State lawmakers want to impose an arbitrary penalty on what they think are “unsupported prescription drug price increases,” which is another way of saying they want to implement price controls. The bill seeking to do that is SB 5020. 

Price controls restrict supply and lead to rationing, so most of the harm created by SB 5020 would fall on patients. The Legislature would also rely on a third party that has used questionable and controversial methodology for determining drug price increases. For that reason, patients who rely on life-changing medication showed up to a public hearing held by the Senate Health and Long Term Care Committee to say that SB 5020 was not the answer. 

Price controls are never the answer, and good intentions shouldn’t be enough to see this legislation through. When you control the price of a product, you control the supply. In this case, we’re talking about controlling the supply of vital medications that sick people want and need.

Competition drives down cost, not price controls or other government regulations that limit innovation. COVID-19 vaccine and Operation Warp Speed showed us that. Private firms create new medicines, and government officials should be eyeing ways to streamline the drug-approval process, modify patent laws, promote investment in pharmaceutical research and encourage price transparency. 

Price transparency was a promising direction in which the Legislature was headed, allowing patients to become more knowledgeable consumers. But as Sen. Ron Muzzall (R-Oak Harbor) noted before voting “no” on SB 5020 in a committee hearing Friday, the state’s Health Care Authority failed to give lawmakers a report on drug transparency pricing that was due last spring. The report on drug pricing would have helped lawmakers make better, more-educated decisions related to health care policy. 

“Had we had this information, we wouldn’t even be having to go through this,” Muzzall said. 

Drug pricing is overly complex. Manufacturers do not set the final price of their drugs, and there are numerous transactions and multiple layers built into the system before drugs reach patients. Insurance companies, pharmaceutical benefit managers, employers and retail pharmacies all contribute to the high prices patients actually pay. Adding more layers and regulations won’t fix the problems ailing drug affordability. 

Creating more direct access between supplier and consumer could help affordability. Forcing drug manufacturers to compete on both quality and price also could lower patient costs, just as competition has lowered the price of computers, cell phones and food. After all, aspirin and penicillin were once miracle drugs. Now they are common and low-cost. 

Nobel economist Milton Friedman once said, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” This legislation is not patient centered, despite its intentions, and would hurt patient access to medicines. SB 5020 will bring our state’s patients bad results.