As a registered Democrat, I admire our state's presidential candidate. But as one of the one million Americans who battle Parkinson's disease, I worry that Sen. Bernie Sanders' well-intentioned plan to cap prescription drug prices will have dangerous, unintended consequences.
Sixty percent of Vermont adults suffer from a chronic disease like cancer or diabetes. Sen. Sanders is right that "people are dying and becoming much sicker because they can't afford the medicines they need." But the blame for high drug bills rests not with pharmaceutical companies, but rather with the insurance companies who slam patients with enormous out-of-pocket expenses.
Cracking down on abusive insurers will make drugs more affordable without damaging medical progress. With the national attention he's now receiving, that's where Sen. Sanders should focus his ire.
In Washington, Sen. Sanders' recently put forward a bill intended to cut drug costs by getting the government to negotiate prices directly with manufacturers for medicines covered under Medicare Part D. The idea is to use the government's buying power to squeeze drug makers: if they want to sell their drugs to Medicare, it will have to be at a price dictated by the government.
This approach raises two big problems, one short-term and the other long-term.
Under the Sen. Sanders' plan, seniors could lose access to medications. In other government healthcare programs, regulators simply refuse to cover expensive medicines.
Need a cutting-edge medicine to treat your chronic disease? Tough luck. You can't get it. And since the government would be negotiating prices on behalf of all Part D plans, switching plans wouldn't solve the problem.
In the long-run, government price controls will dis-incentivize medical research, which in turn will dry up the pipeline of breakthrough treatments to fight serious disease.
Drug prices reflect the huge research and development costs of getting a new breakthrough treatment to patients. According to a recent Tufts University study, it takes $2.6 billion and 10 years, on average, to bring a new medication to market.
Most potentially promising compounds don't even make it to human testing, and of the ones that do, only about 10 percent win final FDA approval. Companies have to cover the R&D costs not only of their successful products, but also of the 90 percent of drugs that fail.
Imposing price caps would make it nearly impossible to recover R&D costs. Investment funding for medical research would dry up. Researchers with the National Bureau of Economic Research estimate that price caps of 40-50 percent would lead to 30-60 percent fewer R&D projects.
Biotech companies are currently researching 37 medicines for people with Parkinson's disease. Government price controls would devastate that research.
While new treatments can be expensive, more effective treatments can actually help control healthcare costs in the long run. Take diabetes, which I developed three years after being diagnosed with Parkinson's. The disease afflicts nearly 30 million Americans and is expensive to treat. Proper diagnosis and medication, however, can cut the cost of care by 48 percent.
Similarly, research by Columbia University economist Frank Lichtenberg shows that an additional $1 of spending on newer prescription drugs can save $6 in overall medical spending, because patients stay healthier and avoid more costly care.
Instead of trying to control drug prices through government force, Sen. Sanders and others concerned about drug affordability should focus on reducing out-of-pocket spending. Over the past decade, my out-of-pocket medical spending for the prescriptions that manage my Parkinson's and diabetes has skyrocketed.
One big reason? For many advanced drugs, insurers have replaced co-pays with co-insurance. So instead of shelling out $10 or $20 at the pharmacy, patients are stuck paying 10 percent or 20 percent of a medicine's cost. This is unconscionable. And it's wreaking financial havoc on patients who depend on advanced medicines.
While out-of-pocket costs soar, so are insurance premiums. Indeed, the consulting company Aon estimates that Americans with health insurance through their employers are paying 52 percent more for coverage than they were just five years ago.
Sen. Sanders' heart is in the right place when it comes to health care. It's too expensive. And the price increases we've come to expect are simply unsustainable.
But Sen. Sanders should focus on improving health insurance, not hammering pharmaceutical researchers. Patients look to laboratories for hope. We need advanced medicines today — and look forward to even better treatments tomorrow.
Make no mistake. Imposing price caps on medicines would immediately reduce access to prescriptions and undermine long-term medical research. Patients won't experience lower healthcare bills until insurers "feel the Bern."