Sen. Chuck Grassley (R-Iowa) yesterday questioned Douglas Holtz-Eakin, former director of the nonpartisan Congressional Budget Office (CBO), on the negative affects government drug price dictation would have on cures and innovation.
Grassley has long fought to lower prescription drug prices. In 2019, as then-chairman of the Senate Finance Committee, he held three hearings on prescription drug pricing followed by a mark-up of legislation. He also co-authored the bipartisan Prescription Drug Pricing Reduction Act, which would save taxpayers $95 billion, cap-out-of-pocket costs at $3,100 for seniors, cap annual drug price increases at inflation and establish transparency and accountability for pharmaceutical companies, all without disrupting cures and innovation. While Big Pharma opposes this bipartisan effort to benefit seniors, Grassley is working every day to pass this bipartisan bill. Grassley’s bill still remains the best chance for Congress to pass bipartisan prescription drug reform.
Government Price Dictation Hurts Patients, Reduces Access and Produces Fewer Cures
Holtz-Eakin: “Directionally everyone agrees there will be fewer cures. The only debate is over how many and how innovative they might be.”
Holtz-Eakin: “The way prices are lower is the governments say no to many drugs and they are not available to their citizens.”
A University of Chicago paper found H.R.3 would lead to 342 fewer new drug approvals in the next 20 years, and reduce biomedical research and development by 60%. CBO has previously found H.R.3 would reduce the number of new drug approvals.
Government Price Dictation Would End America’s Status as the World’s Lead in Research and Development
Holtz-Eakin: “We [the United States] are the leading biopharmaceutical innovator on the globe, but that’s not a God-given right. It’s due to the incentives that are in the system and if we went ahead with these proposals, there would be less incentive for venture capitalists to fund start-ups that have generated these advances. Those start-ups often then sell them to larger pharmaceutical companies. They wouldn’t be interested in buying them because there would be no return and the innovation would dry up. It’s a real threat.”
Government Price Dictation Does Not Save Money, But Does Hurt Patient Access
Grassley: “For decades, the congressional budget office, the nonpartisan referee, has said government drug price dictation does not save money unless you restrict access to patients through limiting formulary. First, is that correct Mr. Holtz-Eakin?”
Holtz-Eakin: “Yes, that’s correct.”
CBO affirmed this in writing to Congress in 2004, 2007, 2007 and 2019.
