Posted on 05/22/2021 4:49:36 AM PDT by Kaslin
On April 22, 2021, Representative Frank Pallone Jr. (D-NJ) re-introduced the Elijah E. Cummings Lower Drug Costs Now Act (LDCNA). Shortly after re-introducing the bill to Congress, Pallone stated, “this legislation will dramatically rein in costs by finally empowering the federal government to negotiate fair prescription drug prices with Big Pharma.”
While Representative Pallone’s bill is well-intentioned, LDCNA would establish rigid price controls for medications that would ultimately deny present and future patients access to life-improving and life-saving drugs. Perhaps most egregious is the fact lawmakers are advocating for price controls on pharmaceutical drugs despite clear warnings from the non-partisan Congressional Budget Office about the negative effects for patients.
If LDCNA becomes law, it will empower Medicare to negotiate with drug companies, force pharmaceutical companies to sell their drugs to private insurers at the rate negotiated by Medicare, limit the maximum price to the average in other countries. The bill would also create a $2,000 out-of-pocket limit on prescription drugs used by Medicare beneficiaries.
LDCNA attempts to resolve one of the most significant problems in U.S. healthcare – the high price of prescription drugs. Studies have shown that Americans face some of the highest drug prices in the world. The RAND Corporation estimated in January 2021 that U.S. patients pay 2.56 times more for drugs than 32 other nations, a figure that rises to 3.44 times more for brand-name drugs.
While imposing price controls may seem an easy way to resolve the problem of high prices for prescription drugs, doing so will only cause a raft of new problems for patients in need of medication.
The pharmaceutical industry faces a fundamental problem that would make price controls particularly dangerous – the high cost of research and the high failure rate of drug candidates.
The Massachusetts Institute for Technology School of Management recently reported that “nearly 14% of all drugs in clinical trials win approval from the FDA,” with the cost of developing a new drug standing at $985 million, according to the American Medical Association. It also takes an estimated 12 years for a drug to make it from a pharmaceutical company research department to FDA approval.
Developing new pharmaceutical drugs, therefore, is not only time-consuming, but it is very capital intensive, requiring significant revenue to be derived from the sale of their products. Faced with reduced revenue caused by price controls, pharmaceutical companies will be physically prevented from developing new, life-saving products and bringing them to market.
Arguably the most significant problem associated with price controls for medication is the significant reduction in research and development (R&D) investments pharmaceutical companies could make to developing new products for American patients.
In 2019, the CBO estimated that “the pharmaceutical industry spent $83 billion dollars on R&D. Adjusted for inflation, that amount is about 10 times what the industry spent per year in the 1980s.” Over the last decade, this significant investment resulted in “the number of new drugs approved for sale increased by 60 percent compared with the previous decade.”
In a letter to Rep. Pallone, the CBO warned pharmaceutical companies would face reduced revenues by imposing price controls that would inevitably cause “lower spending on research and development and thus reduce the introduction of new drugs.” Early CBO estimates suggest declines “in revenues of $0.5 trillion to $1 trillion would lead to a reduction of approximately 8 to 15 new drugs coming to market over the next 10 years.”
In 2005, the National Bureau of Economic Research (NBER) issued a far starker warning. They suggested “cutting prices by 40 to 50 percent in the United States will lead to between 30 and 60 percent fewer R and D projects,” ultimately leading to fewer future medications for patients.
For patients, the warnings from the CBO and NBER could not be more clear: while price controls may lower prices for patients in the short term, the long-term effects will be fewer drugs on the market.
Price controls will not only deny patients access to future drugs, but they could also deny them access to medications currently on the market. The CBO warned Rep. Pallone that “a manufacturer that was dissatisfied with a negotiation could pull a drug out of the U.S. market entirely,” denying patients access to medications they are currently using.
While imposing price controls on prescription medications may be well-intentioned, it should be clear to legislators that a move in that direction will only create a new set of intractable problems for American patients. Rather than being unable to afford medications, patients could be denied access to future drugs as well as those already on the market altogether.
Rather than simply dictating prices to pharmaceutical companies, Congress would be better placed to lower the regulatory burdens and allow generic drugs to reach patients faster and reform pharmacy benefit managers that artificially raise the price patients pay. That way, patients will continue to be able to access current and future drugs without the significant prices.
Be shocked if this goes anywhere. Pharma tentacles run deep in DC especially after the WuFlu.
True, I for one want them to stop making killer drugs. These newer drugs have to many bad side effects, I’’ve a whole list of them. Do better on older meds which are cheaper too.
The government has already made their deal with big pharma....”0” liability!!
Considering that nine new billionaires have been created as a result of this so-called pandemic and so-called vaccine, this nonsense about price controls inhibiting R &D is a steaming pile of horse hockey.
This.
Their stock buybacks are 10 times more then R&D at least. Thats really where their money is.
COVID vaccines should be viewed as an entirely different issue.
The real impact of price controls on R&D has to be seen in the context of a company’s return on investment in drugs that are not widely used but are absolutely essential for those who need them.
There was a story posted here last year about a certain drug treatment that cost something like $10,000 per dose, and it was used to treat a disease or condition that required monthly doses of the medication. The thread was filled with complaints about “price gouging” from many readers, but then someone pointed out that there are only several hundred people in the U.S. who even have the medical condition that is treated by this drug. If the company that makes the drug can’t sell it for thousands of dollars per dose then they’d never bother producing it at all.
A COVID vaccine is the exact OPPOSITE of this. In the case of COVID, the drug companies knew that they never had to worry about R&D costs because they were looking to produce something that nitwits and Branch Covidians would be lining up to get — even multiple times, if necessary (and even if NOT necessary). And they don’t even have to spend a penny on marketing and advertising because they have every dope in government, the media, and on propaganda websites and social media platforms scolding people who decide NOT to get vaccinated.
I read somewhere the big pharma spends a lot more on advertising than on R&D
Doubtful it goes anywhere but maybe it should. Start with price gouging for insulin.
It appears to me that most of the drugs coming from big pharma are designer drugs to beat or extend the patents for other drugs.
From what I can tell in the main, really new, needed and useful drugs are developed in academic research labs that are working on wide spread and life threatening problems; not things like psoriasis or 24 etc. “Nothing is everything” has been pounded into my head and I can’t seem to unsee that queer guy walking his Basset Hound.
Who’s paying for that academic research?
Pharma got in bed with Big Govt for 0bummerCare and Covid Vax.
Let their penises rot off with the STIs they caught.
Based on the number of commercials for their products on TV and in internet ads, I could believe that.
The new drugs are far more dangerous than the older drugs. Big Pharma finds a drug that affects the body a certain way, then invents a disease to market the drug. Most modern diseases are created by drugs and vaccines.
Some drugs are needed but good health is achieved with good sanitation and a good diet: eliminating industrial seed oils like canola and soybeam oil, and reducing sugar and refined carbohydrates to a minimum. Stop eating processed foods. Eat plenty of butter and animal fats, use sea salt and salt to taste. Enjoy bacon and eggs.
“The Massachusetts Institute for Technology...”
For?
Most likely. The big lie that they spend most on R&D is being debunked finally!!!!
Yep.
Yes, Gail - when every fourth commercial (cue super-annoying music) is urging you to badger your physician for a specific medicine you know way too much money is at stake for someone, and it isn't for your benefit. For all of that supposed R&D there's far too many instances of drugs ending up doing more harm than healing. Now my stomach hurts...I better go take a Zantac.
Exactly; margarine is slowly poisonous. I eat oatmeal every third breakfast to keep the arteries cleaned out, walk a lot, avoid medicines not critical and MANAGE STRESS. VA doctors amazed at the low cholesterol levels and overall health, especially being post-cancer.
Asked if I wanted an HIV test. "No, save those for the new improved 'woke' military. They're going to need all you've got."
You’ve got to be kidding! Every old drug was once a new drug, and it takes an amazing amount of time and money to research a new drug and bring it to market. Every time the left wants to demonize some business they add “big” to it. If it weren’t for “big” pharma, there would be a lot more death and suffering. Do they make mistakes? Of course. Do they sometimes do things that are not right? Of course. Name me any business that is not guilty of that.
Now we are to believe that the government can wave its magic wand and make things cheaper, just as it waves its magic wand and makes wages higher and people richer. The government screws up the market and always makes things worse.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.