For Immediate Release
Wednesday, August 30, 2023
Biden Price Control Scheme Will Lead to Shortages and Rationing
(Washington, D.C., Wednesday, August 30, 2023) CF&P Vice President Brian Garst released the following statement condemning the Biden administration’s plan to price control ten vital prescription drugs under Medicare:
“Most first-year economic students understand that price controls inevitably lead to shortages and rationing, a lesson the Biden White House apparently missed. The White House’s price control plan on prescription drugs will not bypass the fundamental laws of economics and will hurt seniors and the most vulnerable in our society.
Under the scheme, if a pharmaceutical company doesn’t agree to the price set by the government, they’ll be taxed 65% of the total U.S. sales of that drug, not just the profits. This tax rate will escalate by 10% every quarter until it reaches 95% of the total revenue generated from that drug’s sales. Essentially, the company can either conform to the government’s stipulated price or eventually part with 95% of every dollar earned from the drug’s sales. This is coercion, more mob-style strong-arming than genuine negotiation. This type of policy is more attuned with authoritarian regimes than the United States of America.
The current direction of U.S. policy threatens to bring about long-lasting negative repercussions unless reconsidered and reversed. A decline in innovators and breakthrough drugs will lead to higher expenses, restricted medical choices for patients, and a diminished global standing for the U.S. in this vital sector.
The results of President Biden’s drug pricing strategies risk weakening both our healthcare system and global competitive edge. This not only affects American consumers but has broader implications, given the global reliance on the U.S.’s pioneering bio-pharmaceutical contributions.”
For additional comments:
Daniel J. Mitchell, President: mitchell@freedomandprosperity.org
Brian Garst, Vice President: bgarst@freedomandprosperity.org
———
Image credit: Images Money | CC BY 2.0.
