For Immediate Release:
Contact: Kelly Broadway, 202-808-8853
Price Controls Keep the Cancer Moonshot on the Launch Pad
Washington, D.C. – This week the Administration will go before multiple House committees to defend the President’s Fiscal Year 2024 Department of Health and Human Services budget.
It is vital that during the hearings, lawmakers focus on the real-world impact policies in the budget – like the expansion of the Inflation Reduction Act’s price controls – will have. The Administration is proposing to double the number of drugs subject to price controls in the Medicare Drug Negotiation Program, a program that has not even launched yet. It is also proposing to bring those price controls online within five years instead of the law’s nine years for pills and 13 years for biologics. The lasting damage of the IRA is not yet known, but so far two drugs have been pulled from the market, and more are expected. By doubling down on a failed policy that is already resulting in fewer cures, the budget is creating the worst environment for innovation while professing the need for cancer cures and “moonshots.”
Lawmakers must hold the Administration accountable and demand answers. The health of our nation depends on it.
The Congressional Budget Office estimated the Inflation Reduction Act (IRA) would reduce biopharmaceutical manufacturer R&D spending that would lead to fewer drugs on the market by about one over the 2022-2031 period, about 4 over the subsequent decade, and about 5 over the decade after that. The University of Chicago found a similar approach would lower R&D spending by 29 to 60 percent from 2021 to 2039, which translates to somewhere between 167 to 342 fewer new drug approvals during that period. According to an analysis of SEC filings and investor calls conducted by Horizon Government Affairs, that number is already 2 products seven months after the law was signed, but four years before price controls take effect. The IRA policies are already changing investment decisions that limit new treatments well before policy changes.