Opinion: CBO estimate on Pelosi drug bill misses its long-term impact on health
House Democrats got an early Halloween treat with the Congressional Budget Office’s review of HR 3, Speaker Nancy Pelosi’s proposed drug pricing reform, also known as the Lower Drug Costs Now Act. The headline was the estimated $345 billion Medicare savings over seven years. Key to the CBO’s score was the provision in the bill authorizing the health and human services secretary to negotiate prices for 125 branded drugs, plus insulin, with a price ceiling tied to international benchmarks.
There is no doubt that the Pelosi bill would reduce drug prices. A fair question — which critics are asking — is whether CBO considered the long-term consequences, especially for health. Most people understand there is a tradeoff between prices and innovation. As research has made clear, revenues generated by today’s top-selling drugs finance the innovation necessary to discover new treatments, and the U.S. is the source of perhaps 70% of global industry profits.
