As drug makers pull out of a U.K. drug price control scheme and balk at French and German clawbacks, the Wall Street Journal Editorial Board sees “a lesson from Europe for America on how price controls reduce access to treatments and cures.”
The news: AbbVie and Eli Lilly announced last week they will leave the U.K.’s “voluntary” drug pricing scheme, which caps government growth in drug spending at 2%. Inflation and COVID-driven increases in demand mean meeting the cap requires drug makers to give rebates of 26.5% on 2023 revenues.
Europe’s drug price controls reduce access: “About 85% of new medicines launched between 2012 and 2021 were available in the U.S., compared to 61% in Germany, 59% in the U.K. and 52% in France and Italy,” says the Wall Street Journal Editorial Board.
And they harm R&D, as drug makers cite price controls when they pull products and research operations from Europe, explains the WSJ.
The outlook: “The U.S. has drawn more pharmaceutical investment amid Europe’s war on drug makers, but this may not continue,” the WSJ warns, as price controls threaten to drive drug companies from the U.S., too.
The U.S. still dominates biopharma R&D—and was solely responsible for 61% of medicines approved by the Food and Drug Administration (FDA) between 2011-2020. But now, China is catching up.
BIO’s take: “The U.S. biopharmaceutical industry is the world leader when it comes to bringing new cures to patients in the U.S. and other countries,” says John Murphy, BIO’s Chief Policy Officer. “But to maintain that innovation and ensure patients can access these cures, we need policy that encourages R&D and market entry of new drugs.”
More Reading: Who invents new drugs? (Spoiler: We do.)
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