Democrats’ drug price-setting scheme would stifle innovation
Congressional Democrats are pushing a reckless tax-and-spend proposal with a prescription drug price-setting scheme that will create drug shortages and stifle the development of innovative new cures and treatments. Tragically, America’s senior citizens will be hit hardest by this socialist overhaul.
Implementing government price controls regardless of how many improvements a company has made eliminates the ability to recoup those types of investments. This will devastate pharmaceutical innovation across the board, but we can look at drugs used to treat cancer to understand the gravity of this proposal.
Most of the research on cancer medicines is done after the initial approval — nearly 60 percent of oncology medicines approved a decade ago received additional approvals in later years, most of which were seven or more years after approval. For example, Ipilimumab, a drug used to treat melanoma, was first approved by the Food and Drug Administration (FDA) in 2011. But over the next 11 years, the FDA approved it to treat nine additional cancers.
That type of innovation doesn’t just happen by chance. Companies must make costly investments to research and test drugs to identify potential new therapeutic uses. Then, they must prove those uses are safe and effective through three phases of clinical trials. For a drug like Ipilimumab, each of its additional nine uses required a new round of clinical trials and investment. These costs easily climb into the hundreds of millions of dollars.
Drug development has always been risky — the FDA will never approve about 90 percent of drugs entering clinical trials. But in America’s current market-based system, companies have an opportunity to recoup their investment when new drugs and other uses succeed. That’s why more new drugs are developed in the United States than in every other country combined.
Under congressional Democrats’ proposed new drug pricing reform, this is all at risk. According to a study by the University of Chicago, this socialist drug price control will kill up to 342 cures.
But why is this particularly bad for seniors? Because the price controls that are only in Medicare will mean 96 percent of American seniors have less access to innovative medicine. If Democrats’ drug pricing reforms are enacted, American companies will only have incentives to invest in products that don’t depend on Medicare coverage.
Democrats couldn’t have concocted a better plan to shift investment in medicines away from seniors and toward younger, healthier populations if they tried.
Guy Reschenthaler represents Pennsylvania’s 14th District.