Strict New Price Restrictions Impede Medical Progress and Limit User Access to Treatment
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In a series of discussions on the impact of government price controls on the life-science industry and American patients, Brad Watts, Senior Vice President at the Global Innovation Policy Center (GIPC), sheds light on the potential negative effects of such policies.
Watts' article, published on the website's mentioned organization, focuses on intellectual property issues in relation to the potential implementation of government price controls. He emphasizes that many of the medications subject to price controls under the White House announcement are already facing generic competition and upcoming patent expirations.
The Chamber's research suggests that price controls may put the development of more than 400 new medicines at risk. Furthermore, it shows that price controls and market-restrictive policies can result in longer wait times for existing medicines.
Out of 104 new oncology products launched globally since 2017, 80 percent were launched in the U.S., where, until now, there have been no price controls. The article aims to highlight the potential negative effects of government price controls on American patients and the life-science industry.
Implementing price controls on lifesaving medicines in the U.S. tends to reduce patient access to new cures and treatments and undermines pharmaceutical innovation. Such policies lead to fewer drugs entering the market, delayed availability of new medicines, and cuts in research investments by pharmaceutical firms.
From an economic perspective, these policies discourage pharmaceutical companies from investing in costly and risky research and development because the potential financial returns are capped or uncertain. The Council of Economic Advisers estimated that stringent drug pricing legislation could reduce the number of new drugs entering the market by about one-third, resulting in a decrease in average life expectancy by nearly four months over a decade.
Further, cost-containment pressures from price controls on Medicare Part D plans are expected to tighten formularies and increase restrictions (prior authorizations, step therapies), which can inadvertently increase patient costs or prescription abandonment.
In summary, the article argues that patient access to innovative medicines declines, pharmaceutical innovation suffers, economic and health outcomes worsen, and industry contraction may occur if government price controls are implemented. These outcomes arise because price controls override free-market mechanisms that incentivize innovation through financial rewards, raising concerns about replicating European-style socialist drug pricing models with their known drawbacks on innovation and access.
Charles River Laboratories, a major service provider in the pharmaceutical sector's research and development space, has reported an unusual deterioration of the pharma companies' business in anticipation of government price controls. Countries that use price controls see fewer overall biopharmaceutical product launches.
The article calls for action from Congress to protect American patients and the life-science industry from the potential negative effects of government price controls. The Biden Administration's price control policy may lead to reduced access to new cures and treatments for American patients. Congress must take action to prevent unelected, unaccountable government bureaucrats from implementing a price control regime on America's life-science innovators.
- The Global Innovation Policy Center (GIPC) has raised concerns about government price controls on the life-science industry, potentially impacting American patients.
- Brad Watts, a Senior Vice President at the GIPC, contends that intellectual property issues could be exacerbated by the proposed implementation of government price controls.
- The Chamber of Commerce's research indicates that price controls could jeopardize the development of more than 400 new medicines.
- The article highlights that implementing price controls on lifesaving medicines may reduce patient access to new cures and treatments, undermining pharmaceutical innovation.
- From an economic perspective, pharmaceutical companies may invest less in costly and risky research and development due to uncertain or capped financial returns resulting from price controls.
- The Council of Economic Advisers predicts that strict drug pricing legislation could lead to a decrease in average life expectancy by nearly four months over a decade by reducing the number of new drugs entering the market.
- The article advocates for congressional action to protect American patients and the life-science industry from the potential negative effects of government price controls, citing potential industry contraction and reduced access to new cures and treatments.
