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100 Fewer Lifesaving Drugs


12.04.19

WASHINGTON, DCH.R. 3 could lead to as many as 100 fewer drugs entering the United States market over the next decade, or about one-third of the total number of drugs expected to enter the market during that time.”

Think about that. 100 lifesaving drugs could be kept from Americans desperately in need because of Speaker Pelosi’s partisan drug pricing scheme, according to a startling new report from the White House Council of Economic Advisers.

As the report notes, “CEA’s estimates are at the low end of the damage caused by H.R. 3. For example, in its assessment of the bill, CBO cites a study that finds that increasing the potential size of the drug market by $2.5 billion in revenue is associated with one new drug. Based on the CBO’s preliminary analysis of a projected $500 billion to $1 trillion revenue decline over the next decade, this study suggests 200 to 400 fewer drugs will enter the market, far larger than CEA’s estimate. Other studies cited by CBO suggest even larger harmful effects.”

That is unacceptable, and is why Energy and Commerce Republican Leader Greg Walden (R-OR) and Rep. Dan Crenshaw (R-TX) have joined together for a video series aimed at providing the facts on Speaker Pelosi’s partisan plan for fewer cures.

As Walden has said repeatedly, “it doesn’t have to be this way.” There are bipartisan solutions we could pass into law right now that would help lower drug costs for Americans without limiting their access to 100 potentially lifesaving cures. Lower costs and more cures are not mutually exclusive.

It’s time for Democrats to drop H.R. 3 and stop putting politics over progress.

Read the report ⤵

White House Council of Economic Advisers: House Drug Pricing Bill Could Keep 100 Lifesaving Drugs from American Patients

https://www.whitehouse.gov/articles/house-drug-pricing-bill-keep-100-lifesaving-drugs-american-patients/

December 3, 2019

The Trump Administration is committed to lowering prescription drug prices while encouraging medical innovation to help patients access new lifesaving drugs. H.R. 3, the Lower Drug Costs Now Act of 2019, may share the Trump Administration’s first goal of lowering prices, but the threat it poses to continued medical innovation will harm American patients in ways that far outweigh any benefits.

H.R. 3 aims to lower prices for select drugs by effectively forcing drug manufacturers to accept prices set by the Secretary of Health and Human Services—or otherwise face an excise tax of up to 95 percent of sales. This tax would not be deductible for income tax calculations, so drug manufacturers could lose money from selling the drug. Consequently, manufacturers would either have to accept the Secretary’s price for a given drug or decline to sell it in the United States.

The Council of Economic Advisers (CEA) estimates that H.R. 3 could lead to as many as 100 fewer drugs entering the United States market over the next decade, or about one-third of the total number of drugs expected to enter the market during that time. CEA also estimates that by limiting access to lifesaving drugs, H.R. 3 would reduce Americans’ average life expectancy by about four months—nearly one-quarter of the projected gains in life expectancy over the next decade.

Furthermore, the economic value of this loss of new, better drugs, and the resulting worse health outcomes, could reach $1 trillion per year over the next decade. That is far larger than H.R. 3’s projected savings.

CEA’s estimates are at the low end of the damage caused by H.R. 3. For example, in its assessment of the bill, CBO cites a study that finds that increasing the potential size of the drug market by $2.5 billion in revenue is associated with one new drug. Based on the CBO’s preliminary analysis of a projected $500 billion to $1 trillion revenue decline over the next decade, this study suggests 200 to 400 fewer drugs will enter the market, far larger than CEA’s estimate. Other studies cited by CBO suggest even larger harmful effects.

Reducing the number of new drugs by one-third over the next decade would have substantial negative effects on Americans’ health. To value the economic costs from these negative health effects, it is estimated that spending $2,000 on pharmaceutical research and development increases population health by one statistical life-year. This means that H.R. 3 would reduce population health by 37.5 million to 100 million life years over the next decade. In other words, H.R. 3 would reduce Americans’ average life expectancy by about four months.

Lowering the price of prescription drugs is rightly a major concern for American patients and policymakers, but H.R. 3 is the wrong approach to address a pressing problem—especially when bipartisan legislative alternatives that encourage innovation while lowering prescription drug prices are gaining support in Congress.

Heavy-handed government intervention may reduce drug prices in the short term, but these savings are not worth the long-term cost of American patients losing access to new lifesaving treatments.

Click here to read the full report.


Subcommittees
Health (116th Congress)
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