Don’t import bad policy ideas on drug pricing

The USA is the most important market for drug development. The country has rapid scientific reviews and drug approvals and usually a quick and predictable path to reimbursement. It is therefore unfortunate that our policymakers are adopting ideas from countries that have destroyed incentives to invest in their life sciences economies and limited their citizens' access to life-changing treatments.

When we adopt these bad ideas, we also adopt their bad results. To put it more precisely: look at this over the last five years 42% of newly approved drugs in the US were not introduced in Europe; In contrast, only 6% of drugs approved in Europe are were not marketed in the USA

U.S. laws and regulations have not only increased access to medications; They have also funded billions of dollars in research drug development. For example this Benefits of Medicare Drugs Providing access to affordable medicine for older people and people with disabilities in a market-based system. This has motivated investment in the clinical development of diseases common in these populations. The number of clinical studies examining the effects of medications in children has increased significantly Laws that extended time A pharmaceutical company can market a drug exclusively if it completes pediatric research.

Investments in drug development have resulted in transformative but often expensive new medicines. In addition, the US legal framework has resulted in generics and biosimilars having a price-determining effect. The vast majority of drugs, even those with multiple patents, have a lower-cost generic available after 13-14 years on the U.S. market. The system was originally established 40 years ago with the Hatch Waxman Act and has evolved over time so that a successfully developed drug can be profitable worldwide – primarily through U.S. revenue. Then, after years, generics and more recently biosimilars come onto the market at reduced costs.

Given this well-functioning system, some policymakers have considered changing it under the false assumption that profit, property protection, and financial incentives don't matter. The Biden administration is Develop a plan to direct federal agencies to invalidate exclusive property rights for a drug based on its price. The authority to do this comes from a law that is intended to take control of drugs developed with federal funds in the event of delivery failures such as supply bottlenecks. With this plan, the administration hopes to get something for free. Undermining the patent system, particularly by confiscating patents from patent holders such as universities that receive money from the government, will make public and private collaborations toxic and reduce investment in clinical trials.

At the same time, given the success of drug development in the American and global economies, China is implementing reforms to its laws and regulations governing innovative medicines. These include expediting drug approval reviews and enabling patent term restoration, allowing a patent holder to secure additional exclusive time in the market to offset delays in drug reviews. These guidelines were introduced in the USA. While privacy concerns remain in China, companies are now headquartered there account for over a quarter of all newly started clinical trials worldwide, compared to 3% ten years ago. Many of these studies relate to drugs in the early phase, i.e. to the drugs of the future.

Drug price controls, another idea imported from other countries, limit supply. Because of the Inflation Reduction Act, price controls are implemented in Medicare. It is well known that people living in countries with price controls do not always receive the medications available in the United States often waiting a year or more Getting a new drug for cancer or other life-threatening disease because the government sets a low price or has a slow review and reimbursement process.

In addition to the IRA at the federal level, more than ten States are experimenting with their own price controlsthe establishment or consideration of price review panels and caps, a trend that has been accelerating since 2017. Pharmacies may not be able to offer medicines at a low price level because the price controls do not necessarily mean that drug manufacturers will reduce their prices to the state.

Politicians who want to exercise more government pricing power for medicines Compare drug prices in other countries to those in the United States and complain about injustice. They do not share what is lost in countries with centralized health systems that often ration access to medicines and only provide coverage after a person has become very, very sick. A recent hearing on the price of weight loss medications I forgot to mention that in Germany, Canada, Japan and other countries whose prices were seen as shining examples of great policy, health systems are not making these drugs available to the people who need them. For example, Germany does not cover obesity medicine in the public health system, where 90% of people are treated, Canada does not cover obesity medications in provincial health systems and Japan only covers obesity treatment if the person has two or more weight-related comorbidities and a very high BMI. Access restrictions are not limited to obesity medications; There are such in England significant delays in access and restrictions on medicines for serious orphan diseases.

The US has attracted scientists, clinical trials and investment in manufacturing facilities because of a unique system that allows successful drugs to be profitable for a limited period of time. This has led to cures for rare deadly diseases, the vaccines that restarted the economy during the COVID-19 pandemic, a huge increase in the life expectancy of people diagnosed with cancer, and much more. The U.S. can lean on what made it great or follow a downward spiral of short-sighted policies that many countries have pursued and effectively ruined their biopharma economies.