Maine Price Controls Will Stifle Biotech Innovation
WASHINGTON, D.C. (March 8, 2000) Nancy Myers, health care policy and reimbursement counsel of the Biotechnology Industry Organization (BIO), issued the following statement concerning legislation introduced in the Maine Legislature that would impose price controls on all drugs and biologics sold in the state. The legislation, LD 2599, will be heard today in the Joint Health & Human Services Committee.
The biotech industry wholeheartedly supports improving access to its medicines for all patients, especially for those who suffer the most and are the most in need, said Myers. However, having a state-appointed board dictating the price of all drugs sold in the state is an ill-conceived approach.
Price controls will wreak havoc on the biotech industry's ability to raise private capital to support innovative drug development and to bring life-saving medicines to patients. During the last health-care reform debate in 1993-94, proposals involving price controls and pricing boards significantly reduced private investment in biotech companies and slowed their efforts to bring new drugs to patients.
It takes hundreds of millions of dollars and up to 10 years to develop a single drug. In 1998, the biotech industry spent about $10 billion on research and development and recorded a net loss of $5 billion. Most research-stage biotech companies do not yet have products on the market. Consequently, they have no revenues or profits to fund their breakthrough research. These companies are dependent on private investors for most of their funding.
Maine is home to a vibrant and growing biotechnology industry. Governor Angus King and state lawmakers have taken strides to facilitate the growth of research-based industries. The legislation is a direct affront to that effort.
The Maine biotechnology cluster is part of U.S. industry that leads the world in developing breakthrough drugs, many of them first-ever treatments, for our most intractable diseases, such as heart disease, cancer, Alzheimer's, Parkinson's and AIDS, said Myers. No other country in the world invests more in research and development of health care products. The U.S. will continue to hold that leadership position as long as its universities and industry work together to bring promising research from the laboratory to the marketplace.
Any attempt to improve access to drugs should encourage, notdiscourage biotech research and development. Biotech innovation is the key not only for improving our health, but also for ultimately lowering our health care costs.
BIO represents more than 900 biotechnology companies, academic institutions and state biotechnology centers in 47 states and 26 nations. BIO members are involved in the research and development of health care, agricultural and environmental biotechnology products. In Maine, BIO works closely with the Biotechnology Association of Maine.