Drug Price Cap Bill Cripples State’s Biopharma Industry
More than 20 biotech and biopharma companies and organizations, including Connecticut’s Alexion, Boehringer Ingelheim, Sanofi, and Pfizer, are warning that drug price cap legislation will undermine efforts to build a vibrant life sciences sector in the state.
“HB 6447 would cripple the very thing that has proven to be so efficacious and necessary in the age of COVID-19: the biopharmaceutical research and development innovation ecosystem,” the letter noted..
The bill, which was proposed by the Governor, would make Connecticut the first state to impose price controls on the biopharmaceutical industry.
The group notes that given what the biopharma industry has delivered—in less than a year, safe and effective vaccines to prevent COVID-19, together with several highly effective antibody treatments for people who contract COVID-19—this is not the time to cripple the life sciences research and development and business models that worked so well.
Most lab concepts fail, with only one in 1,000 research projects resulting in an FDA-approved drug. To innovate and take on risk of such magnitude companies must have confidence that they will be able to price their products in such a way that they are able to recoup and profit from their investments.
Price controls would stifle authentic innovation and cause cures and treatments to be postponed or left undiscovered.
The letter also underscored that HB 6447 raises constitutional concerns and singles out the biopharma industry. The legislation ignores the other stakeholders who determine what consumers ultimately pay for a medicine—payers, pharmacy benefit managers, wholesalers, and the government.
The biopharma group emphasized that the Governor’s bill “… seems to ignore hard lessons learned over many decades of experience. When government has set prices in the past, whether for flour, gas, apartments, or other goods, the result has been less of the good.”
Patient, Economic Impact
Nearly 90% of new medicines launched since 2011 are available in the U.S. compared to just 50% in France, 46% in Canada, and 41% in Ireland.
The medicines that are available in these countries take much longer to reach patients. On average, patients must wait at least 18 months longer in France, 15 months longer in Canada, and 20 months longer in Ireland than in the U.S.
Price controls may be a useful straw man to vent frustration, but they fuel misery in the form of empty pharmacy shelves, long wait lists, and illnesses prolonged or rendered terminal owing to reduced access and supply shortages.
Finally, the letter noted the investment Connecticut has made in the biopharma industry and its impact on the Connecticut economy—the sector’s jobs are high paying and not easily sent offshore (Connecticut biopharma supports $9 billion in economic output and over 35,000 jobs).
It would be hugely counterproductive to our efforts to attract biopharmaceutical companies to Connecticut if we were to enact legislation like HB 6447 that fundamentally ignores the very core of what fuels biopharmaceutical innovation.
The biopharma group concluded with the critical fact that “… biopharmaceutical innovation is the way out, not the cause, of the healthcare cost crisis. Innovative medications cost the system considerably less than the chronic hospitalizations, surgeries and disability they replace.”
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