The drug pricing deal in the Build Back Better Act sounded like welcome news to many. As someone who worked for the previous two administrations as they attempted to lower drug prices, I know how difficult making deals like this can be.
Despite these difficulties, it is incumbent on policymakers to thoroughly understand the potential consequences of legislation. The hastily assembled BBB compromise fails in this regard as it contains significant uncertainties and unintended effects that could distort pharmaceutical markets, reduce the development of new drugs, and threaten patients’ access to medicines.
The bill would allow the Secretary of the Department of Health and Human Services to “negotiate” drug prices with manufacturers. But if a deal is not reached in this “negotiation,” manufacturers are forced to pay an excise tax. That doesn’t sound like negotiation to me.
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