February 11, 2020

Senate Ways and Means Committee
Washington State Senate
Olympia, WA 98504-0466

Dear Senator,

Today, the Senate Ways and Means Committee is scheduled to hear SB 6088, Establishing a Prescription Drug Affordability Board Act.  On behalf of the Council for Citizens Against Government Waste’s (CCAGW) 49,594 members and supporters in Washington, I ask that you oppose this bill.

SB 6088 would create a socialistic-style healthcare rationing board, like the National Institute for Health and Care Excellence (NICE), which is part of England’s National Health Service.  NICE is not very nice as it routinely denies and delays innovative medicines to its citizens.  An October 28, 2018 Wall Street Journal editorial noted that from 2011 to 2018, of the 74 new cancer drugs launched in the world, 95 percent were available in the United States compared to 74 percent in the U.K., 49 percent in Japan, and 8 percent in Greece.  While countries with socialized medicine save money by using price controls and rationing, they pay for with less access to innovative products, lost productivity, and more deaths.

SB 6088 is also a price-control bill that relies on a faulty premise, the wholesale acquisition cost, which is essentially the list price, to determine if a drug’s price is affordable and should be investigated.  It is a fishing expedition that gives the Prescription Drug Affordability Board extensive discretion on obtaining and utilizing proprietary information to determine an “appropriate” drug price.  If this information is disclosed, it could be damaging to negotiations among drug manufacturers, insurers, pharmacy benefit managers, and druggists.  A 2015 Federal Trade Commission paper, “Price transparency or TMI?,” pointed out that “transparency is not universally good.  When it goes too far, it can actually harm competition and consumers … We are especially concerned when information disclosures allow competitors to figure out what their rivals are charging, which dampens each competitor’s incentive to offer a low price, or increases the likelihood that they can coordinate on higher prices.”

CCAGW understands your concern over pharmaceutical prices, but price controls, rationing, and bypassing the nation’s safe, albeit closed, pharmaceutical distribution system will not be beneficial to patients or taxpayers.  We ask the Washington legislature to join us in calling for a free-market approach in lowering drug costs.  This includes faster Food and Drug Administration generic drug approvals, encouraging more “me-too” drugs, which provide competition among innovative drugs still under patent, and asking the Trump administration and Congress to write and pass better trade deals that protect biopharmaceutical intellectual property and require our trading partners to contribute to U.S.-funded biomedical research and development.

We again urge you to oppose SB 6088.

Sincerely,

Tom Schatz
President, CCAGW

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