Dragging doesn't seem to work. Can't extend clips, drag clips etc. Has anyone had this issue?

You may want to try re-setting preferences. Also please try another mouse.

Here’s how to reset Preferences: 

• Close and completely quit Premiere Pro (Command + Q on Mac or Control + Q on Windows).

• Press and hold the Shift key on your keyboard while clicking the Premiere Pro icon to open it.

• Keep holding Shift until the Reset options dialog box appears.

• Check the box for Reset app preferences (you can also select options like clearing media cache or plugin caches if needed).

• Click Continue or OK to launch Premiere with fresh defaults. 

It would help to know how large your project file is and how long your timeline is.

The next time the issue occurs, try the following:

1. Create a new project and check whether the same issue appears there.
2. If it doesn't, return to the original project and see if the issue persists.

This will help determine whether the issue is system related or project related.

​@Mystic_worker1ddb:

I have not experienced this, but if I did I would immediately try using “Disable third-party plugins (one time only)” in the Reset Options and then edit for at least as long as it usually take for the issue to present itself.
https://helpx.adobe.com/premiere/desktop/troubleshooting/preferences-and-settings-issues/reset-preferences-at-launch.html

Plugins can cause an issue simply by loading - they do not need to be applied to anything.  While issues with plugins frequently result in a crash, sometimes it’s just unexpected application behaviors.

If the issue goes away with third-party plugins disabled, I’d then use Effects Manager to figure out which effect is causing the issue.
https://helpx.adobe.com/premiere/desktop/add-video-effects/apply-video-effects/manage-effects-and-plug-ins.html