House Republican leadership on Thursday warned that America’s predominant status as the world leader in developing new medicines is now in “jeopardy” due to the Biden-Harris drug price negotiation scheme.
Speaker Mike Johnson (R-LA), House Majority Leader Steve Scalise (R-LA), House Majority Whip Tom Emmer (R-MN), and House Republican Conference Chair Elise Stefanik (R-NY) issued a joint statement after the Biden-Harris administration released the results of the their drug price negotiation scheme, which was mandated by the Inflation Reduction Act. Essentially, the Centers for Medicare and Medicaid Services (CMS) selected ten drugs covered under Medicare Part D to be negotiated with pharmaceuticals, which the Biden-Harris administration claimed would result in $6 billion in savings on these ten drugs.
Joe Grogan, the former director of Trump’s Domestic Policy Council, told Breitbart News that the alleged savings of this price negotiation are “totally bogus.”
Many outlets such as Politico have noted that it may be hard for the Harris campaign to tout these alleged savings as a victory, as pharmacy benefit managers (PBMs), rebates, out-of-pocket caps, and other aspects already help reduce prices for the cost of prescription drugs. The Biden-Harris touted savings come from negotiating down from the drug’s list price; Americans do not pay the list price for drugs.
House Republican leadership contended in their statement that the negotiation scheme, like all price fixing schemes, would not work and may jeopardize America’s ability to be the leader in producing pharmaceuticals:
Two years after the passage of Congressional Democrats’ failed Inflation Expansion Act, Americans continue to feel the disastrous effects the law has had across our economy.
Among the most egregious provisions of the law is the mandate from bureaucrats to artificially set prescription drug prices, which is already doing untold damage to the American health care system. Patients are seeing fewer choices, higher prices, and fewer cures, while the American pharmaceutical industry — which currently leads the world in the development of new medicines — is now in jeopardy of losing its competitive advantage on the rest of the world.
Make no mistake, price fixing has failed in every sector and in every country where it has ever been tried. The Biden-Harris Administration says it wants to lower prices for families, but their prescription drug price fixing scheme has accomplished just two things: driving up health care costs and crushing American innovation in medicine.
The Ways and Means Committee, led by Chairman Jason Smith (R-MO), has documented many of the ways that the Inflation Reduction Act has limited America’s ability to create the next generation of cures.
The Congressional Budget Office (CBO) noted, “The [IRA’s drug provisions] would increase the launch prices for drugs that are not yet on the market relative to what such prices would be otherwise.”
“The IRA has set up a disincentive for pursuing any follow-on indications for an Orphan drug. Historically, that’s been the model… some of the best cures out there are repurposed from a different initial indication,” Frank Watanabe, the CEO of Arrcutis Therapeutics, said during a committee field hearing in July. “Companies are not pursuing those follow-on indications anymore precisely because [of] the IRA. Every day that this disincentive is in place is days that new innovations aren’t being developed for people who are suffering from rare diseases.”
Darius Lakdawalla, PH.D., USC Schaffer said during a May 10 hearing, “It’s likely there will be reduction in innovation in rare disease because follow-on indications are now potentially penalized under the IRA. It’s also the case more generally there will be reductions in incentives to innovate. It’s notable though that rare disease often features very high unmet need for patients. And as an economist, I can tell you that means the value of any given health improvement is great because patients have so little health that even a given relatively little modest amount of health can be quite valuable.”
The Ways and Means Committee also noted that the IRA will lead to, according to research from the University of Chicago:
- 135 fewer new drugs
- 188 fewer new indications
- $663 billion drop in innovative research and development
Research from Vital Transformation stated:
- 135,900 fewer direct biopharmaceutical jobs
- 676,000 fewer jobs across the U.S.
- 70% of clinical trials are run by small businesses
Chairman Jason Smith explained in a statement on Thursday:
The truth is that while Joe Biden and Kamala Harris are taking a victory lap today, tomorrow’s seniors will see themselves priced out of their health care, with only the wealthiest Americans able to afford new cures, and future cures will never reach those who need them. Research and development of new drugs have already started to slow in the two years since Democrats passed the IRA, and once these price controls are firmly in place, we will see an even greater harmful impact on drug access and innovation.
He added, “The Ways and Means Committee will keep fighting to ensure that American patients, not federal bureaucrats, decide the future of their health care.”
Sean Moran is a policy reporter for Breitbart News. Follow him on Twitter @SeanMoran3.
