Democrats’ price-fixing scheme would kill up to 342 cures, according to a study by the University of Chicago, yet they claim it’s merely a “negotiating” approach that would lower the price of drugs. Now, a Vital Transformation study finds that if drug price controls under consideration in the Senate had been enacted during the last decade, only six of 110 currently approved therapies would have made it to patients.
- Price controls eliminate incentives to innovate: 12 firms studied had invested more than $400 billion in the U.S. pipeline to produce cures and treatments that represent a substantial portion of each firm’s revenue. Half of the companies researched in the study saw a reduction of their net earnings down to a third of what they earned previously, and the average reductions across the entire group were roughly over half what they earned previously.
- Kneecapping American leadership in innovation: The firms studied represent more than half of all global innovative investment.
- Sending American jobs overseas: Democrats’ takeover of this industry will ship investment to China and other competitors overseas. Further, the study estimates the proposed legislation will also likely lead to the loss of over 590,000 U.S. biopharma jobs.
Devastation to Drug Innovation
- Loss of innovation = a death sentence for patients. Looking at CMS drug utilization data from 2016 to 2020 of the types of drugs expected to be most impacted by Democrats’ price fixing, even the most conservative estimates of innovation lost from these policies could have left over 42 million patients without the medicine they needed.
- Surrendering in the fight against cancer: The Council of State Bio Associations writes that socialist drug price controls will get in the way of the fight against cancer: “In oncology alone, the University of Chicago found that price controls would reduce overall annual cancer R&D spending by about $18.1 billion, or 31.8 percent.”
- They continue: “The specter of government price setting threatens to undermine a sector that has created over 1.8 million jobs across all 50 states and that represents a large portion of our nation’s Gross Domestic Product (GDP) – generating an economic output of approximately $2.6 trillion annually.”
- Limiting patients’ access to low-cost medicines: Back in March, medical innovators wrote to Congress that “The untested approach in the House-passed Build Back Better Act (H.R. 5376) does not address these challenges and could in fact harm future savings from generic and biosimilar medicines. The Build Back Better Act’s approach to direct negotiations in Medicare and inflation-based penalties, as passed by the House, would alter the incentive for generic and biosimilar manufacturers to develop new medicines […] and is misguided and would limit patients’ access to low-cost medicines.”