March 31, 2026
Louisiana Senate
Insurance Committee
900 North 3rd Street
Baton Rouge, Louisiana 70804
Dear Senator,
On Wednesday, April 1, 2026, the Senate Insurance Committee will consider SB 401. On behalf of the more than 2,868 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in the state of Louisiana, I urge you to oppose this legislation, which would impose price controls on prescription drugs through the establishment of the Prescription Drug Affordability Board (PDAB).
SB 401 would create a nine-member Prescription Drug Affordability Board charged with reviewing brand-name drugs, biologics, generic drugs, and biosimilars based on increases in production and wholesale acquisition costs. Wholesale costs are essentially list prices and do not represent what a patient will pay at the pharmacy after negotiations have occurred among pharmaceutical companies, insurers, pharmacy benefit managers, and pharmacies to lower out-of-pocket patient costs. Nevertheless, the board would have full authority to set an arbitrary upper payment limit if it is determined that a drug price is “too high.”
Throughout history, price controls have distorted markets, hurt innovation, and exacerbated the problems they were created to fix. SB 401 would cap the amount that commercial insurance plans and pharmacies pay for prescription medicines. Capping prices will restrict access to vital medicines. According to a January 2025 report by the National Community Pharmacists Association, 32.8 percent of independent pharmacists “have already decided not to stock one or more of the drugs listed in the Medicare Drug Price Negotiation” and 60.4 percent of independent pharmacies are considering following suit.
Expanding government control of the Louisiana healthcare system by imposing price controls would also harm patients by stifling the development of new treatments and cures. On average, it takes 10 to 15 years and $2.6 billion to bring a drug from lab to market. Imposing price controls would only exacerbate this costly endeavor by removing incentives for investing in pharmaceutical research and development. A simulation model created by the National Bureau of Economic Research explored the impact of price controls on the U.S. pharmaceutical market. They estimated that cutting prices by 40 to 50 percent in the U.S. will lead to between 30 to 60 percent fewer R&D projects being undertaken (in early-stage development). The lasting effects of price controls on research and development will create an invisible graveyard of patients who will never have access to live-saving medicines that are never developed.
Louisiana legislators should ask their congressional delegation to hold the Food and Drug Administration’s feet to the fire to clear the backlog of generic drugs awaiting approval. This would be a far more effective way to help bring down the price of prescription drugs than to pass this harmful and counterproductive legislation. A permanent market-based solution, not government intrusion, will lower prices. For these reasons, I urge you to oppose SB 401.
Sincerely,
Tom Schatz
President, CCAGW