Both Donald Trump and Hillary Clinton get a lot of flak for lying. But in Secretary Clinton’s latest speech on healthcare reform, she didn’t lie — she just got all her facts wrong.
Clinton used her speech to demonize pharmaceutical companies. She argued that greedy firms are gouging consumers and that government-imposed price controls are needed to protect us from them. Her rhetoric ignores reality and her proposals would harm the patients she wants to help.
According to Mrs. Clinton, Americans are “paying the highest price” for medicines, compared to citizens of other developed nations. She implied that drugcompanies are overcharging Americans just because they can. It’s not so simple.
The real reason medicines are more expensive in the United States is that the socialized medicine systems in other countries cap prices on innovator drugs, while also rationing their use. Many foreign governments threaten to break ‘drug patents if firms don’t agree to sell their products at below-market rates. As a result, American consumers shoulder a disproportionate share of the world’s research and development burden. That’s “free-riderism” and it’s not fair. It’s also important to note that generic drugs, which account for 85 percent by volume of all the medicines used in the United States, are cheaper here than in Europe or Canada.
But the answer isn’t to impose our own price caps. That would only discourage research into new medicines. Here’s a fact that Clinton didn’t mention — America invents more than half of new medicines in the world. Stifling U.S. research would lead to vastly fewer medicines here and across the globe. It’d be smarter economically, and better for patients, to negotiate stronger trade protections to prevent other nations from freeloading off American investments.
Secretary Clinton told her audience that their tax dollars fund drug safety evaluations. They do not. All of the complex and costly clinical trials that must be done to bring a new medicine to market are fielded and funded — 100 percent — by the pharmaceutical industry. They are then reviewed by the Food and DrugAdministration. And industry pays for that privilege through “user fees” the FDA collects from pharmaceutical companies.
She also slammed the Medicare Part D drug benefit, touting a doctor’s claim that he “can’t prescribe certain drugs that [his] patients need” because government health programs won’t pay for them. But when it comes to Medicare, that assertion is simply false. Medicare’s prescription drug plans cover, on average, 191 of the 200 medicines most used by seniors. That’s more than most Obamacare exchange options.
In her assault on capitalism and private enterprise, Secretary Clinton singled out the price of hepatitis C drugs. She claimed that makers of these cures — which are vastly more effective than previous therapies — are gouging Americans.
The truth is radically different – and highly documented. Hepatitis C drugs are now cheaper in the United States than in Western Europe, thanks to a price war between competing manufacturers. Clinton inadvertently picked an example that proves the free market yields better, cheaper medicines than socialist systems and fix prices and ration care.
Bashing the companies that research and produce the world’s most groundbreaking medicines might give Clinton a bump in the polls. But her reality-free rhetoric has dangerous consequences.
Clinton’s attacks on drug makers have prompted a sell-off of biotech stocks multiple times over the past year. If companies can’t raise funding from investors, they’ll have to limit new research projects. That means fewer drugs down the road. What’s political expediency worth?
And if Clinton reaches the White House and actually implements price controls, it’s statistically certain Americans will lose out on lifesaving drugs. Price controls in other countries depress research spending by up to $8 billion each year — the equivalent of three or four new drugs, according to a Department of Commerce study.
For a super policy wonk, Secretary Clinton got an awful lot wrong in her recent speech. If she really wants to help patients, perhaps she should pay a little less attention to her focus groups and a little more attention to the facts.
Peter J. Pitts, a former FDA Associate Commissioner, is president of the Center for Medicine in the Public Interest.