Biden is all talk and no game on health care innovation

OPINION:

In 2016, then-Vice President Joe Biden was charged with leading the “cancer moonshot” — an aspirational call to find a cure for one of the most destructive diseases ever. Fast-forward to today, and now as president, Mr. Biden continues to wash, rinse and repeat the rhetoric.

But unfortunately, unlike the call from President John F. Kennedy to reach for the stars in the early 1960s, the White House has thus far been all talk and no game. In fact, it has pursued a counterproductive policy agenda. The Biden administration, in coordination with its allies in Congress, has thrown curveballs at medical innovation at every step of the term — erecting roadblocks to the very medical breakthroughs they claim to encourage. 

The disparity emphasizes how Mr. Biden’s health care strategy is more for political gain than an honest effort to improve Americans’ medical outcomes.

Exhibit A is the drug price controls included in the Inflation Reduction Act. Sold as “negotiating,” in reality, the government is able to compel private drugmakers to provide certain medications at a fraction of the market price through Medicare. The result is exactly what you would expect. The government price manipulation is having a chilling effect on the development of new, lifesaving treatments, therapies and vaccines. 

A report from the University of Chicago, for example, finds the upside-down incentives will translate to nearly 200 fewer treatment advances within small molecule drugs over the next two decades. Notably, this category of medication often encompasses oncology therapies because of its unique ability to penetrate cancerous cells.

And alarmingly, a follow-up analysis estimates that research and development funding around cancer could fall by up to one-fifth compared with 2022 levels because of Mr. Biden’s “Inflation Act.” The snowball effect will continue to worsen as companies retool to focus on medical areas where economic opportunity is healthier. After all, bringing a new drug to market can cost more than $2 billion. If businesses can’t recoup the investment, bankruptcy is in the cards.

Rather than pulling its foot off the gas with this misguided approach, the White House is attempting to double down on the strategy. In his recent State of the Union address, Mr. Biden remarked that “it’s now time to go further and give Medicare the power to negotiate lower prices for 500 different drugs over the next decade.”

Again, “negotiate” is code for “hold hostage.”

Beyond joint action between the executive and legislative branches, the Biden administration is also working to unilaterally handicap the private sector’s ability to innovate for low-income Americans. A policy proposal from the Department of Health and Human Services would jeopardize the development of new pharmaceuticals that primarily benefit Medicaid recipients.

In short, the rule would require costlier price concessions from drugmakers in exchange for the license to supply the country’s premier health care safety net.

As a prerequisite to participating in the program, drugmakers are compelled to provide medicine at the lowest price found in the private market. Under the proposed change, manufacturers would alternatively be forced to offer products at an even steeper discount via a follow-the-pill formula — a sour economic scenario that would discourage companies from serving Medicaid patients. 

The move is a slap in the face to economically disadvantaged, disabled, and unemployed Americans, as well as the research and development departments that cater to their health care needs.

Democrats have pledged but not delivered on healthcare promises before. PolitiFact’s 2013 lie of the year, “if you like your health care plan, you can keep it” from Barack Obama comes to mind. If the Biden administration wants to break precedent and truly deliver on its “cancer moonshot,” officials need to get out of their own way.

Encouraging free market innovation is the only way to make the ambitious hope a reality.

• Jamey Bowers is a partner and owner at Berman and Co.