Instead of ‘Medicare-for-All,’ Innovation for All

More cures, not more government.

Public support for Democrats’ ‘Medicare for All’ plan has plummeted as voters have begun to learn about some of the scheme’s lesser-known features—little things like a $32.6 trillion price-tag40 percent payment cuts for doctors and hospitals, and nearly 300 million Americans losing their existing health coverage.

Unfortunately, some Democrats are already falling back to a more viable, and thus more dangerous, position: ‘Medicare for More.’ Let’s hope Republicans will take advantage of this temporary slowdown to start offering practical proposals that would actually improve American health care.

Contrary to the conventional wisdom, the GOP did good work on health care in 2017 and 2018. The poor and the sick are already benefiting from its historic repeal of the individual mandate and welcome re-legalization of short term plans. Republicans should now capitalize on that progress by reclaiming the high moral ground in favor of patients and their inalienable right to health care freedom.

A good place to start: defend medical progress. Specifically, stand up for the most important wellspring of medical progress: life-saving pharmaceutical research. Right now the Beltway is focusing madly on the wrong thing—the prices of prescription drugs—while completely ignoring the more important question of where new therapies come from.

Sadly, some Republicans are even drifting toward such wrong-headed ‘solutions’ as Medicare drug price controls and new limits on drug-patent exclusivity. Sigh. With wild-eyed socialists running free in the corridors of Congress, now is not the time go wobbly. Instead of blaming drug companies for high prices and dysfunctional markets, we should be confronting the real culprit: dumb government policies.

Happily, there’s no dearth of good reform ideas for lowering drug costs and improving American health care. For example, this one, and these, and these, and these, and these. Keep it simple. Here are four simple and proven ideas.

1. Oppose Price Controls on Principle

Forty centuries of experience prove price controls never work and always produce counterproductive scarcity. Oppose them in all their forms.

2. Defend Private Research without Apology

Innovation is the lifeblood of medical progress, but it does not happen by accident. It requires massive investments, fueled by the prospect of, yes, financial reward. The profit motive saves lives. Defend it.

3. Massively Increase Drug Supplies

Drug shortages currently cost Americans an estimated $230 million a year. Instead of creating even more shortages, we should dramatically increase supply by speeding up drug approvals by the federal Food and Drug Administration. For example, reciprocity would go a long way. Requiring the FDA to automatically approve any drug whose safety has been confirmed in a foreign country that employs a modern, high-quality drug-approval system similar to FDA’s just makes sense.

Second, the FDA should adjust its rules to emphasize safety only. We should limit FDA’s mission to ensuring drugs are safe, rather than the current standard of ‘safe and effective.’ After all, effectiveness is something patients and doctors have to discover anyway (plus fraudulent efficacy claims can be policed locally).

4. Strengthen Patent Rights

Patents are critical to innovation. But to do its job of promoting progress, a patent must rest firmly on two equally important pillars: it must be truly temporary, and it must be well-nigh irrevocable. If either pillar totters, innovation falters.

Occasionally Congress steps in to reinforce a pillar. For example, back in 1984, it passed the Hatch-Waxman reforms, which proved successful not only in speeding up FDA drug approvals but also in jump-starting a market for generics (lower-cost alternatives to branded drugs). As a result, generics’ market share has swelled from 19 percent in 1984 to 90 percent today. And thanks to generic competition, consumers have saved a staggering $1.7 trillion over the past decade alone.

Unfortunately, the irrevocability pillar has begun to crumble. A 2011 reform law inadvertently exposed pharma innovators to double-jeopardy patent-validity challenges, rendering them vulnerable to attack in two forums: the special courtroom process established under Hatch-Waxman and a newer, internal patent office process known as ‘inter partes review (IPR). Because these two pathways employ wildly different rules and standards—and, amazingly, opposite burdens of proof—malicious ‘patent trolls’ and short-sellers have found broad avenues for mischief.

Today a patent that has been upheld in court will not infrequently go on to be invalidated in IPR, based on the same set of facts! For medical research investment, this uncertainty is devastating.

To fix the problem, Congress should either abolish IPR or at least end the double-jeopardy problem uniquely plaguing pharmaceutical companies. Furthermore, they should enact the recently introduced Tillis-Flores ‘Hatch-Waxman Integrity Act of 2019,’ which would force pharma patent challengers to pick one of the two existing legal pathways and stick to it.

Can Republicans save American consumers from the evils of single-payer? Of course! But first they need to claim the high moral ground. It’s the innovation, stupid.

Dean Clancy, a former senior Republican official in Congress and the White House, writes on U.S. health reform, budget, and constitutional issues. Follow him at deanclancy.com or on Twitter at @DeanClancy.


[Originally published at thefederalist.com, Feb. 28, 2019. @FDRLST. Republished at deanclancy.com.]

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