On the Senate campaign trail, Josh Hawley promised to shake up Washington, D.C. He’s proving to be a man of his word.
Hawley just proposed a bill that would bar pharmaceutical companies from setting higher prices in the United States than they do in Canada, the United Kingdom and other industrialized nations.
That might sound like the sort of America-first policy we need to reduce health care costs. But it’s not. Though unquestionably well-intentioned, Hawley’s bill would likely backfire and deprive Americans of lifesaving medicines.
It’s unfair that Americans face higher drug prices than patients in other countries — especially given the fact that nearly a quarter of Americans struggle to afford their prescriptions, according to the Kaiser Family Foundation.
But there’s a reason for this price disparity. Many other countries set strict caps on drug prices. For instance, Canada’s Patented Medicine Prices Review Board has the power to force drug companies to lower prices. The United Kingdom simply refuses to cover drugs that bureaucrats deem too expensive.
Such restrictions make drug companies unable or unwilling to sell their products in many foreign countries. Americans have access to 95% of cancer drugs released worldwide between 2011 and 2018. But Canadian patients have access to just 58% of those medicines. Patients in the United Kingdom have access to just 74%.
By capping prices in the U.S., Hawley thinks he can force drug companies to raise prices elsewhere and keep other countries from freeloading off American research and development efforts. But there’s no reason to think foreign governments would cooperate. Why would they change now, after years of refusing to cover lifesaving drugs?
Ultimately, Hawley’s bill would just bring foreign price controls stateside. That’s bad news for drug companies, which already face massive barriers to success. Bringing a new drug to patients is expensive, time-consuming and risky. Only 12% of experimental treatments ever make it to market. All told, it costs approximately $2.6 billion and takes up to 15 years to create a single drug, according to the Tufts Center for the Study of Drug Development.
Companies are able to recoup their investments only if they can sell their drugs at market prices. That’s why the overwhelming majority of drug companies first launch their medicines in the United States. When a new cancer drug is launched anywhere in the world, British patients must wait a median of eight months to access it. Canadians wait a median of 11 months. Americans, by contrast, have immediate access to nearly all oncology treatments.
America has led the world in drug development for decades. Since the turn of the century, the U.S. pharmaceutical industry has invested more than half a trillion dollars developing new drugs. More than half of the world’s new cures come from U.S. labs.
Thank to this innovation, Americans live longer, healthier lives. Cancer death rates have dropped nearly 26% since 1990 thanks to new medicines. Death rates from HIV/AIDS, likewise, have fallen 88% over the last three decades.
Hawley’s bill would stop these advancements dead in their tracks. Price controls would deter research and development investments. Today’s incurable diseases might remain incurable forever.
Missouri patients would be hit particularly hard. The American Cancer Society estimates that more than 13,000 Missourians will die of cancer this year — and another 35,000 will be diagnosed. Close to 4 million Missourians battle at least one chronic condition.
Groundbreaking medicines would be a boon to the Show-Me State. According to the Partnership to Fight Chronic Disease, a 501(c)(4) nonprofit, breakthrough drugs could help prevent 3.4 million cases of chronic disease in Missouri over the next 15 years. These drugs could save more than 320,000 lives and prevent $107 billion in unneeded spending on those chronic ailments.
That assumes these drugs actually make it to patients, of course — and they probably won’t if Hawley’s bill were enacted. Missouri patients have too much to lose for their junior senator to roll the dice on price controls.
Stacy Washington is a decorated Air Force veteran and host of the radio show “Stacy on the Right.”