A new study shows drug price-fixing policies will do more harm than good for America’s health care system. That is especially the case here in New Hampshire, where We Work For Health and Vital Transformation estimate 3,096 will be lost in the state over the next decade under price control regimes.
Also troubling, there would be 237 fewer FDA approvals for new medicines. These are not common everyday drugs of which there are a variety of brands, but rather medications for patients battling cancer, neurological, and rare and infectious diseases.
“One word: Sad,” said Beverly Goodell, executive director of the Lupus Foundation of New England. “The Bay State could face a total job loss of up to 78,000, and we have no idea how many of those lost jobs are held by New Hampshire residents.”
The recently-passed Inflation Reduction Act (IRA) includes drug price controls, and President Joe Biden’s Fiscal Year 2024 budget allows Medicare to set prices for specific drugs five years after FDA approval. Sens. Maggie Hassan and Jeanne Shaheen also included similar language in their so-called SMART Prices Act, as well as the Lowering Drug Costs for American Families Act in the House.
Neither Hassan nor Shaheen would respond to requests for comment about their stance on government-controlled drug pricing.
“I am a New Hampshire citizen, so this is near and dear to me,” Dan Leonard, We Work For Health executive director, told NHJournal. “It would really be damaging to the overall ecosystem for the research development and implementation of new cures, new therapies, new medicines.”
Researchers at Vital Transformation modeled the impacts of expanded government-mandated drug pricing policies five years after FDA approval. The study analyzed the reduction of new drug approvals and loss of jobs if those policies or others similar to them were enacted into law. Besides job loss and fewer drugs, more than 80 currently available therapies of 121 identified for price setting would likely not have been developed had the pricing provisions been in place before their development.
Andrew Cline, president of the Josiah Bartlett Center for Public Policy, agreed that price controls on pharmaceuticals would have predictable negative effects on future generations. Cline compared price controls to a filter placed over the flow of innovative new drugs.
“You don’t know which potentially life-saving drugs you’re going to filter out, so they never get developed,” said Cline. “You do know that some amount of innovation won’t happen because it won’t get funded, (so) you just have to cross your fingers and hope it’s not the innovation that could save your life or the life of a loved one someday.”
Still, supporters of price controls say we cannot keep going down the same path. House Democrats behind the Lower Drug Costs for American Families Act say pharmaceutical price gouging must be reined in because the cost of medications is “skyrocketing” and undermining the health and financial security of American consumers who are “routinely forced to pay far more for the same drugs as people in other countries.” Meanwhile, House Democrats say they will not be deterred by Republican threats or Big Pharma’s lawsuits.
Nicole White, executive director of Rare New England (RNE), an organization dedicated to serving the region’s rare disease community, finds the trend toward government price controls worrying.
“How many of those new treatments would have been used to treat a rare disease state?” said White. “Taking this away from our community would be heartbreaking on many different levels.”
In addition, White said every new public policy comes with trade-offs. In this case, we could lose New Hampshire jobs and life-saving drugs. White does not think this trade-off was worth it. When asked what might be a better approach, White said we should rein in drug market middlemen who artificially drive up the costs of prescriptions for Americans with rare diseases.
“This community goes through enough, and naturally, it is those who aren’t directly affected by these changes who see no harm in any of this,” said White. “It’s time to consider the individuals and look at the big picture.”
All things considered, We Work For Health believes it is critical that New Hampshire’s Congressional delegation takes into account the existing unintended consequences of the IRA – and to ensure similar policies are not supported before the consequences of the current law can be fully understood and corrected.
