Drug price controls are essential for small businesses
As small businesses across the country buckle up for another possible winter of COVID-19, they suffered an avoidable blow in Washington, D.C., this month on meaningful and much-needed prescription drug reform for their employees. The stalled Build Back Better Act (BBB), which includes key health care and prescription drug reforms small businesses have long been clamoring for, would bring down onerous health care costs, provide relief to consumers, and spur job growth and higher wages for employees on Main Streets across America. But now the bill’s uncertain fate is throwing yet another wrench in the gears for small businesses who are working tirelessly to keep their doors open.
Let’s be clear: small business owners unambiguously want policymakers to act to bring health care and prescription drug costs down. As a medical professional and small business owner, I know the ones suffering right now are the entrepreneurs who have consistently said that lowering drug prices is a top priority—not the large drug manufacturers.
Rising health care costs have been exacerbated by the COVID-19 pandemic, and small business owners already trying to recover from myriad economic challenges are feeling the additional burden. According to Small Business For America’s Future’s most recent survey, small business owners said lowering health care and prescription drug costs is their top priority. And they plan to make their feelings clear at the ballot box. Eighty-three percent say congressional action on prescription drug costs will be important to deciding who to vote for in 2022—58 percent say it is very important.
Recently, Grover Norquist penned an op-ed in this publication painting these proposed reforms as “price controls.” The truth is, Norquist is out of touch with both the reality of the pharmaceutical industry, and the provisions in the BBB. Pharmaceutical industry profits far exceed what companies invest in prescription drug innovation and these reforms are reasonable measures to rein in price gouging. The impacts of this bill coupled with manufacturer’s ability to set launch prices will have virtually no impact on innovation, with the Congressional Budget Office (CBO) reporting the loss of just one new drug in the next decade.
The reform proposals included in the stalled BBB are common-sense measures to combat rising prescription drug costs, such as allowing Medicare to negotiate directly with drug companies, and capping out-of-pocket drug costs for seniors on Medicare. The CBO estimates that price negotiation alone will save hundreds of billions in health care costs and reduce premiums for employment-based insurance. That means small business owners can spend less time navigating and paying for rising drug prices and more time growing their business and creating jobs.
The notion that combating price gouging will cost high-paying American jobs is simply not consistent with reality. In fact, rising health care costs, spearheaded by rising drug costs, have cost the economy jobs and higher wages. These costs limit growth opportunities for businesses, who are forced into difficult decisions because of skyrocketing costs, with small business owners particularly impacted. A Small Business for America’s Future survey from this fall found that more than 2 in 5 small business owners have put off hiring employees and growing their business specifically due to rising health care and drug prices.
Small business owners are the backbone of the nation’s economy—driving economic growth and job creation—and lowering prescription drug costs will allow small business owners to stay competitive with larger corporations and keep more of their hard-earned profits, which will allow them to grow. The prescription drug pricing reforms proposed in BBB are a reasonable and necessary effort to help bring down drug costs — and they are overwhelmingly popular with a large majority of Americans. Congress has an opportunity to pass a wildly popular reform that would help consumers, seniors, and Main Street alike. It’s time to put these interests above large pharmaceutical companies and partisan politics and move quickly to pass long overdue drug reform.
Dr. Erika Gonzalez is the CEO & President of South Texas Allergy and Asthma Medical Professionals (STAAMP) and STAAMP Clinical Research, Chair of the San Antonio Hispanic Chamber of Commerce, and Co-Chair of Small Business for America’s Future.