The bioscience industry has hit back at wide-reaching drug price control proposals in Massachusetts and Connecticut that threaten sector innovation and investment.
Massachusetts Gov. Charlie Baker and Connecticut Gov. Ned Lamont promoted legislation penalizing manufacturers for price increases during a press conference earlier this week.
The proposals levy penalties if a drug price increase is greater than the rate of inflation plus 2%. In both proposals, the penalty equals 80% of the increase above the rate of inflation, plus 2% in a year.
Both bills are waiting action in their respective state legislatures.
'Price Controls Never Work'
Connecticut Bioscience Growth Council executive director Paul Pescatello called the proposals “ill-conceived and counterproductive.”
“However well-intentioned, the proposals promoted by the governors of Massachusetts and Connecticut run counter to what actually promotes innovation and saves lives,” Pescatello said.
“Price controls never work. You name the product or service, medicines, flour, gas—you erect arbitrary government price controls, you get less of it.
“Countries with drug price controls suffer drug shortages and delayed entry of innovative new medicines.”
Pescatello said prescription drug prices represent just 10% to 14% of overall healthcare costs and reflect the significant time and costs of developing lifesaving medicines.
“Proponents of heavy-handed government price controls attempt to paint a picture of drug prices as looming large in the healthcare equation. In fact, this slice of the healthcare cost pie has been remarkably stable since World War II.
“Controlling drug prices will not do anything about other factors, including hospitalizations, doctor’s visits, administration, and government fees, taxes, and benefit mandates.
“Biopharma companies can only take on the enormous risks of new research and development—most new medicine R&D efforts do not result in a new drug—if they are confident that they can recoup their investment.
“Do not overlook the fact that revenue from each new drug supports a vast amount of highly valuable research and thousands of new drug candidates that do not result in FDA-approved new medicines."
Ridgefield-based Boehringer Ingelheim released a statement saying it “stands firm that the new drug pricing cap bill will hurt, not help patients, while also stifling innovation.”
Pfizer, which has a significant presence in both Connecticut and Massachusetts, said the proposals hurt efforts to expand access to medicines and negatively impact future scientific innovations, as well as the economies of both states.
Pescatello said prescription medicines, despite their sometimes apparent high cost, are far cheaper than the hospitalizations and surgeries they replace.
“Cystic fibrosis is a good example of this," he said. "Cutting edge drugs have extended the lives of cystic fibrosis patients by 30 years and drastically reduced the amount of time cystic fibrosis patients are tethered to machines in long hospital stays.
“New medicines are the way out, not the cause of healthcare cost inflation.”
Pescatello said policymakers must support innovation and research and development in the biopharma sector, noting the successful development of COVID-19 vaccines.
During the press conference with Lamont, Baker ironically noted that the work of biotech companies is “critically important, not just because they provide a lot of jobs, but because they solve a lot of problems,” and praised the rapid, successful development of COVID-19 vaccines.
“Look what Pfizer was able to accomplish in leading vaccine development efforts,” Pescatello said. “That incredible effort reflected countless years of research and hundreds of millions of dollars invested in previous vaccine development.
“The proposals by Governors Baker and Lamont will stifle innovation and turn the research and development miracle of the Connecticut and Massachusetts biotech cluster into a nightmare.”