Advisor and Former Chief Executive Officer, U.S. Chamber of Commerce
October 21, 2019
The U.S. is the medical innovation capital of the world – but a new bill in Congress could change that.
In the next few weeks, the U.S. House of Representatives is expected to pass the Lower Drug Costs Now Act, legislation that some claim would rein in the cost of prescription drugs by allowing the government to set prices. In reality, however, this legislation would endanger the livelihoods of hundreds of thousands of Americans and cut off medical research dollars that are essential to finding cures for diseases like cancer and Alzheimer’s.
According to recent estimates, the House proposal would cost drug makers approximately $1 trillion over the next decade, forcing them to drastically reduce investments in R&amp;D. This cost-cutting would lead to fewer workers and ultimately fewer treatment options for families in need.
The U.S. biopharmaceutical industry directly employs more than 800,000 workers. And the industry supports an additional 3 million jobs in various sectors, ranging from construction (building labs) to business services (sales, marketing, and administrative support). In total, the proposal could result in the loss of over 700,000 jobs. While every state would be impacted, some would see greater job losses than others, including California, Texas, and New Jersey.
Even more troubling, this plan would likely result in Americans having access to fewer treatments. Of all the new medicines launched across the world between 2011 and 2018, 90% are available in the U.S. But many of these new drugs are not available in countries with government price controls. In fact, only 50% of these drugs are available in France, and only 46% of them are available in Canada. If this legislation were to become law, American workers who like their employer-sponsored health care plans would find they have increasingly diminished access to the latest and most innovative treatments.
This proposal, of course, isn’t bad for everyone. There is one potential winner from all of this – China. When Europe adopted price controls, investments in research and the associated benefits moved to the U.S. Now, if Congress adopts similar price control policies, those same research dollars and jobs are likely to move offshore to places like China.
This job-killing legislation would weaken American industry, in addition to limiting treatment options for millions across the country. The good news? The bill being considered in the House isn’t our only option – there are bipartisan proposals in Congress that would help lower drug costs without harming jobs, R&amp;D, and access to medication. We urge our nation’s leaders to seriously consider these commonsense solutions so that the U.S. can remain on the leading edge of medical innovation.