Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
“The Biden administration [last] Tuesday released its list of 10 prescription medicines that will be subject to the first-ever price negotiations by the U.S. Medicare health program… President Joe Biden’s signature Inflation Reduction Act (IRA), signed into law last year, allows Medicare to negotiate prices for some of its most costly drugs.” Reuters
The left supports the reform, arguing that worries about reduced funding for new drugs are overblown.
“‘The cancer moonshot will not succeed if this administration continues to dismantle the innovation rocket we need to get there,’ PhRMA stated Tuesday. That’s debatable. Most of the basic research on curing cancer and other diseases is funded by the government and philanthropy. Big Pharma is mainly involved in clinical trials and marketing…
“Also, the negotiations apply only to drugs that are nearing their patents’ expiration. What’s more, even if price caps do reduce Big Pharma’s profitability, business logic says that they should still have a strong incentive to bring innovative drugs to market…
“The real issue here is not that pharma is good and government is bad or the other way around but that there is no clear standard for what a fair price should be for a drug that is available from only one source, that costs a lot to research and develop but very little to manufacture and that provides important health benefits.”
Peter Coy, New York Times
“It’s reasonable to ask how many fewer drugs might get developed and which drugs those might be. The Congressional Budget Office, the economic referee in legislative debates, estimated that the drug pricing provisions of the I.R.A. would result in 13 fewer drugs coming to market in the United States over the next three decades. That’s a very small share of the 1,300 new drugs expected over that period…
“One of the big reasons any effects on innovation may be muted is that drugs are shielded from government negotiation for quite a while: until nine years after Food and Drug Administration approval for small-molecule drugs like pills and 13 years for injectable biological products. Drugmakers can continue to set their own prices and reap substantial profits before having to submit to negotiation.”
Larry Levitt, New York Times
“We analyzed how much it costs on average to bring a drug to market and how much these companies have earned from the selected drugs since their launch. Not only are revenues enough to justify the investment in these particular drugs, they are enough to fund several more generations of pharmaceutical development…
“Seven of the 10 selected drugs had cumulative earnings of over $25 billion, using the estimate of $3.4 billion for R&D favored by the industry. At the high end, Eliquis, an anticoagulant, has earned $87.5 billion above the cost of the average new drug since 2012. At the low end, the heart medication Entresto has earned $13.7 billion over the average cost of bringing drugs to market since 2015…
“Despite the pharma companies’ fears, negotiating Medicare prices will not lead to a ‘nuclear winter’ — just perhaps a small chill in their profit margins.”
Richard G. Frank and Caitlin Rowley, Bloomberg
The right criticizes the reform, arguing that it will reduce spending on drug development.
The right criticizes the reform, arguing that it will reduce spending on drug development.
“The process of developing a new medicine is complex and arduous, making it an extremely expensive undertaking. On average, it costs more than $2 billion and takes roughly 10 to 15 years. And that’s for successful products. Less than 12% of drugs that make it to clinical trials get across the finish line. So, investments associated with failed products also have to be baked into company budgets…
“To preserve the pipeline of new innovative treatments, therapies, and vaccines, drug companies must have the opportunity to recoup investment rather than be forced to sell products at below-market rates…
“A study released in June finds that Inflation Reduction Act price manipulation is expected to slash the number of new drugs coming to market by 40% over the next decade.”
Tom Price, Washington Examiner
“Companies are already cutting costs in preparation for price controls… Alynylam Pharmaceuticals dropped the developmental drug Vutrisiran, a drug used to combat a disease that causes blindness…
“Eli Lilly also dropped a promising blood cancer drug that it had sunk $40 million into developing simply to cut its financial losses amid projections that price controls could more negatively affect specific types of cancer drugs. AstraZeneca is considering not even launching new cancer drugs to market in the U.S…
“U.S. medicine companies develop two-thirds of all new medications worldwide. While people pay more for their medicine overall, we also have access to far more medications than other countries. A fraction of new medications that have been introduced in America since 2011 are available in other countries due to their price control schemes…
“The long-term costs of these price controls cannot be overstated.”
Roy Mathews, Washington Examiner
“The law sets the drug price ceiling at between 25% and 60% of its list price, with no price floor. Drug makers that don’t participate or reject the government’s price will incur a crippling daily excise tax that starts at 186% and eventually climbs to 1,900% of the drug’s daily revenues. This is extortion, not a negotiation…
“The law will also give companies the incentives to launch drugs at higher prices and raise prices for privately insured patients to compensate for the Medicare cuts. That means the 218 million Americans with private insurance will pay more for drugs…
“Medicare spending on prescription drugs has grown less than for hospital and physician services in the last decade. Total U.S. out-of-pocket spending on prescription drugs in nominal dollars is lower than it was in 2003 and accounted for only 1% of the $4.25 trillion the U.S. spent on healthcare in 2021. Competition from generics has held down drug prices.”
Editorial Board, Wall Street Journal
World’s oldest chicken is 21.
Washington Post
