If you remember the old program “Hee Haw”, you probably remember the line “If it weren’t for bad luck, I’d have no luck at all.”

It seems to me that if Congress didn’t have have unconstitutional bills to write, they’d write nothing at all, which wouldn’t bother me in the least.  The latest example of agony that some in Congress want to foist on the American People is Senator Warren’s bill S3775 “To amend the Public Health Service Act to establish an Office of Drug Manufacturing.”  This bill would add to the “Public Health Service Act  (42 U.S.C. 241)” an “Office of Drug Manufacturing”.  In other words, it would place the federal government in the business of manufacturing drugs.  What is the purpose of this new proposed government “program”?

(2) PURPOSE.—The purpose of the Office is—

“(A) to increase competition, lower prices, and address shortages in the market for prescription drugs, including insulin;

“(B) to reduce the cost of prescription drugs to Federal and State health programs, taxpayers, and consumers; and

“(C) to increase patient access to affordable drugs.

Once again, we see the federal government coming up with another unconstitutional bureaucracy as a solution to a problem they’ve created in the first place.  We could spend days discussing the fallacy of government programs increasing competition, lowering prices, addressing shortages, reducing costs, and increasing access.  A quick look at recent history shows that any time a government entity steps into a market their impact is exactly the opposite.  They eliminate competition through taxpayer subsidy, increase prices, costs, and shortages, while at the same time decreasing access.  But this is The Constitution Study, so let’s look at the constitutional aspects of this disaster in the making.

The Fed Is Becoming a Business

As is necessary, we need to start at the beginning.  There is absolutely no authority in the Constitution for the federal government to “get into business”.  This bill does not regulate commerce, it creates a new business called the Federal Office of Drug Manufacturing.  That alone should be enough to get this crazy idea shut down, but it’s not.  This new office would license the manufacturing of drugs, and sell them at a “fair price”.  I’m not sure even today’s twisted interpretation of the “General Welfare” clause could be stretched to include a federal business.

“Fair Price”

Does anyone else find it strange that while this new office is required to sell drugs at a “fair price”, that term is never actually defined?  Webster’s 1828 Dictionary defines fair as “Equitable“.  So what is an “equitable price”?  Again, Webster’s 1828 Dictionary defines equitable as “Equal in regard to the rights of persons; impartial“.  So what must be considered to determine what is the equitable and fair price for drugs?  Why the cost to the manufacturer and the cost to the consumer.  However, the purpose of this legislation is to lower the price of drugs.  Do you think anyone in Congress knows what it costs to manufacture drugs today?  The cost to develop and get approval for them, to manufacture and distribute them, and to comply with all the state and federal regulations that drive up the cost and restrict access to them?  And when this federal agency sets a politically determined price which does not cover those costs, will anyone be surprised when they demand the American taxpayer make up the difference?  How is that fair or equitable?

The Market

Once the federal government uses not only its ability to tax, but to borrow and print money to subsidize this new federal agency, what will that do to the market?  Do you think it will increase competition when one manufacturer gets to set the rules for all the others?  We hear howls of complaint when a company does it’s job so well others can’t compete.  Yet here we have a government creating itself as a monopoly and (almost) everyone cheers.

(i) IN GENERAL.—The Office shall manufacture, or enter into contracts with entities to manufacture, an active pharmaceutical ingredient if—

“(I) the Office determines that such ingredient is not readily available from existing suppliers;

“(II) the manufacture of such ingredient would improve the ability of other entities to enter the market for the manufacture of generic drugs or otherwise expand the manufacture of generic drugs; or

“(III) the manufacture of such ingredient is necessary for the Office to carry out its duties under this section.

The bill talks about improving competition, but here we see drugs that are not readily available or not available in generic form will be created by the government.  Never is the question asked: Why are those drugs not readily available?  Why are generic versions not being manufactured?  Could it be that the federally created costs of bringing a drug to market makes them unprofitable?  Has the federal government, to compensate drug manufacturers for the enormous cost increases regulations cause, also extended the length of the patents that are issued, prohibiting the creation of generic versions?  So now the American taxpayer will be funding the manufacture of drugs not only to put drug companies out of business, but to produce drugs with little if any benefit or ability to recoup their costs.

Accountability

(1) IN GENERAL.—The Secretary shall sell a drug produced under this section at a fair price to other entities. Amounts received from the sale of such drugs shall be used for the activities of the Office.

Any proceeds from the sale of these drugs will be used to help defer the costs of this new office.  But where is Congressional oversight?  By removing an executive agency from the appropriations process, Congress removes them from their oversight and relinquishes the greatest leverage they have, that of the purse.  I find it amazing how someone who rails about what the current President is doing wishes to give him even more power not only by distorting and controlling critical markets, but with a funding mechanism outside of legislative control.

Taxpayer Funded

(f) Authorization Of Appropriations.—There are authorized to be appropriated such sums as may be necessary to carry out this section.

Now we see how this plan to lower prices will actually work.  The costs of these drugs will not be reduced.  If history shows us anything, they will skyrocket as another layer of bureaucracy, manipulation, and greed is added to the process.  Then these costs will be transferred from the consumer to the American taxpayer.  So now, Joe and Jane American will be paying for part, and in some cases all, of people’s drugs.  This is not based on a fair market, but on one manipulated by political agendas rather than economic ones.

Conclusion

So what really happens as the federal government takes over the drug market?  Who will create the new wonder drugs that save and improve so many of our lives today?  How will drug companies pay the enormous costs imposed by the federal government to develop and get approval for new drugs?  What happens when that same government that increases the cost of developing new drugs is manipulating the market to take away the profits drug companies need to fund the research and development for them?  How will your life be when you have to go through a process like the DMV or the VA to get the drugs you need?  What will you do when it’s a federal bureaucrat who determines if the drug you need to live can be manufactured at a “fair price” or not?

The fact that a member of Congress has the chutzpah to propose such legislation shows how little the American people are willing to hold their elected representatives accountable.  We know so little about the Constitution we don’t even see the red flags of tyranny and subjugation when those we elect to represent us wave them in our faces.  Americans should be up in arms at even the suggestion of such an illegal and immoral proposal, yet I hear almost nothing.  Have we already succumbed to an authoritarian government?  Has the idea of freedom and liberty been lost to all but a few?  Have we learned nothing over the last decade of what happens when government takes control over things for which they have no authority?  As much as I fear a government that will take whatever it wants, I fear a citizenry that will let them even more.