PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Small Business Advocate Reminds Senate Finance Committee: Price Controls Do Not Work

By at 16 March, 2022, 9:54 am

NEWS

For Immediate Release

Washington, D.C. – Today, the Senate Finance Committee is holding a hearing on prescription drug prices and possible solutions to lower costs, including price controls. Small Business & Entrepreneurship Council (SBE Council) president Karen Kerrigan issued the following statement about possible legislative efforts to impose price controls on this critical American sector:

“Some members of Congress continue to believe that they can alter basic economic principles – and the proven history – of government price controls. No matter how they’ve been attempted and applied, the same distortions have occurred: dampened economic activity, entry and investment; shortages; and less innovation. The same outcome will occur if Congress imposes price controls on drugs. Price controls will undermine the production of new and improved drugs, medicines and vaccines. They will limit access to life-saving drugs for many, and damage U.S. innovative leadership in this critical sector. The health of U.S. consumers and lives are at stake.

“Moreover, the small firms that dominate the bio-pharmaceutical industry – the very firms that drive competition and innovation – will be immeasurably damaged by price controls. Approximately 79% of these companies have fewer than 100 employees, and they count on vast sums of outside capital investment to bring their innovative drugs to market, which takes extraordinary risk and time. Price controls will kill this investment and risk-taking, as they greatly reduce core risk-taking incentives. Our economy, and the health of millions of Americans, simply cannot afford the damage that price controls would inflict on our bio-pharmaceutical ecosystem, which is dominated by small to mid-size businesses.

“America’s small business owners and entrepreneurs want Congress to focus on their key pain points, such as inflation and high gas prices, broken supply chains, labor shortages and lowering health insurance costs. Our polling finds they want policies that support their ability to offer more health insurance options – not government interventions that restrict options and raise costs. Small business owners want Congress to focus on reducing the overall cost of healthcare rather than focusing just on drug pricing. In one of our recent surveys, 90% say that continued research and innovation is vital to the country’s prosperity, and that policies should be anticipating and encouraging the need for research and development of new treatments and medicines. Price controls will undercut and discourage this needed activity.

“As employers, consumers of innovative drugs, and as entrepreneurs and risk-takers in this industry, Congress must heed the concerns and wisdom of small business owners as certain Members continue to toy with the perilous idea of price controls. The focus should be on encouraging investment and innovation by all American industries, including the bio-pharmaceutical industry, not on harming productive private-sector activity.”

CONTACT:

Karen Kerrigan: kkerrigan@sbecouncil.org

Raymond Keating: rkeating@sbecouncil.org  

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For 28 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

###

 

News and Media Releases