U.S. Chamber Letter to Senate Warns Against Price Controls

Monday, June 12, 2000 - 8:00pm

Washington, D.C. – The U.S. Chamber of Commerce, the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region, strongly opposes any legislation that will impose a government price control on pharmaceuticals sold in the United States. The Chamber today sent the following letter to the Senate Health, Education, Labor & Pensions Committee:

The Chamber opposes "price controls" of any sort that involve government intervention in the free market, whether by direct government purchase and distribution of products or by less direct means. Senate consideration of legislation to impose foreign governments' prices on medication sold in the United States, or to permit re-importation of drugs whose prices are controlled by foreign countries, has grave implications for a multitude of consumer products. We find particularly onerous any requirement that imposes foreign government pricing on American consumers in these ways. Such proposals ignore completely external factors that affect the distribution and consumption of products in other countries, as well as the effect on the availability of new innovations in those countries.

For example, countries that set a price limit on pharmaceuticals, such as Canada, also control the prices and distribution of all health-related goods and services. Their health care system today reflects the serious problems with such an approach - long waits for urgently needed care that can seriously compromise patient outcomes. Even cancer treatment is often delayed anywhere from several weeks to several months, a scenario that is unthinkable in this country. Those Canadians who can afford it carry private health coverage to ensure more rapid access to care in their native country, and increasingly in the United States, where technology and pharmaceutical innovations are available sooner and more widely.

S. 2464, the "Prescription Drug Fairness Act," would require drug manufacturers to sell their products in the United States at the same price they are sold in foreign countries. This proposal is falsely predicated on the assumption that manufacturers freely negotiate their prices with foreign consumers. In fact, foreign governments often are either the direct purchasers of medication or they closely regulate the price of products sold to consumers. The price dictated for pharmaceuticals is frequently based on the tight expenditure limits those countries have imposed on health care spending rather than the product itself, including the cost to the manufacturer to develop breakthrough therapies.

Moreover, S. 2464 expands the Robinson-Patman Anti-discrimination Act's right to sue provisions to include U.S. consumers of prescription drugs who are presumed to be harmed by the disparity of foreign governments' arbitrary pricing. More litigation will only ensure the diversion of manufacturer resources from research and development of new therapies to litigation defense. The major beneficiary of this provision will be the trial bar, and it comes at the expense of millions of children and adults with life-threatening and disabling diseases for which a cure will be pushed further from reach.

Like all who purchase medication, employers too are concerned about the cost of the pharmaceutical component of their health benefit programs. But addressing only one aspect of the three-legged stool of health care - cost, quality and access - makes the system unstable. In the matter at hand, setting an artificial price on drugs will compromise the overall quality of the health plan and decrease access to improved therapies.

We urge the United States Senate to address the issue of pharmaceutical costs in a comprehensive and responsible manner that does not threaten access or quality of care. Doing one without considering the ramifications on the others is a disservice to all who benefit from the best health care in the world, and ready access to pharmaceutical innovation and development is a fundamental reason for this status. The U.S. Chamber of Commerce urges you to oppose S. 2464 and to reject any proposal that relegates this system to the lowest common denominator.

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