Republicans should not help Bernie Sanders push socialized medicine

OPINION:

The Senate Committee on Health, Education, Labor and Pensions held a hearing last week about high prices for prescription drugs — specifically, insulin. It’s expected that they’ll roll an insulin price cap into a big health care bill and many Republicans will help Democrats pass it, thereby bringing the country one big step closer to socialized medicine.

I strongly urge legislators to rethink this ill-conceived policy. While capping out-of-pocket costs may sound like an easy answer to help constituents, it ignores the root cause of high prescription drug costs and stands to benefit only the big drug companies in the long run.

Since a patient’s out-of-pocket price would be artificially capped, Big Pharma could unreasonably increase prices knowing that everyone else would be left to make up the difference. That means employers, unions, the government and other payers would have to pay higher insurance premiums. So, either taxpayers would pay or employees would pay. But one way or another, we’d all get hurt.

As a small-business owner and advocate, I know very well that health insurance for employees is one of a small business’s biggest costs. In order to continue to provide this benefit as prices go up, employers have to either reduce benefits or increase the share of workers’ pay. An insulin price cap would only drive up premiums by removing the market incentives for drugmakers to reduce prices.

This is also an especially important issue for me as an Asian American. According to the Department of Health and Human Services, Asian Americans are 40% more likely to be diagnosed with diabetes than non-Hispanic Whites.

Indeed, diabetes runs in my family. My dad died young, at the age of 61, due to complications of diabetes. My parents grew up at a time when nutrition education was scarce. And with rice being a staple in our diets, diabetes is an epidemic among Asians. But we don’t need to compound that problem with another problem: government interference stifling the very medical innovation we need to treat the disease.

Instead of driving us toward poorly run government health care, lawmakers should be offering a full range of proven, market-based solutions to make health care more affordable such as removing unnecessary regulations that have prevented more affordable biosimilar medicines from entering the market.

As of now, as many as six more insulin products await approval from the Food and Drug Administration in the next few years. When these come to market, they would provide more competition and drive down prices. But a price cap would freeze insulin prices at their current high instead of letting the market reduce prices.

Congress should at the same time clamp down on practices that stifle competition and drive up costs. For example, drug manufacturers often apply for patent after patent to keep competitors out of the market. This is called a “patent thicket,” and, like a thicket, it is difficult and painful to penetrate.

One popular insulin product, Lantus, used dozens of patents to provide decades of protection from competition, all while raising prices. When the competing biologic Basaglar was approved, because of competition, costs to the health care system for those drugs combined fell by $3.5 billion, more than 60%, in five years.

Unfortunately, many in Washington are not even waiting to see how these newly approved drugs would bring down costs. They’re trying to use the hammer of government to solve a problem created by bureaucrats. Introducing socialist price controls to cap the cost of insulin would only pass the extra cost burden back onto taxpayers and small businesses in the form of higher premiums.

Further, with history as a guide, Congress would not stop with insulin. It would slowly but surely set controls on everything — including cancer drugs, heart medication, even doctors’ salaries. We could see cost-sharing caps on every element of health care until they’re all “capped,” and we don’t have a market anymore.

Bernie Sanders, chairman of the Senate Health, Education, Labor & Pensions Committee, would love that. He’s in favor of socialized medicine. But we know it doesn’t work, of course. In Canada, there’s a median waiting time of six months between referral from a general practitioner and receipt of medically necessary treatment, and the wait time has increased over the years. Similarly, in Britain, wait times are 10 times as long as they were a decade ago, and that applies not only after referral to a specialist — which on average takes nearly five months — but also to urgent cancer treatment.

I don’t understand why Republicans who recognize the benefits of the free market would ignore them when it comes to something as important as the well-being of Americans. Price caps and overregulation only worsen outcomes. Instead, free and open competition is the best way to truly drive down prices for insulin, for other medications, and for health care in general.

• Marc Ang is an estate and financial planner at Mangus Finance and president of Asian Industry B2B.