Democratic lawmakers in recent weeks have begun to advance an argument long seen as something of a third rail in U.S. politics: that slightly less biomedical innovation might be worth a dramatic reduction in drug prices.
The surprising candor has come amid pushback to House Speaker Nancy Pelosi’s high-profile drug pricing bill, which the trade group PhRMA this month said represented “nuclear winter” for the development of new medicines. Some Democrats, in response, have attempted to reframe the discussion in purely utilitarian terms, asserting that dramatically lower costs now justify a marginal reduction in new treatments in the coming decades.
“Three hundred forty-five billion dollars in savings versus the cost of eight to 15 fewer drugs over 10 years,” Rep. Darren Soto (D-Fla.) said at a recent hearing before the House Energy and Commerce Committee. “I frankly think it’s worth it.”
It is unclear whether a majority of Democrats buy into Soto’s logic. But his words and those of other lawmakers represent a subtle yet significant messaging shift for members of Congress who have long insisted their drug pricing plans would not impact the development of new cures. Democrats’ new argument, effectively, amounts to a gamble that voters care more about the cost of existing drugs than developing a hypothetical few new treatments far in the future, and underscores just how politically urgent the push to lower drug prices has become.
Soto’s comments reference a recent analysis by the Congressional Budget Office, which projected that Pelosi’s bill would save taxpayers $345 billion in the next decade and cost the drug industry as much as $1 trillion in revenue. The analysis predicted drug companies would therefore invest less in research, leading the number of new drug approvals could fall between 2.6% and 5%.
Nonetheless, widespread outcry about drug prices appears to have changed the calculus for numerous Democrats. While any reduction in new drug development might once have horrified lawmakers, many have now proven willing to advocate for the legislation on its merits, impact to innovation or not.
“About 97% to 95% of new drugs would still come to the market” under Pelosi’s plan, Rep. Anna Eshoo (D-Calif.), the House Energy and Commerce health subcommittee chair who represents a biotech-heavy Silicon Valley district, said at the hearing. “I wish it were 100%. … I wouldn’t have my name on the bill if I thought we were going to kill innovation in our country.”
For policy experts outside Washington, it’s a refreshing admission — even if it relies on dubious data.
“I think it’s actually good that there’s this acknowledgment you’d be sacrificing something,” said Stacie Dusetzina, a professor of health policy at Vanderbilt University. “It’s just hard to know exactly what you would be sacrificing.”
Dusetzina and others were quick to caution that pitting innovation against affordability is often a false choice, emphasizing that many new drugs do little to advance standards of care. Pelosi’s bill, she said, is unlikely to cap the price of innovative new drugs targeted at small patient populations.
Other lawmakers, however, rejected the suggestion that price reductions would result in less innovation, arguing that companies can and should reduce non-research spending perceived as excessive before cutting into their drug development endeavors.
“The CBO analysis did not consider the role of stock buybacks, the role of excessive executive compensation,” Rep. Ro Khanna (D-Calif.), whose district borders Eshoo’s, said in an interview. “There are corporate reforms that can be undertaken that would not trade off innovation.”
The numerous biotech companies in Khanna’s district, he added, have not contacted his office to object to Pelosi’s bill.
Democrats have also argued that reductions in private-sector innovations could be offset by the billions of dollars the bill would redirect to the National Institutes of Health. While each of the 210 new drugs approved in the U.S. between 2010 and 2016 relied on NIH research at some stage, the timetable for translating new basic science funding into new drug development could stretch decades.
Republicans, meanwhile, have responded to the debate with glee, nicknaming the legislation the “Fewer Cures for Patients Act.” Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said last week the bill is predicated on a “dangerous trade-off for the American people.”
Already, one outside group has used Pelosi’s legislation to target vulnerable Democrats, arguing in television ads that “in other countries, lifesaving drugs aren’t available.” The campaign is targeted at 22 congressional districts and is funded by the American Action Network, which in 2017 received $1.5 million in funding from PhRMA.
Patient groups have also begun to express concerns, including the industry-funded advocacy organization Patients Rising.
“I respect the willingness to see it for what it is,” said Terry Wilcox, the group’s executive director. “But what if you’re the patient who’s waiting for the drug that doesn’t get through, because it’s being developed by a small biotech that’s going to drown? I’m not willing to take that risk.”
While Republicans have strenuously objected even to a marginal decrease in private-sector research investment, PhRMA and some economists have cautioned that the decreased revenue could lead to as many as 100 fewer new cures. Developing a new drug typically requires longer than a decade — meaning CBO’s 10-year projection likely doesn’t account for longer-term impacts.
The prediction of eight to 15 fewer drugs in the coming decade relies on a 2015 study showing that developing a single new drug relies on $2.5 billion in additional pharmaceutical industry revenue. The estimate, however, is unlikely to hold up when scaled to the Pelosi bill’s potentially $1 trillion impact, said Craig Garthwaite, a professor who directs the health care program at Northwestern’s Kellogg School of Management.
“They’re trying to answer a question that is almost impossible to answer,” Garthwaite said. “Are we providing too strong an incentive to innovation today? That’s the question you have to ask.”
The legislation’s mechanism for negotiating drug prices, in which the health secretary would choose between 35 and 250 drugs for negotiation each year, might also add enough unpredictability to spook venture capitalists, Garthwaite said. He also agreed with PhRMA’s assessment that Pelosi’s legislation could have a negative impact on innovation for conditions with large patient populations but no existing cures, like Alzheimer’s.
Arguments about how many new drugs might never come to market might also fail to account for the new treatments’ value, said Rachel Sachs, a law professor at Washington University in St. Louis who focuses on intellectual property and health care. Under Pelosi’s legislation, she said, drug companies would be less likely to focus on “me-too” drugs that aim mainly to compete with an existing treatment. Rep. Donna Shalala (D-Fla.) said similar.
“I think it actually will reduce me-too drugs,” said Shalala, who served as health secretary under President Bill Clinton. “I think [pharmaceutical companies] are going to clean their portfolios. … I think that they’ll become more efficient.”
Besides, Sachs argued, any debate regarding access to future drugs is incomplete without acknowledging the millions of American patients who struggle to afford medications that taxpayer-funded researchers and drug companies jointly spent billions to develop.
“It’s important to think not just about new drugs we have in the future, but how many people today don’t have access to drugs that have been on the market for years,” Sachs said. “What are we giving up when these prices don’t fall after decades of availability?”