WASHINGTON, USA – Speaker Nancy Pelosi’s Lower Drug Costs Now Act of 2019, H.R.3, could result in at least 56 fewer new medicines for patients over ten years, according to a new analysis from economic consulting firm Vital Transformation.
The study examined the impact of foreign reference pricing provisions in H.R.3 on treatments and cures from small, emerging US biotech companies that rely on venture capital to finance their research and development. The analysis was commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Innovation Organization (BIO) and the Council of State Bioscience Associations (CSBA).
According to the analysis, H.R.3 would cut revenues by more than half for companies with affected medicines, leading to a nearly 90 percent reduction in new medicines developed by small US biotech companies. This would have a disproportionate effect on industry work with small biotech companies, forcing hard choices and moving capital away from riskier investments where the science is tougher and economic returns are less certain.
The Congressional Budget Office has estimated that for the entire biopharmaceutical ecosystem, only 8-15 medicines will be stopped from coming to market over the next ten years. However, this study shows that under H.R.3 small, emerging biotech companies alone would bring 56 fewer innovative new medicines to market over the next ten years, down from 64 during the previous decade. After factoring in the full ecosystem of biopharmaceutical innovation, the real impact on patients gaining access to new medicines will be significantly worse than that if H.R.3 is enacted.
“This analysis is further evidence of the devastating impact Speaker Pelosi’s drug pricing plan could have on research and development, and patients,” said Stephen J. Ubl, president and chief executive officer of PhRMA. “We have made tremendous progress in the fight against disease, but there is still a long way to go. Instead of blowing up the entire health care system and giving up the search for future innovation, let’s focus on practical reforms such as capping out-of-pocket costs, making patients’ monthly costs more predictable, sharing negotiated savings with patients, enhancing competition from generic medicines and promoting value-based contracts.”
“This report reaffirms just how destructive Speaker Pelosi’s extreme drug pricing plan will be for patients and their families,” said BIO’s president and chief executive officer Jim Greenwood. “It’s imperative that we work to make the medicines of today more affordable, and it’s immoral to delay or deny the discovery of new cures and treatments for devastating diseases such as Alzheimer’s and Parkinson’s. Congress’ own non-partisan experts have said this bill would result in fewer medicines being developed, and this new report shows nearly 60 medicines will never be discovered if this bill becomes law.
Lawmakers need to ask themselves which patients in their districts should be denied future cures and treatments. Congress must do better by coming up with a holistic and balanced plan that does not cripple the hopes of patients.”
“Small companies are vital to the biopharmaceutical ecosystem,” said Kristin Jones, president and chief executive officer of the Indiana Health Industry Forum and chair of CSBA. “These scrappy startups are located in communities across the country, provide good-paying jobs to many hardworking Americans, and they’re on the frontline of discovering new cures and treatments. Unfortunately, as this report shows, these small biotech innovators will be disproportionately impacted by this flawed drug pricing bill. We need our elected leaders to work with stakeholders across the health care system on real solutions that will drive down the cost of medicines for patients and protect the future of biomedical innovation.”
This analysis is an expanded version of the study Vital Transformation recently completed examining the impact of H.R.3 on innovation in California.
View the full analysis here.