Proposed drug price controls will rip apart the thriving U.S. biotech ecosystem, Vital Transformation CEO Duane Schulthess said during yesterday’s online briefing about new research on the impacts of the bill.
Income lost, by the numbers: Revenues for a cohort of 20 therapies with price controls would drop by $82 billion in 2031 as the 12 companies making those therapies lose an average of 55% of earnings, Vital Transformation found.
These losses are greater than Congressional Budget Office (CBO) projections, because, as happened in Europe, politically motivated bureaucrats will seek prices below the maximum allowed in the legislation, without regard for impacts on the industry, Schulthess said.
PBMs untouched: While drug makers receive less for their products, pharmacy benefit managers (PBMs)—middlemen who demand discounts for including therapies covered by insurers—are not impacted by the bill, and they are unlikely to change their demands even as revenues shrivel.
Development tanks: With returns slashed, investors will back less drug development, meaning therapies to address antimicrobial resistance and rare diseases will be abandoned, Schulthess said.
The U.S. biotech sector will be decimated. Just as Europe lost its biotech dominance to the U.S. in the 1990s, the U.S. industry will wither while China draws all the investment, he predicted.
What’s next? Once all Senate Democrats are healthy enough to attend and the bill is introduced, the Senate is expected to go through several days of amendment proposals in a mostly symbolic “vote-a-rama,” said BIO Chief Advocacy Officer and EVP Nick Shipley. Senate passage is possible as soon as early next week, he said.
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Read more: Democrats’ Price Control Scheme is a Surrender in the Fight Against Cancer
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