Congressional Democrats are pushing a reckless tax-and-spending proposal with a prescription drug price-setting plan that would create drug shortages and stifle the development of innovative new treatments and therapies. Tragically, America’s senior citizens will be hit hardest by this socialist overhaul.
Enforcing government price controls eliminates the company’s ability to recoup those types of investments, regardless of how many improvements it makes. This would devastate pharmaceutical innovation across the board, but to understand the gravity of this proposal we can look at the drugs used to treat cancer.
Most research on cancer drugs is done after initial approval—about 60 percent of oncology drugs approved a decade ago received additional approvals in subsequent years, most of which were seven or more years after approval. For example, Ipilimumab, a drug used to treat melanoma, was first approved by the Food and Drug Administration (FDA) in 2011. But over the next 11 years, the FDA approved nine additional cancer treatments.
That kind of innovation doesn’t just happen by accident. Companies must make expensive investments to research and test drugs to identify potential new therapeutic uses. Then, they must prove those uses are safe and effective through three phases of clinical trials. For a drug like ipilimumab, its additional nine uses require a new round of clinical trials and investment. These costs can easily run into the hundreds of millions of dollars.
Drug development is always risky—about 90 percent of drugs that enter clinical trials are never approved by the FDA. But in America’s current market-based system, companies have the opportunity to recoup their investment when new drugs and other uses become successful. That’s why more new drugs are developed in the United States than in any other country.
Under Congressional Democrats’ proposed new drug pricing reform, this is at risk. According to a University of Chicago study, these socialist drug price controls kill 342 cures.
But why is it especially bad for the elderly? Because of price controls in Medicare, 96 percent of American seniors have little access to innovative medicine. If the Democrats’ drug price reforms are enacted, American companies will only have an incentive to invest in products that do not depend on Medicare coverage.
Democrats couldn’t come up with a better plan to shift investment in medicine away from the elderly and toward a younger, healthier population if they tried.
Guy Reschenthaler represents Pennsylvania’s 14th District.