In the waning days before the August recess, Senate Democrats are pushing legislation with anti-science drug price controls, as part of a so-called reconciliation bill.
The legislation could undercut its own goals by depriving drugmakers of incentives for developing blockbuster medicines, plus lower-cost biosimilars and generics, several analysts and industry groups have warned. Predictions are that small, early-stage biotechs would take a “disproportionate” toll, as they are behind the bulk of medical innovation and rely on robust investment climate. The biotech investor community has come out in strong opposition to the proposed legislation.
Several independent reports validate that such measures would reduce the pipeline of innovative new therapeutics and potentially diminish the size and impact of the U.S. biopharmaceutical industry, meaning job and other economic losses.
Every member organization, including MichBio, of the Council of State Bioscience Associations (CSBA) signed a letter last week to House and Senate leadership noting that proposed drug price controls will “devastate” innovation. “Most of our biopharmaceutical member companies are small-to-medium in size and relatively few have products on the market. Yet, these companies are leading the world in cutting-edge research to develop new therapies and cures,” said the CSBA letter.
A new Vital Transformation study (funded by BIO), found proposed price controls would reduce net earnings by as much as 70-100% for some companies, hurting their ability to invest in R&D. Just six of 110 drugs approved from 2012-2021 would have made it to the market if the Senate price controls had been in place. In Michigan alone, the study projects a loss of more than 2300 jobs, or the equivalent of the Pfizer manufacturing facility in Kalamazoo and >$3.3 billion in economic impact.
Another analysis by Avalere of updated Senate drug pricing legislation showed Medicare negotiation could reduce manufacturer revenues by $165 billion in Part D and $290 billion in Part B from 2026 to 2032.
In addition to studies of the American market, experts also point to the impact of price regulations in Japan and Europe that have led to a dramatic reduction of their biopharmaceutical industries, innovation stagnation, regulatory delays, and de-risking of investments.
This is not a “modest proposal.” It disrupts the entire biopharma R&D system and threatens patient access to medicines and future innovations. The hundreds of drugs in development could all stall because of this legislation. That’s why patient advocates and disease organizations across the country are calling for an end to these price-setting proposals.
Take action! Tell your MI representative to oppose government price setting and support innovation for patients!