning than they do with making drugs affordable," he tells KTRH. "Remember, Democrats reversed a Trump policy that capped insulin prices...so I think this is more about one-upsmanship than anything else."
Balat believes the real source of high drug prices is too much government intervention, including subsidies, carve-outs and agreements with insurance companies, drug companies, and big healthcare providers. "All (Congress) would need to do to lower prices is to remove these benefits, these advantages, and these safe harbors that they've given them," he says. "But (Congress) is unwilling to do that, because there is too much money that flows from those organizations to our elected officials."
Thus, we find ourselves back at the lesson of Reagan. "It's always something to be cautious about when government tries to come in and fix a problem that they created in the first place," says Balat. "Because inevitably, they only make it worse."
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