No. of Recommendations: 1
1) Have drug prices come down? It is a simple question and the answer is NO.
2) Given the answer to #1, is it true that Biden has (past tense) brought prices down? The only answer can be No.Heh. These guys don't know what Biden has done here, nor do they understand the consequences.
Let's look at what the "Inflation reduction act" does and the consequences of that, shall we?
https://www.nytimes.com/2023/08/29/us/politics/med...Buried at the end of the article, we find
Now that the list of drugs is public, their makers have until Oct. 1 to declare whether they will participate in negotiations with the government. Companies that decline to negotiate must either pay a large excise tax or withdraw all of their products from both Medicare and Medicaid, the federal-state program that provides health coverage to low-income people. Hmm. That doesn't sound like "negotiating" to me. More like extortion. But what are these excise taxes? What happens if a company refuses to play along?
Hat tip to Hot Air for finding this:
https://crsreports.congress.gov/product/pdf/R/R472...The excise tax rate would range from 185.71% to 1,900% of the selected drug's price depending on the duration of noncompliance. The provision does not specify these rates explicitly, but instead defines an applicable percentage which equals the share of the post-tax sale price attributable to the excise tax. Specifically, the applicable percentage as defined in the statute equals tax/(tax+price) which simplifies to tax rate/(tax rate+1) with the applicable percentages being 65% for the sales of selected drugs during the first 90 days of noncompliance, 75% for sales during the 91st to 180th days of noncompliance, 85% for sales during the 181st to 270th days of noncompliance, and 95% for sales after the 270th day of noncompliance. Hence, the corresponding tax rates would be calculated as (applicable percentage)/(1- applicable percentage) and equal 185.71%, 300%, 566.67% and 1,900% respectively, depending on the duration of noncompliance. For example, if a selected drug was subject to the top tax rate of 1,900% and cost $10 pretax, it would cost $200 post-tax with $190 of the $200 cost (or 95%, the applicable percentage) being attributable to the excise tax.Set aside the 1,900% stuff. Just taking 65-75-95% of the amount of sales effectively tells a drug company not to offer it on the market.
These "negotiations" are Biden's team pointing guns at the pharma company and saying "You can either cut the price by 50% or you can cut the price by 90%". Sure, that will work.
Until the drug companies decide not to play. Why would you even bother to ship a drug at below cost?
The democrats will get their short term political optics win - and for their voter base, a bunch of folks unable to think 5 minutes ahead, so that's enough - but for the rest of the market, say hello to shortages or outright discontinuations.
Bbbbbut no problem, libs will say: the patents will expire and some generic drug maker will step in and make a cheap one? That works great until the number of new medicines also dries up.
