WASHINGTON — Democratic lawmakers in recent weeks have begun to advance an argument long seen as something of a third rail in U.S. politics: that slightly less biomedical innovation might be worth a dramatic reduction in drug prices.

The surprising candor has come amid pushback to House Speaker Nancy Pelosi’s high-profile drug pricing bill, which the trade group PhRMA this month said represented “nuclear winter” for the development of new medicines. Some Democrats, in response, have attempted to reframe the discussion in purely utilitarian terms, asserting that dramatically lower costs now justify a marginal reduction in new treatments in the coming decades.

Unlock this article by subscribing to STAT Plus and enjoy your first 30 days free!

GET STARTED

What is it?

STAT Plus is STAT's premium subscription service for in-depth biotech, pharma, policy, and life science coverage and analysis. Our award-winning team covers news on Wall Street, policy developments in Washington, early science breakthroughs and clinical trial results, and health care disruption in Silicon Valley and beyond.

What's included?

  • Daily reporting and analysis
  • The most comprehensive industry coverage from a powerhouse team of reporters
  • Subscriber-only newsletters
  • Daily newsletters to brief you on the most important industry news of the day
  • Online intelligence briefings
  • Frequent opportunities to engage with veteran beat reporters and industry experts
  • Exclusive industry events
  • Premium access to subscriber-only networking events around the country
  • The best reporters in the industry
  • The most trusted and well-connected newsroom in the health care industry
  • And much more
  • Exclusive interviews with industry leaders, profiles, and premium tools, like our CRISPR Trackr.

Leave a Comment

Please enter your name.
Please enter a comment.

  • Russ, you asked what kind of insulin. Don’t know what you mean by “digital” but the best insullins (i.e. most effective, reliable – meaning few surprises of when it his=ts your blood system) are “analogs”. The Walmart insulin is very old-school, the timing of when it hits is unreliable, and you an’t always plan the insulin injection around when the food hits your system. So dangerous high bg’s and perhaps even fatal low blood sugars are difficult at best to avoid. And no, it isn’t some democrat fake news story. I have receipts from the mid-90’s when these “new” insulins came on the market – retail price $25 a vial. A receipt from 2012 had a retail price of $90 a vial, 2016 $455 a vial. This medication keeps people with type 1 (formerly juvenile ) diabetes alive.

    Access to affordable insulin means I can continue to work (and pay taxes and stay off public assistance), support my family, contribute to my local economy and avoid the complications of consistently high blood sugar – amputations, loss of sight, kidney failure. Those complications would result in being u=on public assistance until I die a horrible death. Usually over time, manufacture of a product gets lower in cost over time – not Rx’s. And because I need it to stay alive, I have no choice. The Walmart insulins with their action times make it close to impossible for people with type 1 diabetes to hold down jobs.

    • I presented the facts here. STATnews erased them.

      There are two kinds of insulin, yes, I was correct. That NEVER gets reported. So, the problems will NEVER get fixed.

  • “Other lawmakers, however, rejected the suggestion that price reductions would result in less innovation, arguing that companies can and should reduce non-research spending perceived as excessive before cutting into their drug development endeavors.”

    GOOD. The argument that price controls will result in less innovation that gets regurgitated by PhRMA spox and others is a false equivalence in the first place. Not only do pharma companies not pay for basic science research, but they’ve also been cooking the numbers on the costs of drug development for decades. While there have been a few moderate voices within the industry calling for it to regulate itself, shareholder-based capitalism and management ensure that the industry is going to have to learn the hard way that, yes, you can indeed still be quite profitable without increasing the prices of drugs–including generics–at multiples of the rate of inflation year over year.

  • Drugs are not compared to each other before coming on the market. They are just approved if they are deemed to be effective. That would be one first step control the proliferation of drugs, esp when it comes to generics.

  • Granted, I am only well-versed in access to insulin. But when I reviewed Eli Lilly’s “for Investors” tab on their webpage, I saw in their financials that they spend more (or budget more anyway) for admin and marketing than R & D. I wish I could remember the Pharma Exec’s name who said they were in the business of making their shareholders happy, not curing patients (sic). From what I can see, most of the $ for R & D comes from NIH and labor is provided by universities.

    • A large amount of the innovation today takes place in small start-ups, which, if successful, end up being acquired by larger companies. Most of these acquisitions will not show up as R & D on the balance sheets of the large companies. However, the large companies benefit from ideas validated by the smaller companies and indirectly pay the price. The financials do not tell the whole story when you understand how things are connected.

  • I must have got capitalism all wrong. Wasn’t competition, and not overpricing drugs, that should drive innovation? On the other hand, competition should drive prices down, and that clearly isn’t the case either.
    It seems that all the alleged virtues of the capitalistic model are just a total lie! Who knew?

    • Competition does drive drug prices down.
      After the patent expiry. These products called generics are often cheaper in the US than in Europe. Well, innovative drugs covered by patents are very expensive. Until the patent lasts.
      nder patent coverage

    • @Zsolt your argument doesn’t make any actual sense. And the out of patent drug Daraprim, whose price was hiked 56 times must be the kind of saving you are referring to. But, whatever floats your boat.
      BTW, in “socialist” Europe they sell generics too. And unlike in the US, companies are not allowed to extend patents on futile arguments, and pay to delay the marketing of competing generics.
      Ignorance truly is bliss

  • Americans cannot foot the entire bill for innovation for the entire world. It is unfair and won’t work in the long run. The rest of the world gets to enjoy all of the new medicines that get developed while not having to pay full price because America gets dumped on by pharma for cost recovery since there are almost no price controls. It is time the rest of the world forks over money for innovation fairly. It is killing our citizens while everyone else in the world gets their medications at our expense. That is not fair at all. Maybe the world will have to come to an agreement for equally distributing the cost of innovation once the US finally enacts price controls like virtually every other country. I’m really tired of paying thousands of dollars for a drug just so some guy in Canada, India or the UK can benefit from the same drug that they can obtain under their country’s strict price control.

    Virtually few people have sympathy for the pharmaceutical industry. Half of all so called innovation is pharma switching out formulations with very little improvement in drug efficacy so that they can maintain patent life. Or you have pharma jacking up the prices on old drugs that were bought up by the likes of Skrelli. Or how about the antics of Valeant?

    Regardless, if you want innovation, have the rest of the world pay for their fair share. Enough is enough with the wild wild west in America for drug prices. It is unsustainable.

  • Do the democrats understand basic economics? Donna Shalala, based on her role in the Clinton administration would appear to have the some knowledge of this area but fails to understand basic economic concepts. Her comment was” “I think it actually will reduce me-too drugs,” said Shalala, who served as health secretary under President Bill Clinton. “I think [pharmaceutical companies] are going to clean their portfolios. … I think that they’ll become more efficient.” Does she not understand that having one drug with a monopoly for a given disease is NOT the way to get the lowest prices for patients. What she calls “me too” drugs are additional drugs that compete in the same class. That help keep prices down and force pharma companies to negotiate lower prices for payers.

    • Nice theory, but basic economics clearly is not being applied to pharmaceutical pricing. If you suggest that competition from “me too” drugs helps hold down costs then why is a drug like Humira, which now has close to 10 competitors across it’s different indication still so high priced and why does the price keep going up every year even as newer biologics to treat the same conditions get approved.

      I wish basic economic principles applied, but clearly they don’t. Why is really the question.

    • In terms of “me too”, again my experience is in the insulin market, but the 3 insulin mfrs increase their retail prices in lockstep with one another – it is kinda scary that the price increases are close to exactly the same. We also need to get rid of the Pharmacy Benefit Mgr’s. Why can’t health plans negotiate for formulary position themselves? They have legal depts. Pharma admits to increasing the asking price in anticipation of the negotiation process with PBMs. THing is that inflated price stays as the retail price, making last year’s unaffordable Rx even more out of reach

    • That’s what she’s saying. A natural result of limiting R&D resources will be Pharma companies rethinking their portfolio of pipeline candidates, and in theory spending more time developing big blockbuster drugs with greater potential ROI. To your point though, where I disagree with her is her use of the word “efficient” to describe this reorganization. Me-too drugs serve to compete with existing similar treatments and help drive prices down. Perhaps Pharma will be more efficient in allocating scarcer resources, but certainly not to the patient’s benefit.

      It’s a by-product of this bill that I had never thought of before. It leads me to think that getting something passed in haste, just for the sake of getting something passed, is not what we want. But I do appreciate the urgency, and it’s putting a lot of pressure on the industry to figure this out ASAP

  • I’ve often wondered why we don’t work with Pharma to increase the price of drugs in other countries a little bit, to help offset the reduction of prices in America. The argument addressed in the article shoes that Americans subsidized a large part of the development of many new drugs. Perhaps spreading the burden over more countries would allow Americans to pay lower drug process without having an impact on how many new drugs would be developed.

Your daily dose of news in health and medicine

Privacy Policy