Column: SB734 is a prescription for lower-quality care

Price Controls Are Bad Medicine for Vulnerable Americans
by Naomi Lopez and Rafael Fonseca, MD

Senate Bill 734 would establish price controls on cutting-edge drug treatments, making it illegal for any health plan to purchase drug treatments where the price exceeded a government-determined reference price. This would apply to state government programs, as well as all private employer-sponsored health plans that cover Oklahomans. These price controls would be based on drug prices found in Canada, a country that explicitly rations care under its socialized medicine system to keep costs down. Put simply, that system is an innovation-killer — and should Senate Bill 734 become law, Oklahomans will be getting a prescription for lower-quality care.

While it may sound appealing to reduce the cost of prescription drug treatments, this proposal would be doing so at the expense of access to the newest, most effective drug treatments. In Canada, a new treatment cannot be sold for more than other drugs in the same therapeutic class, even if it results in better health care outcomes or avoids other costly interventions like surgery and hospitalization. That means that access to the newest treatments are often delayed for Canadian patients by months or, in some cases, years.

While drug prices are an important concern, the issue of access to needed treatments should not be ignored. The most harmful consequence of Senate Bill 734 will be felt by the most physically and economically vulnerable, because if a price limit is set too low, companies will likely stop selling their innovative treatments in Oklahoma while continuing to make it available in the rest of the country. Patients who can afford to seek treatment in another state or country will do so. Those who do not have the economic means or who are not physically healthy enough to travel will languish.

Oklahomans need to know about and publicly debate whether they want to adopt a drug pricing system that would use foreign governments’ rationing schemes for their care. The United States leads the world in health care innovation, but this dangerous and misguided proposal could mean delays or a complete lack of access to the most promising treatments — relegating the state’s four million people to second-class healthcare.

Rafael Fonseca, MD, is a visiting fellow in Healthcare Policy, and Naomi Lopez is the director of Healthcare Policy, at the Goldwater Institute. Fonseca and Lopez are co-authors of the recent Goldwater Institute paper Deciding What a Life is Worth: The Top Three Things Lawmakers Need to Know About QALYs.

Blogger's note: this measure will likely come up for vote in the State Senate this week. You can use this link to find and contact your senator on this or any other issue.