By Jeff Wasden
Recently, a remarkable thing happened in the fight against Alzheimer’s, the chronic neurodegenerative disease that accounts for a large majority of dementia cases. A woman with a genetic predisposition to acquire the condition also had another secret hidden in her genes: a protective mutation that, if scientists can replicate its mechanism of action, could lead to a drug that provides others the same protection.
It’s a very exciting development that provides hope to millions of Alzheimer’s patients and their families, and the biopharmaceutical industry will surely invest billions trying to crack the case. However, if legislation introduced by Speaker Nancy Pelosi passes Congress, that hope could be dimmed quickly.
Her bill, H.R. 3, the Lower Drug Costs Now Act, would likely quash innovation throughout the medical science community almost overnight. Right now, the industry attracts $100 billion in capital each year to develop treatments and cures for diseases like Alzheimer’s. But that enormous level of investment is predicated on free-market pricing; Speaker Pelosi’s bill would instead impose a convoluted government-pricing scheme like those seen in Europe and Canada as well as a likely massive tax on cutting-edge pharmaceutical companies.
We can all appreciate that out-of-pocket costs for patients who need prescription drugs has increased and is becoming a considerable burden on some individuals. But this legislation is the worst possible way to address that problem, trading short-term savings for long-term innovation and access.
Lawmakers need to recognize that world-class research costs billions of dollars and progressing through FDA trials takes billions more—and many of these efforts are ultimately dead ends that don’t generate any returns on investment. The scientific method won’t ever change, so if we want these drugs, we have to be willing to devote the necessary resources and ensure that the financial rewards justify the risks. That, in turn, means that pharmaceutical companies have to rely on what the market will ultimately bear when they are able to finally bring a drug to the public.
Therein lies the problem with H.R. 3: If the government takes away the free market, it undermines the entire process. You can forget about ground-breaking Alzheimer’s research, because it’s simply too risky if the bill becomes law. Furthermore, the legislation would actually allow the federal government to determine which diseases it deems worthy of research and development rather than private-sector medical experts.
When you have a crown jewel like the American medical research community, you have to protect it. It is estimated that H.R.3 could lead to the permanent loss of almost one million jobs in the industry. These are the best and brightest researchers in the world, and we won’t be able to simply reassemble such a remarkable community of medical scientists once Speaker Pelosi’s bill proves to be a failure.
Another problem that has been demonstrated in other countries is that government pricing often leads to lower supplies and long wait times for medications that are readily available here. For instance, among 270 new medicines that came to market in the U.S. between 2011 and 2018, fewer than half are available in Australia and Japan, and only 52 percent in Canada.
Do these consequences—chilling innovation and limiting access to life-changing and life-saving drugs—seem worth saving a few dollars right now due to price controls? If you’re one of the millions waiting for a treatment or cure to a terrible illness like Alzheimer’s, or if you currently rely on critical medications, probably not.
Yet the affordability issue remains. An alternative to the harsh measures in H.R. 3 would be to craft better legislation that implements targeted changes, such as requiring insurers to share more of their negotiated savings with patients.
Regardless, the Lower Drug Costs Now Act is the wrong approach to dealing with the cost of prescription medications. It will almost certainly slow or halt the researchers who are no doubt already on their way to emulating the protective mutation they just discovered. If they have the power of the free market behind them, then they may truly be able to beat Alzheimer’s once and for all and spare the next generation from suffering with the cruel disease.
Let’s hope Congress realizes this before it’s too late.
Jeff Wasden is President of the Colorado Business Roundtable.
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