NAM: Drug Price Controls Harm Manufacturers and Consumers
The Biden administration on Thursday released prices for the first 10 Medicare prescription medications subject to price controls (The Wall Street Journal, subscription). It’s a move that will harm innovation and limit patients’ access to therapies and cures, according to the NAM.
What’s going on: The 2022 Inflation Reduction Act gave the government new power to mandate specific prices for certain prescription drugs in the Medicare program.
- The announcement about the new prices—which are scheduled to go into effect in 2026—comes a year after the Department of Health and Human Services said it had chosen the first 10 drugs to be subject to the price controls mandated by the IRA.
Why it’s problematic: Price controls hamper innovation, put manufacturing competitiveness at risk and ultimately harm patients.
- “The inevitable, albeit invisible, result of [this] raid on pharmaceutical companies will be fewer new medicines,” according to a Wall Street Journal (subscription) editorial this week.
The NAM says: “[T]he pricing mandates … harm innovation and will slow the development of needed therapies and cures by hampering manufacturers’ ability to pioneer new drugs and treatments,” NAM President and CEO Jay Timmons said.
- “Price controls will limit [research and development], plain and simple, as every dollar of revenue curtailed by price controls is a dollar that can’t be devoted toward the astronomically high cost of developing a new medicine.”
What should be done: What the U.S. health care system truly needs is pharmacy benefit manager reform, Timmons continued.
- “PBMs have severely distorted the cost of pharmaceuticals and lifesaving therapies, driving up the price for patients and employers alike,” he concluded. “PBM reform is the way to drive down costs.”
The last word: “There is ultimately a human cost to anything that slows or halts biopharmaceutical manufacturers’ work to develop new treatments or expand production and make those treatments more widely available,” said Timmons. “Americans’ quality of life will suffer—or they may even lose their lives—because a new treatment was not available in time.”