Elizabeth Hovde of the Washington Policy Center believes Senate Bill 5532 has unintended consequences for Washington residents
Elizabeth Hovde
Washington Policy Center
A piece of legislation to create a five-person, governor-appointed board that could impose price controls on prescription drugs and assess penalties on drug manufacturers was moved forward by the House Health Care and Wellness Committee Wednesday.
Should SB 5532 become law, as appears likely, it could limit Washingtonians’ access to lifesaving drugs. That’s a big unintended consequence.
Telling someone how much they can sell a product for in our state doesn’t bode well for their desire to continue selling in Washington. Imagine the state declaring that the price of iPhones could not exceed $100 here. What if the government decided a Prius could only cost $1,000, so more of us could have them and try to save the planet?
Threatening penalties is a further deal-killer, especially when a manufacturer can sell its product in other states without price controls or penalties. As Rep. Joe Schmick, R-Colfax, said in discussion over the bill Wednesday, we’d be the only state in the nation with public policy like this. “There’s absolutely no track record to success of this in actually driving down prescription costs. So it’s unproven.” He also rightly noted that we should be wary of a board set up to provide accountability that is not accountable itself. An amendment to make the board accountable to legislative oversight failed.
Drug pricing is already overly complex and there are too many middlemen. This bill would add another complication. Further, manufacturers do not control the final price of their drugs: Pharmaceutical drugs are subject to many players and several layers of price increases that are built into the system before drugs reach patients. Insurance companies, pharmaceutical benefit managers, employers and retail pharmacies all contribute to the high prices that patients actually pay. This makes price controls and assessing penalties misguided.
As Sen. Ann Rivers, R-La Center, said in an earlier Senate committee hearing on the bill, “How do we know we’re even punishing the right party here?” She also decried an overdue report the Legislature requested from the state Health Care Authority.
This is feel-good legislation at best. Lawmakers, like everyday citizens, want drugs to be as affordable as possible. But a state-run, price-control board is not going to get us where we want to go. Unintended consequences could take us further from patient-centered health care between doctors and patients and their judgment about which drugs are best for a patient’s needs.
Lawmakers should be looking for competitive ways to improve the drug innovation pipeline, not erecting more barriers. We need fewer regulations, price transparency and fewer middlemen. Throughout our economy, a free market, without third-party interference, limits and regulations, brings a wide range of products and benefits for people to choose from, as well as greater affordability.
Read more concerns about SB 5532 here.
Elizabeth Hovde is a policy analyst and the director of the Centers for Health Care and Worker Rights at the Washington Policy Center. She is a Clark County resident.
