Price Controls Aren't Medicaid Reform

Property rights conservatives oppose anything that would inject government price controls, including those known as “most favored nation,” into the Medicaid program (or any other part of our health system). Energy & Commerce and other House and Senate lawmakers should actually reform Medicaid, not import foreign socialists' price controls.

Conservatives for Property Rights has consistently opposed this approach and all government price controls because they threaten both private property rights and medical progress that benefits American consumers and patients suffering from serious diseases.

To import foreign socialized price controls into America’s largest price-controlled program, Medicaid, would do nothing to help Americans afford their medicines. Rather, it likely would reduce U.S. patients’ access to lifesaving medicines. Moreover, MFN would effectively import metrics that undervalue human life—the exact opposite of the QALY ban the E&C Committee passed in the Protecting Health Care for All Patients Act last Congress.

Medicaid already gets the “best price” for prescription drugs. Pharmaceutical innovators are required to provide Medicaid rebates averaging more than 50 percent. Yet, MFN would raise costs and worsen existing market distortions that socialized medicine abroad and, to a lesser extent in U.S. government health programs, already cause. MFN would exacerbate the perverse incentives that cause 340B to drive up health costs. MFN very well could force many manufacturers to pay Medicaid for drugs. Talk about market distortion!

MFN price controls are tantamount to a tax on an industry that supports 5 million good-paying American jobs. The net effect of MFN in Medicaid will be to kill American jobs and American innovation, particularly for addressing the most acute conditions in the Medicaid and Medicare populations. This risks handing U.S. biopharma leadership over to China.

A better alternative for budget reconciliation is actual Medicaid reform. Wrest savings by disqualifying able-bodied people from Medicaid and imposing a work requirement. Restore pre-Obama-Biden qualifications for Medicaid, which weren’t exactly stingy.

Government price controls are a nonstarter. They don’t belong in American health care. Market-based competition and consumer choice are the prescription for curbing costs while improving quality and fostering innovation. Say no to MFN, no to any form of socialized medicine.