With a new Democratic majority in the House pledging to address the rising cost of health care — including prescription drugs — a fundamental question arises: Will lawmakers focus on the real issues that can drain a family’s finances, or simply adopt extreme policies that fail to take on the underlying problems in our health care system?
As policy professionals from different sides of the aisle, we believe there is a right way to address these issues and a wrong way. The right way will reduce out-of-pocket costs for Americans, improve access to new medicines, and allow the United States to remain the global leader in medical innovation. The wrong way leads to price controls, weakened intellectual property protections, and restricted access to medicines, not to mention stifling innovation and doing little to make drugs more affordable.
Judging from the current state of the drug-pricing debate, we are concerned that policymakers will adopt the wrong approach.
Take Medicare, for example. Leading politicians are calling on the government to directly “negotiate” drugs prices under Medicare’s prescription drug program. But the Congressional Budget Office has concluded that this proposal won’t lower prices unless the government also restricts access to new medical breakthroughs.
Denying patients access to the medicines they need has never been popular. One proposal would give Medicare the power to directly negotiate drug prices. When the government doesn’t get the price its demands, federal bureaucrats would have the power to seize the drug developer’s intellectual property rights and give them to their competitors.
It gets worse. Another proposal would void the intellectual property of any drug with a price that exceeds the artificially low price controls set by foreign countries with socialized health care. This pricing scheme would apply to any medicine or treatment sold within the U.S. health care system, not just those provided through Medicare.
These ideas, known as compulsory licensing and international reference pricing, are counterproductive and antithetical to the best interests of patients. They fail the key test that any drug pricing proposal should have to pass: Are people who suffer from disease better off?
The United States develops more new medicines than the rest of the world combined precisely because we reject government price controls and assaults on intellectual property. Instead, our policies provide incentives for biomedical discovery through temporary market protection for innovators followed by generic competition.
This social compact works for all Americans — boosting our innovation economy, accelerating access to innovative treatments, and creating the most robust marketplace for cheaper generic medicines in the developed world.
If we go down the path of government control, we will destroy the delicate balance between innovation and competition. It costs on average $2.6 billion for each drug that successfully makes it to market, and more than 90 percent of clinical programs for new drugs ultimately fail. Further, more than 70 percent of drug development programs are being led by small biotechnology companies, which rely heavily on private-sector investments over a decade or more.
If forced to confront price controls and compulsory licensing, investors will put their money in the latest gadget rather than the next miracle cure. And if America targets its own innovators for such treatment, we can be sure that other countries would eagerly do the same for their innovators. The result? The number of new cures and treatments would be cut dramatically, which is bad news for the tens of millions of people who currently lack effective treatments.
That is a heavy price to pay when there is little evidence that compulsory licensing actually works. Indeed, there is no guarantee that any company receiving such a license would sell its copycat product for less, or that any savings would flow to patients. And what hasn’t been discussed is that when the government seizes property, it must pay reasonable compensation for it, creating a potentially significant liability for taxpayers.
The midterm election would be a missed opportunity if Congress fails to provide real relief to vulnerable patients and seniors. They and their families are too smart to accept a flawed bargain of potentially lower drug list prices in exchange for denial of robust access to the medicines they need today — and fewer new medicines tomorrow.
Rather than pursuing policies that will destroy innovation and harm patients, we need to adopt responsible reforms that make a meaningful difference in the lives of all patients by reducing their out-of-pocket expenses for prescription drugs and improving access to innovative medicines. There are numerous ideas available to help do just that, such as removing regulatory barriers to value-based pricing and capping what seniors must pay for medicines in Medicare.
We know what the right approach is for lowering prescription drug costs. All we need is for our elected policymakers to take it.
Jim Greenwood is president and CEO of the Biotechnology Innovation Organization. He represented Pennsylvania’s 8th Congressional District in the U.S. House of Representatives from 1993 to 2005. David Beier is managing director of Bay City Capital, a venture capital firm investing in life science companies. He previously served as a senior policy adviser for the Clinton administration and counsel to the U.S. House of Representatives Committee on the Judiciary.
We have had 20 years of deregulation , fake news, and deceptive advertising. The Pharmaceutical industry continues to repackage tax payer funded research, and lie about the origin of their discoveries. The put industry insiders on regulatory boards, lie and mislead consumers and patients, and break the law. the only Solution is Universal Healthcare. Pharma companies that break the law, routinely should be nationalized. They have taken advantage of the public, privatized government research, and paid insiders like this one to misreport the facts.
We are so entrenched with lies, that publishing nonsense like this sounds legitimate. We created a criminal organization much more pernicious than the Mafia!
The data presented in this opinion is heavily biased and fake news. It does NOT cost $2.6 billion to develop every new drug that comes to market (this is highly controversial and funded by the Pharma-back Tuft’s institute without disclosing which specific drugs are included). Also, patients suffering from disease are LESS better off by paying high prices for prescription drugs. It’s not just out of pocket costs, but insurance premiums, and income taxes that we all pay that go towards the cost, development, and basic science and clinical research that brings prescription drugs to market. If the readers new the sneaky schemes that Pharmaceutical companies play in order to ensure they sell their drugs for high dollar in the US, you would be shocked. Look up “Pay for Delay deals” and “Evergreening”. The author provides empty threats to scare sick patients.
This article was useless. The Bayh-Dole act of 1980 needs to be repealed and reimagined. Any invention, drug, device created originally with federal funds should remain partially owned by the federal government (like an early-seed investor & this money put back into basic health research (diet, supplements, exercise) which has no market potential) and prices should be subject to a maximum profit provision, where the US consumers are sold the drug at the cheapest rate. Also, patents need more limits in general (time and what constitutes a new drug). It is too easy to patent a drug for a minor change and jack up the prices. We should create nonprofits to produce generic drugs for reasonable prices.
So big pharma doesn’t want Medicare to be able to negotiate lower prices for their drugs? Shocking.
I agree with you 100%. What good are new drugs if people can’t afford to buy them without bankrupting themselves and their families. These super wealthy and healthy just don’t get it.
Same old claptrap from a Full-Time Lobbyist and a major Big Pharma investor. Who are they kidding? ALL they care about is Big Pharma Profits, and keeping those product margins at 95%+. Paid Liars. And wealthy ones, at that.
IN THIS SUPPOSEDLY TECHNOLOGICAL ERA AND TWENTY FIRST CENTURY IT IS FRUSTRATING .AMAZING AND CURIOUS AS TO ALL OF THESE DEBATES ON THE OVER ALL HEALTH INDUSTRY OR SYSTEM IN THE UNITED STATES OF AMERICA ,PRIMARILY . AND GLOBALLY YET STILL THE UNITED STATES OF AMERICA .DUE TO THE FACT OF THE AMOUNT OF BLOOD FUNDS BEING SPENT YEARLY , . WITH THE RESULTS .GETTING WORSE EVERY YEAR ON .ON LAST YEAR OF 2017 .WE SPENT THREE POINT .FIVE TRILLION DOLLARS ON HEALTH CARE .IN THE .U.S.A THAT IS MORE THAN THE ECONOMY OF FRANCE , AND SEVENTEEN POINT EIGHT PERCENT OF THE GROSS DOMESTIC PRODUCT OF THE UNITED STATES OF AMERICA , . G.D.P . WE ENDED UP WITH EIGHTY THOUSANDS DEAD BODIES FROM THE FLU . THE FLU VACCINE DID NOT WORK . QUOTE UNQUOTE ,THE C.D.C WE HAVE TENS UPON TENS OF THOUSANDS OF OPIOID DEATHS .SEPERATE FROM THE REGULAR PAIN KILLERS . HOSPITALS EMERGENCY ROOMS ESPECIALLY IN NEW YORK CITY ARE DEATH CELLS .WAITING TIME NINE HOURS OR MORE . INFECTIONS FROM SUPER BUGS ., THE REPORT CAME OUT FIVE WEEKS AGO , YOU GET DEMENTIA FROM THESE EMERGENCY ROOMS .WHILE I DO NOT NEED TO RELY ON ANY PUBLICATIONS .THE NEW YORK DAILY NEWS CARRIED THREE [3] ARTICLES DURING THE PAST THREE OR SO MONTHS ABOUT THE MONTEFIORE HOSPITALS EMERGENCY ROOMS IN .N.Y C. THE PAIN KILLERS AND PATENT ARE NULL ,VOID .OVER USED . AND EXPIRED . THE THREE EMPIRES THAT OPERATE OR RUN THE HEALTH CONGLOMORATE IN THIS NATION ARE THE PHARMACEUTICAL EMPIRES .THE CHAIN HOSPITALS ,AND THE BRIBED DRUG DEALERS DOCTORS IN WHITE COATS . DONT WE KNOW THESE .LOOK AT JOHNSON AND JOHNSON ,THEY BRIBED DOCTORS IN SWEDEN ELEVEN YEARS AGO . THEY ONLY PAID .SEVENTY MILLION DOLLARS IT IS NOT A CRIMINAL CHARGE THERE AS ALSO IN THE U.S .,A .IN THE YEAR 2014 JOHNSON AND JOHNSON , HAD TO RECALLED .FORTY NINE PRODUCTS OVER THE COUNTER IN STORES . , CHILDREN TYLONOL TWICE .THE CEO WAS CALLED TO CONGREESS HE RESIGNED AFTER . THE TWO MEN IN CHARGE OF THE MCNEAL DIVISION THAT PRODUCES MOST OF THE OVER THE COUNTER PRODUCTS ALSO RESIGNED . ONLY A FEW WEEKS AGO TWELVE JURIES OF OUR PAIRS IN A COURT IN SAINT LOUIS FOUND JOHNSON AND JOHNSON ,TO BE LIABLE AND RESPONSIBLE FOR TWENTY TWO .FEMALE PATIENTS WHO WERE BEING TREATED WITH THE BABY POWDER DRUG ., THEY ORDER JOHNSON AND JOHNSON TO PAY TO MEMBERS OF THESE DEAD FAMILIES FOUR POINT SIX BILLION DOLLARS . .YESTERDAY AFTER A FEDERAL JUDGE HEARD THEIR APPEAL HE UPHELD THE JURIES VERDICT . THE REUTERS NEWS PAPER REPORTED ON FRIDAY .DECEMBER , 14, 2018 THAT JOHNSON AND JOHNSON WAS AWARE FOR MORE THAT SEVENTEEN [17] YEARS THAT THIS BABY POWDER CONTAINED ASBESTOS , I HAVE MY TRANSCRIPTS IN MY LIBRARY.YET STILL JOHNSON AND JOHNSON ON SATURDAY . DECEMBER,15 TO TODAY THURSDAY .DECEMBER,2018 JOHNSON AND JOHNSON IS STILL CARRYING ADVERTISEMENTS IN PAPERS SUCH AS THE NEW YORK TIMES , THE WALL STREET JOURNAL AND OTHERS THAT THEIR PRODUCT IS SAFE AND APPROPRIATE TO USE ., PLEASE ,READ THE WALL STREET JOURNAL?S TRANSCRIPT ON THE MERCK .,VIOXX KILLER MACHINE OF BETWEEN THREE HUNDRED TO FIVE HUNDRED THOUSANDS ,DEATHS THAT VIOXX .KILLED AND HOW MERCK ALL ALONG THE WAY KEPT DENING THE WAR MACHINE VIOXX. DO I NEED TO SAY MORE .I DO NOT GO TO HOSPITALS .DOCTORS ,NOR TAKE MEDICATIONS . AS I A READY AND WILLING TO DIE NATURALLY WITHOUT THESE THREE .KILLING I . THE REPORT CAME OUT A FEW WEEKS AGO THAT FOR PROFIT NURSING HOMES WHEN THEY KNOW YOU ARE GOING TO DIE BETWEEN FIVE TO SEVEN DAYS THEY GIVE TO YOU MORE EXPENSIVE TREATMENTS .SO TO SPEAK . PLOS THE LIBRARY OF SCIENCE CARRIED THE REPORT DEPENDING ON WHICH HOSPITAL YOU GO TO YOU ARE THREE [3] TIMES LIKELY TO DIE .YOU DO NOT NEED TO ATTEND A IVY LEAGUE UNIVERSITY .,TO BE AWARE OF THIS AND MORE . WHEN YOU DIE IN HOSPITAL THE .C.D.C ALLOWS AND PERMITS THESE HOSPITALS TO ELIMINATE AND OR EXCLUDE SOME OF THE CAUSES AND OR REASONS AS TO WHY YOU DIE . SO THAT THEY WILL ESCAPE AND AVOID LAW SUITS FOR MALPRACTICES. SEE ,THE NEW YORK TIMES .,SCIENCE TIMES .MORE TO COME , TREVOR MERCHANT .BRONX .NEW YORK CITY, THURSDAY . ,DECEMBER , 2018. AT 4. 51 P.M . EASTERN STANDARD TIME .N.Y .C
Focusing solely on patients’ out-of-pocket expenses rather that the total cost of each drug does make economic sense. If everyone could buy a Mercedes with a low ‘out-of-pocket’ expense, who is going to pay the rest of the cost of the Mercedes? Regarding medical innovation, what percentage new drugs and treatments are funded by taxpayer-supported universities and the NIH? Also, restricting access to medical breakthroughs for Medicare is not an unwise policy until the newer treatment is compared in both costs and efficacy to existing therapies by a scientific group not paid by the PhRMA industry; this assures that monies are spent wisely. Finally, reference pricing seems foreign to Americans, but is a useful tool to assure that only proven innovator drugs are paid a premium. If a new drug does not demonstrate clinical and/or economic advantages vs. existing drugs – why would any payer agree to pay more for it?
This piece spends a lot of time shooting down the “wrong” approaches without going into any detail about the “right” ones.
My thoughts as well.
Another well-written piece elucidating on “We know what the right approach is for lowering prescription drug costs” would be tremendously helpful.
Yes. We need more effort placed on proposals and analysis of what would be better than just on what what won’t work.