A week before the August recess, Senate Democrats are pushing legislation containing anti-science drug pricing limits, which the biotech industry says will damage research and development and innovation.
Last week, every member organization of the Council of State Bioscience Associations (CSBA) sent a letter to the leadership of the House and Senate stating that planned drug price regulations will “devastate” innovation.
Proposed drug pricing legislation will hurt small biotechs – the leading innovators
“Most of our biopharmaceutical member companies are small-to-medium in size and relatively few have products on the market. Yet, these companies are leading the world in cutting edge research to develop new therapies and cures,” said the CSBA letter.
“Most of our member companies do not yet have commercial products and are reliant on private sector investment,” said CSBA, and biopharmaceutical firms reinvest more in R&D than any other industry.
Drug price controls will hurt investment in R&D
But price limits would put this investment at risk, according to a recent Vital Transformation study (funded by the Biotechnology Innovation Organization).
This study found that proposed price controls would cut some companies’ net earnings by 70% to 100%, making it harder for them to spend money on R&D.
If pricing limits had been in place throughout the previous decade, just six of the 110 currently authorized medications would have reached the market, the study shows.
According to the most current Altarum health sector economic figures, higher health care expenditures are not due to drugs. While the overall inflation rate jumped to 9.1%, prescription drug prices increased 2.5% after declining 2.5% in June 2021. Meanwhile, dental and hospital charges have risen by 4.7 and 3.5 %, respectively.