What we know about Iowa and the State of the Union

February 4, 2020
Today’s World Cancer Day—but instead of celebrating the biopharma industry's incredible work to research new treatments and creating policy to help them get to market, policymakers continue to promote drug price controls that would harm future cures. But don’t worry,…

Today’s World Cancer Day—but instead of celebrating the biopharma industry's incredible work to research new treatments and creating policy to help them get to market, policymakers continue to promote drug price controls that would harm future cures. But don’t worry, we’ve got your back. 

Today, in addition to the latest news from the Iowa caucuses and the outlook for the general election in the state, we’re preparing for Trump’s State of the Union and bracing for announcements on an international price index and insulin. Here are approximately 700 words, which you can read in 3 and a half minutes.

What we know about the State of the Union

As we’re bracing for Trump to possibly announce new drug price controls during tonight’s State of the Union, a biopharma investor is speaking out on what an international price index would do to new cures.

What we know about the speech: Expect him to say something about drug pricing, which might be more details on the administration's international price index, and according to POLITICO PRO, an insulin plan. Meanwhile, Democrats are also focusing on the price of insulin, and planning to bring patients with high insulin bills as guests to the speech to drive home the message, reports STAT

But we’ll say it again: price controls are not the answer. And Alex Karnal, a life science investor and partner at BIO member Deerfield Management, explains in a new video how an international price index would have an “absolutely chilling” effect on investments in risky cures.

What they’re saying: “Under the proposed plan, we have to take a lot of risk up front, but there’s great uncertainty in terms of what price we can realize downstream. The consequence of that is that we just won’t be able to take the types of risk we can that lead to the transformational medicines that we need for tomorrow,” he says

So, how can we lower drug prices? “We need the drug companies, we need the insurers, we need these middlemen that set prices, called the PBMs, and we need key government officials to come together and derive a holistic solution to treat the disease, versus using foreign reference pricing as a scheme to focus on a single symptom,” he concludes.

Tom’s Take: “Alex Karnal’s comments underscore the severe impact price controls would have on the investor community’s ability to invest in the future of science and innovation. In the face of new health challenges like the spread of coronavirus, it’s important to keep in mind how the biopharmaceutical investment pipeline works, and why we need policy to both drive innovative cures and help patients afford them. An international price index won’t do either – and in fact will only hurt patients in the long run.” – Tom DiLenge, president of BIO’s Advocacy, Law & Public Policy Division

If you don't already, be sure to follow Tom on Twitter @TomDilenge for insights on key biotech policy issues. 

What we know about Iowa

We still don’t know who won the Iowa caucuses, but we do have some news from the Hawkeye State: Iowans are angry Trump undermined the biofuels industry, which gives an opening to whoever ultimately wins the Democratic nomination, reports Reuters.

The Renewable Fuel Standard (RFS) requires refineries to include a certain percentage of renewable fuel like biofuels in the mix to reduce our dependence on fossil fuels. 

However: “Over the past two years, the U.S. Environmental Protection Agency (EPA) has granted more than 30 waivers to [biofuel] refineries, including facilities owned by Exxon Mobil and Chevron Corp, stoking the ire of farmers and spurring numerous meetings in which the White House has tried to placate growers’ anger,” says Reuters

It’s especially hurt Iowa, the #1 ethanol-producing state, causing biofuels facilities to stop production, eliminate jobs, and even shut down entirely due to the waivers, making things even more difficult for farmers and rural economies already hit hard by the U.S.-China trade war. 

What they’re saying: “In a speech last month to farmers in Texas, President Donald Trump won applause as he talked up recent U.S. trade agreements. When he tried to boast of his administration’s ethanol policy, however, he was met with silence,” says Reuters.

What it means for the election: Iowa went for Trump in 2016, but between biofuel policy and the trade war, it’s entirely possible the state could go for the Democrat in November. 

Who will that be? Oh, we’ve got a long way to go. As of this writing, Iowa’s not reporting an official winner, though it’s likely to be a tight race between Sanders, Warren, and Buttigieg, with Biden, Klobuchar, and possibly Yang hanging in there, too. 

What BIO’s doing: We’re continuing to push for low-carbon fuel standards and biofuels policy that supports farmers, the biofuels industry, and a renewable energy future, whoever wins.

BIO Beltway Report

President Trump’s Tuesday: Preparing for the State of the Union at 9:00 PM ET, at the Capitol, in the middle of the impeachment trial. Awkward.

What’s Happening on Capitol Hill: Same as above. We’ll have our analysis tomorrow.

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