The state and national business community is warning against the negative consequences of the Biden administration’s plan to impose price controls on several medications under Medicare’s prescription drug coverage. The White House last week announced the first 10 drugs that will be subject to price caps.
The administration is selling its plan, which was included in the Inflation Reduction Act, as a way to save seniors money on their prescriptions, but Danny Seiden, president and CEO of the Arizona Chamber of Commerce & Industry, says the White House is ignoring the negative effects their new price caps will have on innovation and access to new drugs and treatments.
“Pharmaceutical research, development, and manufacturing is an expensive, risky endeavor, with no guarantee of success,” he said. “By telling drugmakers that the government will determine whether they can recoup their investment is a recipe for these innovative companies to forego developing new products that could change – and even save – the lives of millions of people.”
Jay Timmons, president and CEO of the National Association of Manufacturers, reiterated NAM’s opposition to the plan.
“The pricing mandates released by the Department of Health and Human Services on groundbreaking medicines harm innovation and will slow the development of needed therapies and cures by hampering manufacturers’ ability to pioneer new drugs and treatments,” he said. “America has led the way in medical and scientific breakthroughs to battle the most devastating and severe illnesses and conditions. There are so many more diseases for which we need to find a cure—like cancer, juvenile diabetes and Alzheimer’s to name just three—and this price control scheme threatens our ability to do so.”
Mandates, not negotiation
Seiden and the Arizona Chamber along with the Arizona Manufacturers Council have been expressing their opposition to government-imposed price controls since the Inflation Reduction Act was first introduced.
Seiden said the government’s characterization of the price controls as a “negotiation” fails to convey the negative effects they will have on patients.
“Calling something a negotiation implies a level of give and take, but there’s none of that here. This is command and control,” Seiden said. “Patients need to understand that when the government demands downward pressure on some drugs, pharmaceutical manufacturers will be forced to make up their loss by raising prices on other drugs or by downshifting their research and development of other therapies. For the White House to cast its plan as one with only winners ignores that many patients will find themselves on the losing end.”
The latest example of pharmaceutical price controls from Washington
Seiden says the pharmaceutical price controls are just the latest example of Washington risking America’s place as a drug innovation leader.
Citing price concerns, the Biden administration also wants to use an existing law to force drugmakers to license their innovations to other companies. Under the law, known as the Bayh-Dole Act, however, the ability for the government to force additional licensure is strictly limited to only a few circumstances, of which price is not included.
“This administration’s willingness to misuse an existing law to force its pricing schemes on drugmakers is an affront to the patients whose lives depend on the groundbreaking innovations of our nation’s pharmaceutical companies,” Seiden said. “It’s as though this White House is perfectly comfortable with adopting a European-style drug pricing model, never mind that it’s been proven to lead to fewer new treatments and fewer clinical trials.”
A U.S. House-Senate coalition in May called on the Biden administration to withdraw its Bayh-Dole proposal, describing it as a “radical departure” from “precedent under both Republican and Democratic presidents.”
Image Courtesy: LadyofProcrastination, Licensed under the Creative Commons Attribution-Share Alike 2.0 Generic | Wikimedia Commons