240520 Testimony Drug Pricing Hearing Senate Judiciary Final


May 21, 2024


Dear Chairman Durbin and Ranking Member Graham:​

The U.S. Chamber of Commerce (“the Chamber”) appreciates the opportunity to share this statement for the record in advance of your Committee’s hearing entitled, “Ensuring Affordable & Accessible Medications: Examining Competition in the Prescription Drug Market.” Many of these medicines are only possible because of the tremendous ongoing medical innovation demonstrated by the business community to combat some of the world’s most debilitating diseases.

The Chamber supports efforts to help ensure every American has equitable access to life-saving medicines. For that reason, we are concerned about efforts to pursue policies that would lead to fewer life-saving drugs and decrease access to treatments for Americans. The Administration is advancing an agenda that harms innovation, misconstrues the respective roles of public and private funding of science, research, and development, and upends the successful legal frameworks that facilitate public-private partnerships. These counterproductive policies restrict both intellectual property (“IP”) commercialization, and the pipeline of new medicines, treatments, and cures.

As will be discussed in more detail, a recent Chamber report demonstrates that these policies may reduce clinical research for new treatment and cures by 75%. The Chamber’s concerns with this hearing can be summarized in three main points:

1.     Analysis and research demonstrate that market-restrictive, anti-innovation policies such as price controls deter future innovation, inhibit patient access, and ultimately limit patient choice;

2.    Efforts by this Administration to use march-in rights would radically alter and undermine America’s innovation ecosystem, thwarting American technological leadership and the ability of Americans to access the next generation of innovative technologies and cures; and  

3.    Policies being considered by the United States Patent and Trademark Office (“USPTO”) which target the life-science industry have failed to identify a problem, are not supported by independent, objective, and verifiable facts, and if implemented, would upend current patenting practices that support life-science innovation, economic growth, and patient choice.

The Chamber’s concerns are outlined in more detail below.

I.  Market-restrictive, innovation killing policies, such as price controls, have a negative impact on private businesses and result in reduced patient access to new, innovative, and life-saving medications.

Reducing barriers to access has long been a health policy priority and focus for Congress and the business community. The Chamber supports appropriate, effective efforts to help mitigate obstacles that patients might face in accessing and affording life-saving medicines. However, government price setting, when coupled with other anti-innovation policies, will create additional significant access challenges for American patients. ​

In March 2023, the Chamber released its Patient Access Report, Phase 1 (“phase 1”).[1] The Chamber’s Phase 1 Report cautions that the IRA’s drug pricing will harm patients by causing them to forfeit early and extensive access to the best life-saving medications. The Report’s methodology shows that in other Organization for Economic Cooperation and Development (“OECD”) countries which have implemented price controls, patients see fewer overall biopharmaceutical product launches, including biologics and oncology products, and have delayed access to medicines.[2] ​

For example, prior to the enactment of the Inflation Reduction Act’s (“IRA”) price controls, out of 104 new oncology products released globally, 80% were US Food and Drug Administration (“FDA”) approved and made available in the U.S., while only 58% of those new medicines were similarly available in Europe. Unlike the United States, in several benchmark countries, patients often wait up to several hundred days to receive access to life-saving treatments, waiting an average of 133 days (about 4 and a half months) in Germany and up to 500 days (about 1 and a half years) in Spain. This work highlighted how the IRA threatens market availability of and patient access to these new medicines.

The second phase of the Chamber’s Patient Access Report, which was released on February 1st, further confirms the adverse impact that price controls will have on the ability of American patients to access new medications. Phase 2 suggests that the IRA will have a highly negative impact on the number of products developed and/or launched in the US—in the range of 29% to 44% fewer products, some of which could be life-saving scientific advances for rare diseases and cancers, among other disease areas. Significantly, these estimates are in line with other research conducted on the potential impact of the IRA on life sciences research and development (“R&D”). ​

For example, in June 2023, the health economics research consultancy Vital Transformation estimated that the IRA could, over a 10-year period, result in a reduction of 40% in approvals from the FDA. Similarly, a 2021 University of Chicago research paper estimating the impact of HR 5376—the draft bill that became the IRA—found that life sciences R&D spending was likely to fall by 18.5% and that this cut in investment would result in 135 fewer new medicines being developed.

The adverse impact of price controls on life-science innovation isn’t just limited to the ability of patients to access new medicines but might halt scientific advances altogether. Research from the Chamber also shows that price controls decimate clinical research, particularly clinical research in cutting edge therapies. The Chamber’s research, From Groundbreaking Innovation to the Emergence of Research Deserts (“Research Deserts”), shows that the IRA’s price controls and the potential threat of march-in rights could reduce clinical research for some treatments and cures by as much as 75%.[3] 

​ The Research Deserts report compares levels of clinical research between the United States and a sample of developed, major OECD economies that have historically imposed varying degrees of national price controls and other artificial cost-containment measures on the biopharmaceutical sector.  Notwithstanding their comparable scientific and technological strengths, rates of clinical research and life science innovation in these economies have consistently lagged behind the United States. As the report demonstrates, the IRA’s imposition of price controls will threaten U.S. leadership in clinical research and development turning our life science innovation oasis into a proverbial research desert.  

Specifically, the Research Deserts report demonstrates that over time, the IRA is likely to both directly and indirectly reduce the number of clinical trials by thousands across all categories of research examined. By therapeutic field, the Chamber’s research shows this reduction could amount to 12.25% for cardiovascular diseases to 68.94% for obesity research. Clinical trials related to future early-phase research risk being reduced by close to 50% or more with, for example, research related to biologics and cancer reduced by 59.41% and 54.13%, respectively. Early-phase research related to obesity could be reduced by more than 75%. 

The Chamber’s research isn’t just hypothetical or academic: anecdotal statements made by America’s most innovative companies since the IRA’s enactment also serve as evidence that the development of new cures and treatments will suffer. Several life-science innovators have ended product research and development programs, citing the new price controls. For example, Novartis warned that the new law could discourage research in its most promising areas of study: RNA and radioligands. And Alnylam has stopped the development of a treatment for a rare eye disease due to the need “to evaluate impact of the Inflation Reduction Act.” These are but a few of the most prominent examples of the innovative, life-saving products whose realization, availability and ultimately access are ironically threatened by the IRA’s price controls that are intended to improve access.

As the Chamber’s research details, and as anecdotal evidence since the IRA’s enactment proves, the United States has been the global leader in all types of clinical research with particular strengths in areas of cutting-edge, early-phase trials and research related to cancer, Alzheimer’s disease, diabetes, obesity, cardiovascular disease, and biologics.  Additionally, American patients have also consistently benefited from having both earlier access to medications and more medications to choose from in treating their conditions. The IRA and other price controls jeopardize much of our research leadership and the ability of American patients to have choices. In addition, the IRA’s price control regime is marred by fundamental legal flaws, as the Chamber has explained in the briefs that it has filed in litigation challenging the regime as unconstitutional. Surely this outcome—fewer cures, fewer choices, and longer wait times—isn’t one that any member of this Committee supports.

The Chamber urges members of this Committee to recognize the valuable role the private sector plays in delivering new cures to patients and to reject efforts to augment harmful policies, like the misguided price controls in the IRA, which would undermine the healthcare of American patients. If anything, instead of focusing on policies which further expand price controls and harm the development of life-saving cures, this Committee should instead consider the facts, research, and evidence, including the statements by life science innovators, and repeal the IRA’s existing price controls and seek to enact policies that promote free enterprise and further patient access to life-saving medications.

Read the full letter here

[1]  See GIPC 2023 Patient Access Report, March 21, 2023, available at https://www.uschamber.com/intellectual-property/patient-access-report.

[2] The report found that fewer biopharmaceutical products overall launched in Canada, Japan, South Korea, Australia, and European Union member states than in the United States over the past 20 years.

[3]From Innovation Oasis to Research Desert How Price Controls Imperil American Medical Innovation and the Search for Cures, December 11, 2023, available at https://www.uschamber.com/intellectual-property/new-study-forecasts-devastating-impact-on-patients-and-medical-science-from-government-price-controls.

240520 Testimony Drug Pricing Hearing Senate Judiciary Final