Study Analyzes Potential Impact of Drug Pricing Proposals

April 16, 2021

Congress is once again turning its attention to drug pricing, including the proposed use of foreign reference pricing models. Foreign reference pricing was part of the Lower Drug Costs Now Act passed by House Democrats in 2019 (also known as H.R. 3) and has resurfaced in legislation, the Prescription Drug Price Relief Act, recently introduced by Senator Bernie Sanders (I-VT). 

These types of drug price control mechanisms pose a significant threat to our biopharma/biopharma ecosystem and  threaten innovation that brings new treatments and cures to patients.

 The Council of State Bioscience Affiliates (CSBA) has released a new study by Vital Transformation that examines the negative impacts of H.R. 3 and Reference Pricing. The study focused on how the industry and drug development would be impacted by a bill such as H.R. 3 if it had been in place from 2009-2019.

Key Findings

• Up to 68 approved innovative therapies that were developed by small / emerging biotechs during that timeframe would have been reduced to only 7, leaving critical health care gaps for millions of Americans.New medicines for some of the most difficult conditions to treat, including in rare diseases, oncology, and neurology, would be disproportionately impacted.
•  Biopharmaceutical industry job losses alone would total nearly 191,000, with total job losses across the economy of more than 950,000 when indirect effects are included.  
• These losses would be triggered by a sharp drop in U.S. biopharmaceutical industry earnings (a 62% reduction, or $125 billion in 2024 alone) as a result of such policy, leading to large reductions in established companies’ ability to invest in small and emerging biotechs, chilling drug development and forestalling treatments and cures for patients.

BioUtah continues to oppose sweeping drug pricing control mechanisms, such as foreign reference pricing, that would derail U.S. drug innovation and development, impede investment in biotechnology startups and limit patient access to and choice of new ground-breaking medicines.

View study HERE.

View CSBA press release HERE.