Biotechnology Innovation Organization (BIO) Director of Communications Brian Newell released the following statement regarding the drug cost plan released today by Congressional Democrats:
“There is broad agreement on ways we can lower drug costs, while preserving incentives for innovation. That is why a coalition of drugmakers, insurers, consumer advocates, and others have proposed a new set of solutions to provide greater access to more affordable prescription drugs. Instead of expanding the role of the federal government as Democrats have proposed, the coalition’s approach would leverage the power of the free market because that’s the best way to lower costs and preserve the medical innovation that improves the lives of patients.
“The proposal outlined today ignores the real drivers of health care spending—hospital care and provider services – and then promises to take us down the failed path toward government price controls and reduced access to prescription drugs. The facts are clear that when patients enjoy choice and competition, like seniors do in the Medicare Part D program, they also enjoy lower drug costs. This political platform undermines a program that’s working well for patients and taxpayers. Meanwhile, these so-called ‘transparency requirements’ would do nothing to lower patient costs or provide useful information to consumers, and instead would have a chilling effect on investment in new cures, particularly with smaller companies.
“Make no mistake—this plan is a bad deal for patients and the future of American innovation. The biotechnology industry is ready to work with policymakers from all parties to lower costs and drive savings within our health care system. However, we will not support misguided policies that threaten the medical breakthroughs patients truly need. Our country leads the world in biotechnology innovation, with more new cures being discovered by our researchers than the rest of the world combined. There are real-world consequences to these kind of flawed policies, and we will do our part to inform the public of those consequences.”
The Medicare Part D program—which prohibits the federal government from negotiating drug prices—has cost $349 billion less (45%) than the Congressional Budget Office (CBO) originally projected. The private plans which administer Part D already negotiate aggressively with manufacturers to achieve savings. A recent analysis from the QuintilesIMS Institute examined average discounts and rebates across 12 widely prescribed therapy classes found that plans and patients in Medicare Part D pay 35.3% below drugmakers’ list prices—even lower than what the private sector generally pays for the same drugs.
Further, the nonpartisan CBO has stated repeatedly that direct Medicare “negotiations” would have little effect on drug costs unless the government was also empowered to unilaterally set prices and deny access to certain prescription drugs. That is why, earlier this year, more than 200 patient-advocacy groups wrote Congress in opposition to direct Medicare negotiation.