Nearly 400 leaders and funders of small biotechnology companies sent an open letter on September 8, 2021, to lawmakers explaining that drug price controls would halt investment in new drug R&D.
The Senate Finance Committee is working on legislation that would allow the Center for Medicare and Medicaid Services (CMS) to negotiate drug prices with manufacturers based on an international price index of prices paid in several other countries.
“This is not true negotiation,” says the letter.
“Such draconian measures would immediately halt private funding of drug discovery and development,” they explain. “The loss of hundreds of thousands of well-paying jobs would be swift, though it may take longer for the public to sense the loss of future treatments and cures.”
Instead of price controls, these biotech leaders and investors call for containing the cost of prescription drugs without hurting R&D through two strategies:
- Reducing “the amount that insurance plans can make patients pay out-of-pocket” for medicines with new legislation, “just as policymakers have appropriately outlawed discrimination on the basis of pre-existing conditions.”
- Ensuring that more drugs go generic. While the cost of medical treatments rises over time, the cost of drugs eventually drops after drugs go generic, the letter notes. “Certain drugs do not go generic even after their patents have expired, and CMS could save money by solving that particular market failure.”
A recent Congressional Budget Office (CBO) analysis found drug development would suffer under H.R. 3, causing 8% fewer drugs to enter the market each year.