Health Care

Staff | March 10, 2021

Conservative groups announce opposition to price control legislation


Two well-known conservative organizations have publicly voiced strong concern regarding legislation pending in Oklahoma that would tie prescription drug prices in the state to Canadian drug prices.

Americans for Tax Reform, led by conservative leader Grover Norquist, and the American Conservative Union, known for its annual CPAC conference, have announced their opposition to Senate Bill 734.

According to a bill summary prepared by legislative staff, SB 734 would direct the state’s Insurance Commissioner to publish a list of the 250 most costly prescription drugs, with a “reference rate” price for each.

The summary then states that, “The reference rate shall be calculated by the Commissioner by comparing the wholesale acquisition rate to various Canadian Ministries of Health.”

In a piece published last year by the Heritage Foundation, Dr. Peter St. Onge, senior economist at the Montreal Economic Institute, stated, “Canada’s total health costs are about one-third cheaper than the U.S. as a percent of GDP, but this is achieved by undesirable cost-control practices.”

SB 734 is currently pending in the Oklahoma Senate. The deadline for Senate measures to receive a vote by the full Senate is March 11.

Last month, in a letter sent to members of the Senate, Norquist, president of Americans for Tax Reform, wrote that SB 734 “would cap the amount state-regulated commercial insurance plans can pay for prescription drugs at a ‘reference price.’

“If implemented, this bill, which is a price control, would jeopardize innovation in the pharmaceutical industry and result in patients having less access to their medicines.”

Norquist continued, “Currently in the United States, it costs around $2.6 billion and takes approximately 10 years—which includes the six to seven-year clinical trial process the Food and Drug Administration (FDA) requires for drug approval—for a new drug to enter the market.”

In addition, Norquist’s letter stated that “experience from other countries with a more heavy-handed approach to healthcare policy” has “demonstrated that government intervention neither lowers costs nor increases access. Rather, it stifles development, creates shortages, and leads to fewer choices for consumers and patients.”

This week, Senators also received a letter from the American Conservative Union, which operates the annual Conservative Political Action Conference (CPAC), announcing opposition to SB 734.

“We are troubled by the trend at both the federal and state levels,” the letter states, “that rely on socialist pricing schemes—rather than the free market—to reduce the cost of prescription drugs in the United States.

“The American Conservative Union recognizes the importance of a vibrant environment for consumer choice and market competition,” the letter continues. “However, adopting policies of government intrusion into industry practices and standards will not reduce drug prices in the long term.

“Instead, as countless examples from other countries demonstrate, it will greatly reduce access to medicines for our citizens. More importantly, price controls will bring to a halt the innovation that has been a hallmark of America’s pharmaceutical industry.”

The letter also indicated that the group’s sister organization, the American Conservative Union Foundation, would be likely to include SB 734 as a negative vote on its annual scorecard of Oklahoma legislators.


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