Innovation, not Pelosi’s radical price controls, will lower drug costs

Innovation, not Pelosi’s radical price controls, will lower drug costs

From a Houston Chronicle Op-Ed by Dan Crenshaw.

Crenshaw: Innovation, not Pelosi’s radical price controls, will lower drug costs [Opinion]

February 26, 2020

Susan was diagnosed with breast cancer on Oct. 13, 1989 at the age of 35. A devoted wife and mother of two sons, she was a strong Texan.

When the doctors at MD Anderson Cancer Center told Susan that the cancer she was facing was particularly aggressive and that she would not live beyond five years, she did not fall into despair. She endured six rounds of chemo, radiation treatments, countless surgeries, all the while retaining her humor and optimism.

When a clinical trial of a new drug called Taxotere became available, Susan raised her hand to be patient No. 1. While the initial results were promising, the research for the drug was in its infancy, and ultimately Taxotere was unable to save her life.

Susan Carol Crenshaw — my mother — died when I was 10 years old. My mom knew that this clinical trial would mean a small extension on her life at best. She knew that Taxotere would not ultimately save her life, but that her trial would provide doctors like Peter Ravdin — who led the clinical trial — the scientific research they needed to improve the drug and save the lives of others.

Taxotere is now one of the most successful breast cancer treatments available, thanks to the invaluable research following my mom’s trial. Last week, I presented Dr. Ravdin an award in my mom’s name at my second annual Health Care Innovation Summit at Rice University.

The summit celebrated something that is characteristically American: the spirit to discover, create and innovate. We heard from remarkable Texans who are tirelessly innovating the next great breakthrough to deliver hope to patients and families across the country.

But the same innovation we celebrated in Houston is coming under threat because of policies in Washington.

Two things can be true at once. First, health care is far too expensive in the United States. Second, American innovation in the health care space is absolutely critical for ensuring that medicine continues to advance. But the recently proposed drug pricing legislation from House Speaker Nancy Pelosi, H.R. 3, sacrifices the discovery of future cures. How? By instituting radical price controls on new drugs.

The estimated impacts of Pelosi’s plan vary. The Congressional Budget Office says that the legislation will result in 30 fewer drugs over the next decade. The White House Council for Economic Advisers says 100 fewer drugs will be available. The California Life Sciences Association estimates that H.R. 3 would reduce by 88 percent the number of drugs brought to market by small health care innovators in the Speaker’s home state of California.

The truth is, we do not know how many drugs will be lost. But we do know that one fewer cure is one too many. The next great breakthrough could be snuffed out before it saves a single life.

Why will this happen? H.R. 3 would institute price controls under the misleading label of “negotiation.” If a drug maker does not agree with the price set by the federal government for a drug, they can be penalized with a tax of up to 95 percent of revenue (yes, revenue, not profit), which is terrifying to those who have ever operated a business. That is top-down hostage taking, not a negotiation, and new cures are the victim.

As revenues for pharmaceutical companies are slashed in response to price controls, research and development expenditures will also fall, sending drug companies scrambling for low-risk, low-cost projects. As Dr. Scott Gottlieb, former Commissioner of the Food and Drug Administration, noted recently in the Wall Street Journal, drug companies are going to sniff out “safer projects with lesser payoffs,” avoiding the “most speculative but highest-value science, including regenerative medicine and gene editing.” In other words, drug companies may choose to develop and manufacture just another cholesterol pill while avoiding costlier and riskier cancer research.

Thankfully, this plan for fewer drugs isn’t our only option. I believe we can lower your drug costs at the pharmacy counter and encourage the kind of innovation that cancer patients like my mom need.

That’s why I helped introduce the Lower Costs, More Cures Act (H.R. 19). This bill encourages innovation, promotes affordability of cures and stops pharmaceutical companies from engaging in unfair, uncompetitive behavior.

H.R. 19 would increase patient access to generic competition through a variety of measures, including a prohibition on the “pay for delay” agreements that pharmaceutical companies often strike with generic competitors to prevent lower-cost alternatives from entering the market.

The bill also creates the first-ever annual cap of $3,100 on out-of-pocket drug costs for seniors on Medicare Part D, and a monthly cap for Medicare beneficiaries with high drug costs to help evenly distribute expenses across the year (reducing payment shocks). The out-of-pocket costs for insulin also would be capped at $50 per month for seniors in Medicare Part D after the deductibles are paid. Targeted reforms to pharmaceutical spending provide savings to pay for the caps.

In addition to increased exposure to generic competition, our plan encourages transparency by requiring insurance companies to provide information about drug costs at the physician’s office, giving you the flexibility to “shop around” prior to receiving a prescription.

It is critical to lower your costs at the pharmacy counter — Americans pay too much for prescription drugs. It’s also critical that we preserve the spirit of innovation that has driven so much medical discovery and consequently, saved so many lives in this country. H.R. 19 implements commonsense reforms to achieve these two goals, which are not mutually exclusive.

Americans are being offered a false choice: lower drug costs or more innovative cures. Democrats in Congress want you to choose. I want you to have both.