Good Day BIO: Price negotiation? Try price ‘extortion.’

There’s a lot to unpack from yesterday’s Senate Finance hearing on drug price controls—here are the facts (and a few tired myths). Also, BIO member LanzaTech testified yesterday on how the government can support biotech solutions and BIO’s Dr. Cartier Esham will testify today on PDUFA riders. (832 words, 4 minutes, 9 seconds)

Price negotiation? Try price ‘extortion.’

Senate Finance heard testimony yesterday on “prescription drug price inflation”—including myths and facts about how price controls would impact U.S. medical innovation.   

The system is “broken” and drugs are overpriced,said Committee Chair Ron Wyden (D-OR) to open the hearing. As our readers know, we agree the system is broken but not because of the many biotech companies working every day to bring us life-saving breakthroughs like the COVID vaccine. 

Fact: Build Back Better's drug pricing provisions would lead to fewer drugs and a “competitive edge” for China,said Ranking Member Mike Crapo (R-ID). He called instead for the Lower Costs More Cures Act, which would cap insulin at $35 and set an out-of-pocket cap for Part D beneficiaries. (Sen. Wyden called for similar caps, too.)

“‘Price extortion’ would be a more honest label for this provision than ‘price negotiation,’" said Douglas Holtz-Eakin, President of the American Action Forum, of proposed price controls. A new drug requires about 10 years and $3 billion to develop, he explained. “If you cut off the pay-off to develop those drugs, you will get less drug development.”

“Over the past two decades, drug companies in America have delivered just under half of the world’s new drugs,”said Stephen J. Ezell, VP, Global Innovation Policy Information Technology and Innovation Foundation. “Life sciences companies depend on revenues earned from one generation of innovation to finance investment toward the next generation of innovation. Yet drug price controls constrain the ability to earn those revenues.”

Watch witnesses explain why drug price controls will harm R&D and innovation.

Myth: Price controls can combat inflation. “Drug prices contribute only 1.4 percent of price increases in the CPI,” said Holtz-Eakin.

Myth: Most “breakthroughs” come from taxpayer-funded research, per Boston University’s Dr. Rena Conti. The truth? NIH is a valued partner in funding basic research—but drugs need significant private investment to get to market, according to a recent study.

We also can’t talk about drugs without talking about the antibiotic pipeline. Sen. Michael Bennet (D-CO) raised the need for The PASTEUR Act, which would create incentives for the development of new drugs to address antimicrobial resistance (AMR).

More Reading: “We need to invest in AMR pandemic preparedness before we reach the breaking point where we can no longer defeat infections,” writes U.S. Rep. Drew Ferguson (R-GA) in The Washington Times.

More Health Care News:

Kaiser Health News: COVID’s ‘silver lining’: research breakthroughs for chronic disease, cancer, and the common flu
“Researchers see promise in mRNA to treat cancer, cystic fibrosis, and rare, inherited metabolic disorders, although potential therapies are still many years away.” 

STAT News: With infections spiking in Europe and a variant on the rise, experts warn the U.S. could face a COVID resurgence
“Most people who are up to date with their COVID-19 shots remain strongly protected against severe outcomes.”

LanzaTech makes the case for government support for innovative biotech

Biotech has a big role to play in the development and deployment of climate and energy solutions—and yesterday, the House Committee on Science, Space, & Technology Subcommittee on Energy heard how government can support bioenergy R&D, with testimony from BIO member LanzaTech.

Meet LanzaTech, which uses “biocatalyst—a bacteria or microbe—which metabolizes carbon and produces useful chemicals,” to capture and reuse carbon to develop sustainable fuels and consumer goods, said LanzaTech VP of Government Relations Laurel Harmon in her testimony. 

The government has a role in many stages “from basic research to scale up and commercialization,”she explained. Notably, the Dept. of Energy’s Bioenergy Technologies Office and Office of Science, as well as the Advanced Research Project Agency - Energy (ARPA-E) have supported LanzaTech in various projects.

An excellent case study in public-private collaboration: LanzaTech’s work with the Pacific Northwest National Laboratory (PNNL). “LanzaTech developed the ethanol-based ATJ (alcohol-to-jet) technology platform in collaboration with PNNL,” using a combination of private and federal support.

Harmon’s recommendations:

• “DOE funding is needed throughout the technology development timeline—from basic research through commercialization.”
• DOE should have the tools to “accelerate the pace of project selection and execution.”
• A real clean energy transition requires replacing fossil-fuel carbon in all products, not just fuels.
• All waste carbon should be used to replace fossil fuel inputs. 

“We need to address and discuss sustainable feedstocks, and how to best increase the global supply of alternative fuels,”agreed Rep. Sean Casten (D-IL). Rep. Casten went on to ask Dr. Harmon what policies are needed for greater Sustainable Aviation Fuel (SAF) production. One option Dr. Harmon highlighted is the SAF blenders tax credit.

Now, LanzaTech’s going public—merging with a special purpose acquisition company, Reuters reported earlier this month. The deal would value the company at $2.2 billion.


More Agriculture & Environment News:

In case you missed it: During yesterday's House Agriculture Committee's hearing, "A Review of the Farm Bill: The Role of USDA Programs in Addressing Climate Change," Ranking Member GT Thompson (R-PA) noted, "American agriculture is science. It's technology. It's innovation. The demands of a 21st-century farm economy—and economically viable climate solutions—depend on the tools and policies that continue to unleash and increase U.S. productivity." 

President Biden’s Thursday: An official visit by Irish Prime Minister Micheál Martin was called off after Martin tested positive for COVID-19. The meeting was part of a series of events planned for St. Patrick’s Day.

What’s Happening on Capitol: BIO’s Chief Scientific Officer Dr. Cartier Esham will testify before the House Energy & Commerce Health Subcommittee during a hearing, The Future of Medicine: Legislation to Encourage Innovation and Improve Oversight (10:30 AM ET), which will look at Prescription Drug User Fee Act (PDUFA) riders. We’ll have a recap tomorrow.