Act Now To Protect Your Medicare Part B!

A Note From Americans For Tax Reform

Millions of Americans rely on Medicare Part B to balance the cost of prescription drugs and keep America’s system open for innovation for the next generation of life-saving cures.

The Department of Health and Human Services is trying to rush through a pilot project that would import European-style price controls—that’s bad for today’s patients and tomorrow’s medication innovations.

Tell HHS Secretary Alex Azar and the Trump administration: scrap the Part B pilot project and PROTECT MY PART B!

Here’s the deal:

  • Americans for Tax Reform and a host of other organizations oppose creating an “International Pricing Index” (IPI) payment model for drugs administered under Medicare Part B
  • Instead of fighting these price controls, we are concerned that the proposed International Pricing Index adopts them. This proposal will suppress competition and innovation and harm American competitiveness and investment.
  • Conservatives have long opposed price controls because they utilize government power to forcefully lower costs in a way that distorts the economically-efficient behavior and natural incentives created by the free market.
  • When imposed on medicines, price controls suppress innovation and access to new medicines. This deters the development and supply of new life saving and life improving medicines to the detriment of consumers, patients, and doctors.
  • The U.S. is a world leader in research & development because the system of healthcare rejects price controls and encourages innovation. As a result, a majority of new medicines are developed and launched in America.
  • WE DO NOT NEED TO IMPORT EUROPE’S ANTI-INNOVATION PRICE CONTROLS!

Read our recent op-ed in The Hill: “International price index for medicine will harm patients”

“President Trump was elected on his promise to stop other nations from taking advantage of the United States. Our allies let us pay for most of their own national defense needs. Treaties allowed once poor countries to hit American products with tariffs and trade barriers. The Paris agreement on climate change burdened our manufacturers and workers, while letting China and India build and expand without such onerous restrictions.

Trump highlighted that nations steal our intellectual property through piracy and use their monopoly power as a buyer to force our innovative drug industry to sell American products at cut rate prices or have their patents stripped. This is extortion plain and simple. Trump is right to fight to reform all these abuses of our generous nature. But in one of these fights the administration is talking about surrendering instead. The administration recently proposed an international pricing index for the calculation of physician administered drugs under Medicare Part B.

Instead of fighting for American exports and fair prices that respect our investment of billions of dollars in research and development of new lifesaving drugs, the plan would import socialist style price controls. This is failed policy dating back to the Roman Empire and beyond. The Medicare Part B system is based off market pricing in which costs are calculated through a formula that accounts for the “average sales price” in the United States, which also includes the discounts negotiated between hospitals and insurers.”

Read the full op-ed here at TheHill.com

Read Our Coalition Letter to HHS Secretary Alex Azar

Dear Secretary Azar:

We write in opposition to the administration’s Advanced Notice of Proposed Rule Making (ANPRM) to create an “International Pricing Index” (IPI) payment model for drugs administered under Medicare Part B.

The proposed payment model imports foreign price controls into the U.S. by modifying the Part B reimbursement rate so that it is calculated based off the prices set by 14 countries.

Download The PDF

Instead of relying on government price setting, Medicare Part B is currently calculated based on market prices. The formula, which is based on the “Average Sales Price” (ASP) in the U.S. market, includes the discounts negotiated between payers, hospitals and health plans. Recently this system led to a 0.8 percent decrease in the cost of the top 50 Part B drugs.

In contrast, foreign countries frequently utilize a range of arbitrary and market-distorting policies to determine the cost of medicines – by definition such approaches are price controls. There is no negotiation and foreign governments often force innovators to accept lower prices in a “take-it-or-leave it” proposition. This results in reduced or restricted access to new medicines and higher prices for those medicines that enter the market.

Conservatives have long opposed price controls because they utilize government power to forcefully lower costs in a way that distorts the economically-efficient behavior and natural incentives created by the free market.

When imposed on medicines, price controls suppress innovation and access to new medicines. This deters the development and supply of new life saving and life improving medicines to the determent of consumers, patients, and doctors.

The U.S. is a world leader in research & development because the system of healthcare rejects price controls and encourages innovation. As a result, a majority of new medicines are developed and launched in America.

This innovative environment is enormously beneficial to the long-term well-being of Americans and the efficiency of the U.S. healthcare system. In addition, the investment required for research and development of medicines leads to more high-paying jobs and a stronger economy.

Importing price controls will undermine this system by basing U.S. prices on the prices of socialized foreign healthcare systems. This will inevitably suppress innovation and harm American competitiveness.

Ironically, the administration recognized the damage that adopting foreign pricing would have on American innovation in a report released in February 2018 by the president’s Council of Economic Advisors:

 “If the United States had adopted the centralized drug pricing policy in other developed nations twenty years ago, then the world may not have highly valuable treatments for diseases that required significant investment.”

We are also concerned that the IPI is being proposed through the Obamacare Center for Medicare and Medicaid Innovation (CMMI). There is long standing conservative opposition to CMMI based on the concern that it bypasses Congress’ power over the purse as enshrined in Article I of the constitution.

CMMI is completely exempt from the Congressional appropriations process and is prone to being misused in ways that result in the executive branch of government usurping Congress’ role in setting policy.

The administration has repeatedly acknowledged that foreign price controls have damaged medical innovation.

Instead of fighting these price controls, we are concerned that the proposed International Pricing Index adopts them. This proposal will suppress competition and innovation and harm American competitiveness and investment.

We respectfully request that your department withdraw this proposal.

Sincerely,

[Coalition Signatories]