State and federal business leaders say drug price controls will hurt patients

State and national business leaders are warning of the negative consequences of the Biden administration's plan to impose price controls on several drugs covered under Medicare prescription insurance. The White House last week announced the first 10 drugs that would be subject to price caps.

The administration is selling its plan, included in the Inflation Reduction Act, as a way to save seniors money on their prescription drugs. But Danny Seiden, president and CEO of the Arizona Chamber of Commerce and Industry, says the White House is ignoring the negative impact the new price caps will have on innovation and access to new drugs and treatments.

“Pharmaceutical research, development and manufacturing are expensive, risky endeavors with no guarantee of success,” he said. “Telling pharmaceutical companies that the government will decide whether they get their investment back is a recipe for these innovative companies to forgo developing new products that could change – and even save – the lives of millions of people.”

Jay Timmons, president and CEO of the National Association of Manufacturers, reiterated NAM's opposition to the plan.

“The Department of Health and Human Services' price controls on breakthrough drugs harm innovation and slow the development of needed therapies and cures by hindering manufacturers' ability to develop new medicines and treatments,” he said. “America has led the way in medical and scientific breakthroughs in the fight against the most devastating and serious diseases and conditions. There are so many more diseases we must find a cure for – cancer, juvenile diabetes and Alzheimer's, to name just three – and this price control system threatens our ability to do so.”

Mandates, no negotiations

Seiden and the Arizona Chamber and Arizona Manufacturers Council have expressed opposition to government-imposed price controls since the introduction of the Inflation Reduction Act.

Seiden said the government's description of price controls as a “negotiation” ignores the negative impact they would have on patients.

“When you call something a negotiation, it implies some give and take, but there is none of that here. It's about command and control,” Seiden said. “Patients need to understand that if the government lowers the prices of certain drugs, drug manufacturers will be forced to make up for their losses by raising the prices of other drugs or scaling back their research and development on other therapies. When the White House presents its plan as one where there are only winners, it ignores the fact that many patients will ultimately lose out.”

The latest example of drug price controls from Washington

Seiden says drug price controls are just the latest example of Washington jeopardizing America's position as a leader in drug innovation.

Citing price concerns, the Biden administration also wants to use an existing law to force pharmaceutical companies to license their innovations to other companies. However, under the law, known as the Bayh-Dole Act, the government's ability to force additional licenses is strictly limited to a few circumstances, none of which include price.

“This administration's willingness to abuse an existing law to impose its pricing systems on drug manufacturers is an insult to the patients whose lives depend on the breakthrough innovations of our nation's pharmaceutical companies,” Seiden said. “It's as if this White House has no problem adopting a European-style drug pricing model, even though it has been proven to result in fewer new treatments and fewer clinical trials.”

A coalition of the U.S. House of Representatives and Senate called on the Biden administration in May to withdraw its Bayh-Dole proposal, calling it a “radical departure” from “precedent under Republican and Democratic presidents.”

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