Policy Proposals

On this page, you’ll find our analysis on key state and federal pharmaceutical policy proposals, with a focus on providing the expected economic impact from these proposals.

What's the difference between getting an x-ray at the hospital and getting one at the doctor's office? The former could cost a lot more than the latter. Medicare often reimburses hospitals more than it pays doctor's offices for the same procedure. Hospitals claim these payment differentials are necessary because they are subject to more extensive regulatory requirements and face other fees; higher payments offset those costs. In reality, these uneven payments simply incentivize the most wasteful and monopolistic tendencies in American health care. Click to read...

Should the government put a price on human life? The new head of the House Energy and Commerce Committee, Rep. Cathy McMorris Rodgers, R-Wash., doesn't think so. She recently introduced legislation alongside several of her colleagues to ban the use of "quality-adjusted life years," or QALYs, in federal healthcare programs. A QALY purports to measure the value of one additional year of life. A QALY of one is equivalent to one year of life in perfect health. A value of zero is death. Economists sometimes try to...

Americans are getting squeezed by rising health care costs. The latest numbers from the Centers for Medicare and Medicaid Services show that patient out-of-pocket spending increased by 10.4% in 2021, a rate not seen for more than three decades. The cost of monthly health insurance premiums also leapt, by 6.5%. And that was all before last year’s rapid inflation squeezed household budgets. One often overlooked cause of soaring health care costs is hospital consolidation. When a single health care system becomes...

A group of 25 senators, led by Sen. Elizabeth Warren (D-MA), requested that HHS Sec. Xavier Becerra exercise march-in rights for Xtandi (enzalutamide), a prostate cancer therapeutic. March-in rights give the government the right to take a license for itself if it helped to fund the product owner's research . . . “Net prices, which take into account discounts and rebates, have been going down for several years,” Wayne Winegarden, Ph.D., senior fellow, business and economics, Pacific Research Institute, told BioSpace. “Gross...

The U.S. Departments of Labor and Health and Human Services has issued a new joint federal rule. Another federal mandate is hardly newsworthy, but one devised under the Trump Administration and eagerly implemented by the Biden Administration is certainly unique. Beyond the politics, the Transparency in Coverage rule, while not without its shortcomings, helps to address on one of the fundamental flaws worsening the effectiveness of the nation’s healthcare system – its opacity. The lack of transparency that pervades the healthcare system...

Next month, Arizonans will consider Proposition 209, a ballot initiative intended to alleviate a supposed “crisis” in medical debt. A look at the facts reveals there is no such crisis. If this ballot initiative passes, ordinary Arizonans could face higher interest rates on all kinds of debt, have fewer lenders to choose from and pay higher prices for goods and services. The initiative has two parts. The first caps the interest rate for medical expenses at 3%. The second imposes sweeping new limits on how lenders...

A new poll from West Health and Gallup paints a grim picture of health care in the United States. Among the survey's most striking findings is that three-quarters of the country grades the cost of care at either a D or an F. Critics of our nation's market-based health system are sure to see these survey findings as evidence that the status quo is broken. But what person wouldn't want to pay less for health care — or any other good or service they desire? By...

The Centers for Medicare and Medicaid Services (CMS) recent decision on home healthcare services, if implemented, will increase overall healthcare expenditures and decrease the quality of services received by patients. CMS’ overarching goal is praiseworthy – the agency is trying to maintain budget neutrality while changing its payment system rates. A more praiseworthy goal would be to reduce expenditures but that is a different question, the larger problem is that CMS’ proposed expenditure reductions will more likely increase spending over time. At...

The wife of California Republican congressman Tom McClintock, Lori McClintock, died of dehydration due to gastroenteritis caused by “adverse effects of white mulberry leaf ingestion,” according to a just-released coroner’s report. That herb is just one of many dubious and potentially life-threatening herbal remedies and other dietary supplements on the market today. Dietary supplements are big business. Three out of four Americans take one or more regularly. For older Americans, the fraction is four out of five. One in three children also takes supplements....

Pharmacy benefit managers (PBMs) deploy numerous anticompetitive actions, which have not gone unnoticed. The Federal Trade Commission (FTC) has launched an inquiry to examine whether PBMs have adverse impacts “on the access and affordability of prescription drugs.” The government’s probe is welcome news. But there are many detrimental PBM practices that are creating unwarranted risks to patients’ health and, consequently, require remedying sooner rather than later. The growing restrictions on where providers can source their drugs, a practice referred to as white bagging,...

Among the recently passed Inflation Reduction Act's most destructive provisions are the price controls it puts on prescription drugs through Medicare. These price controls are certain to have a chilling effect on pharmaceutical innovation in the years ahead. But the precise manner in which the IRA will undermine biomedical research and development — and deprive future patients of breakthrough treatments — is worth considering. The law could end up discouraging exactly the kinds of scientific inquiry — and commercial development — that patients need. First, some background. In an...

The powers that be in Washington are renewing their campaign to gain greater control over Americans’ ability to access life-saving drugs. Lawmakers and regulators alike have decided to wage war on one of the few components of our health care system that works well — the Food and Drug Administration’s accelerated approval process. This regulatory pathway has saved countless lives by speeding groundbreaking medicines to market. Obstructing that pathway would be folly. The FDA created the accelerated approval pathway in 1992 in...

President Joe Biden returned from vacation in South Carolina this week to sign the Inflation Reduction Act into law. The country would have been better off had he stayed at the beach. The IRA includes a combination of massive tax increases, innovation-destroying price controls, and debt-funded spending commitments. That might be music to the ears of Democrats. But for American households struggling with spiraling prices, the future has rarely looked so dim. The new spending package comes at a moment of widespread pessimism about the future of...

By Henry Miller & Stanley Young Are you confused about conflicting “research” findings on certain foods’ effects on our health? It would hardly be surprising. First, butter is the enemy; then, it’s solid margarine. Is caffeine good or bad for your heart? For a time, beta-carotene supplements are thought to prevent cancer — until they are found to increase the risk of lung cancer in smokers. And finally, does a woman’s diet at conception determine the sex of her fetus? When you do a...

Every month, it seems, the United States smashes another unenviable record when it comes to drug addiction and overdose statistics. According to the Centers for Disease Control and Prevention (CDC), the latest data show a jaw-dropping 108,000 overdose deaths in 2021. America’s families and communities are reeling — and the federal government needs to help. As part of a broader strategy to save lives, Congress and the Biden administration must embrace efforts to prevent addiction before it can begin. This means reducing the overprescribing of...

Proponents of prescription-drug importation notched a victory last week. The Senate Health, Education, Labor, and Pensions Committee green-lit a bill that would enable individuals to import medicines from Canada in the name of lowering out-of-pocket costs. It's not something Americans should welcome or support. Drugs imported from outside the United States will always pose a significant safety risk. Even if they didn't, importing medicines from countries with price controls on drugs would have devastating effects on medical innovation at home. It's an article of...

Entrepreneurs, empowered by competitive markets, drive economic progress. When market regulations incentivize productive activities, entrepreneurs radically improve existing goods and services and create new products we never knew that we couldn’t live without. The wrong regulatory structures misalign these positive incentives. They thwart or misappropriate entrepreneurial efforts resulting in lost opportunities to improve consumer welfare and, when the disincentives are particularly pernicious, can even worsen consumer outcomes. A fitting example is the policy obstacles in the drug market that empower industry...

In the last three months, state legislators have introduced more than 70 bills that would modify “scope-of-practice” laws—regulations that set limits on the care physician assistants, nurse practitioners, and other qualified professionals can provide to patients. It’s no wonder why. Many state lawmakers understood the benefits of temporarily relaxing these restrictions as COVID-19 strained the healthcare system. Freeing up physician assistants and nurse practitioners to provide more services made it easier for patients to access care during the pandemic. And it gave physicians more time...

Last week, the U.S. Senate Finance Committee held a hearing, "Prescription Drug Price Inflation: An Urgent Need to Lower Drug Prices in Medicare." It's rare to see so many falsehoods in so few words. The idea that drug-price inflation is especially bad or that it poses some sort of threat to our health system is at best confused — and at worst dishonest. The hearing was largely intended to give Senate Democrats a forum to grandstand with calls for price controls on prescription drugs. That such...

READ THE REPORT The problem of drug affordability is caused by the perverse incentives created by the third-party payer system that have disempowered patients in favor of insurers and other supply-chain intermediaries. The insurance flaws have created pricing systems that inequitably transfer a disproportionate share of drug costs on to patients. This arrangement inappropriately imposes a drug affordability problem on patients who require expensive medicines. The insurance flaws also incent benefit design policies that create additional affordability burdens and unnecessarily increase...