We are entering the most exciting time of biomedical innovation and advancement in American history. Our growing understanding of human genetics and the promise of personalized medicine will advance the race to cure cancer and treat or prevent Alzheimer’s disease. However, this progress will be erased if Congress passes government drug price controls, which will end the promise of innovation and prevent patients from seeing the benefits of the next generation of cures.
Americans enjoy unprecedented access to new, novel treatments. Of the 460 new medicines approved globally since 2012, 85% are available to Americans compared to just 59% in U.K. and 44% in Canada. Of the 123 new life-saving cancer drugs, 93% are available in the U.S. compared to just 69% in the U.K. and 59% in Canada. It’s baked in that, in order for government price controls to work, these countries must deny and ration care to their citizens.
Our system thrives on access and innovation. Government bureaucrats don’t get to decide whether we have access to medicine. The market provides solutions, and Americans freely utilize them.
Of course, no system is perfect. Our health system needs real reforms, not feel-good gestures that create more long-term problems, and net no true savings on drug prices.
Democrat proposals typically just shift costs around so that they can mask who pays for what. For example, the Affordable Care Act hasn’t reduced health spending, it just shifted more costs of health care to taxpayers and raised the cost of insurance for people who are insured through their employer. Moreover, the latest reconciliation bill raids Medicare “savings” from the price control provision to pay for ACA subsidies for wealthy individuals.
Under this same proposal, we would see at least 15% fewer drugs developed and brought to market in the next 17 years. Do you want to accept delaying the cure for Alzheimer’s disease by a decade or more? In a few days, Democrats are going to force us to accept, that instead of breakthrough medicines, we’ll just have to settle for end-of-life care.
There are more than 6 million Americans living with Alzheimer’s. We all know and love someone impacted by this relentless disease. It’s estimated to cost our health system $321 billion this year, and by 2050, it will exceed $1 trillion. Of the total costs spent for seniors with Alzheimer’s, barely 10% is spent on prescription drugs. Everything else is hospital and long-term care. Without many of these medicines, we would be spending much more on hospitalizations, and be living shorter, worse quality lives. So what is the human value, let alone the monetary value of such a cure?
While it’s politically easy to demonize pharmaceutical companies, Democrats need to remember that this industry bailed us out of the pandemic, developed miracle gene therapies that put terminal cancers in complete remission, and cured Hepatitis C. This industry did all of this and more because we allow them to fail and try again. None of the above happened overnight. It was decades in the making.
There are basic economics on why we’re first and best in this industry. First, this industry spends more on R&D – it totaled $120 billion just last year. It’s a long game though, often taking 15 years to see that investment make it to the pharmacy counter. But 90% ultimately fail.
All of that money is spent at great risk – investors don’t know what will work and what won’t. If the federal government eliminates incentives to make a risky investment, R&D spending will dwindle.
Look at the EU: once that governing body took control of the pharmaceutical industry, venture capital, patent registrations, and other key factors that demonstrate a strong industry, declined significantly. Meanwhile, the U.S. continues to grow with proof by the numbers and at our local pharmacy.
The pain for us is at the pharmacy with increasing out-of-pocket costs. Unlike other health care categories, retail prescription drugs account for only 8 percent of our nation’s health spending. While list prices have grown less than inflation, drug price negotiators have pocketed more discounts, but are forcing patients to pay more out-of-pocket. In fact, these kickbacks for the middlemen have exceeded 50% of the list price for many prescription drugs. Those kickbacks must go to patients and we need a solution to this shortcoming in our system.
Republicans have solutions. I joined Senator Michael Crapo, R-Idaho and my colleagues in introducing the Lower Costs, More Cures Act, which includes more than 20 policies to address shortcomings in drug pricing. Just like the new laws the Ensuring Innovation Act and the ACT for ALS, which we helped author and support, which helped drive down drug prices, this legislation promotes competition, innovation, and safe more efficient paths towards approval for novel treatments
There is common ground on making medicines more affordable for Americans, on preserving our R&D pipeline for future cures, and on the president’s goal of curing cancer. However, progress will never be made if the will and the incentive to innovate is decimated.