By Chris Woodward
Senator Ron Wyden (D-Oregon) wants to cap seniors' drug costs in Medicare Part D, but not everyone sees positives to that plan.
Senator Wyden has suggested that prescription drugs cannot increase in price any faster than the rate of inflation, but Merrill Matthews, Ph.D., of the Institute for Policy Innovation says inflation has actually been very low.
"This is just basically a price control, which tends to be the Democrats' fallback mechanism on trying to control spending on anything ... and price controls just never work," says Matthews. "You either get people being rationed from whatever the price control is hitting, or they find alternative ways to go around to get what they want at some kind of affordable price."
If a drug company raises prices faster than inflation, then they have to pay a penalty. That, says Matthews would undermine innovation.
"Developing a new drug is risky and expensive," he explains in a Townhall op-ed. "It costs about $1.7 billion out of pocket to bring a new drug to market, and only a handful of drugs actually make it through the clinical trials."
While he agrees that lowering the cost of prescription drugs for America's seniors is a noble goal, Matthews believes there are ways to do this without depriving patients of future cures.
"Medicare Part D is unique among entitlement programs," says Matthews. "What has made Part D so successful is private sector competition."