Biocom California, the association representing the life science industry of California, issued the following statement regarding the drug pricing portion in the Inflation Reduction Act. The statement can be attributed to Joe Panetta, Biocom California's president and CEO:
"After a detailed review and consideration of the drug pricing provisions included in the Inflation Reduction Act, we at Biocom California have no other choice than to oppose this legislation, as it once again comes short of protecting innovation and making meaningful changes for patients.
While we wholeheartedly support the provisions in the bill that establish a much needed $2,000 cap on out-of-pocket patient spending and restructure of the Medicare Part D benefit program, we are deeply concerned that the bill ignores the tireless work of well-informed lawmakers who put forward alternatives that struck a delicate balance between promoting patient affordability and recognizing the role of the biomedical innovation community in bringing innovative medicines to market.
We appreciate that the bill does not include foreign price controls, but it still gives the federal government unilateral determination over the value of a medicine and, if a company does not agree with that valuation, it would be effectively barred from the entire Medicare market. This is pure government price setting, not negotiation.
The bill would impact not only the drugs selected for ?negotiation,' but also future medicines that rely on risk-averse investments to be developed. Price controls have been proven to destabilize innovation ecosystems by driving capital investments away, chilling research and development, and eliminating jobs. Ultimately, they reduce the number of medicines being developed and reaching patients.
A recent study by Vital Transformation has estimated that the bill would reduce innovators' revenue by at least 55%, putting 104 out of 110 drugs or 95% of the pipeline at risk of cancelled development, and costing California over 100,000 jobs. California is the global leader in biomedical innovation and a vital contributor to the state's economy, generating over $400 billion in annual economic activity and supporting almost 1.4 million jobs. As such, California companies and the state's overall economy will be disproportionately harmed, especially small companies that create more than half of new medicines.
The bill also ignores repeated calls from more than 130 patient organizations to bar the federal government from using price setting methodologies that ration care and discriminate against seniors and individuals with disabilities.
Last but not least, the bill would take away almost $300 billion in industry revenue to reduce federal government prescription drug spending. Yet, there is absolutely nothing in the bill that requires the federal government to pass a penny of these ?savings' down to patients. Instead, they are intended to reduce the budgetary impact of unrelated provisions in the bill that paradoxically invest in other research and manufacturing industries, effectively picking winners and losers.
After years of debate and factual input from our industry, the patient community and legislators with deep technical knowledge of the innovation ecosystem, it is alarming that Congress is pursuing another drug pricing proposal that endorses price setting and fails to recognize the role of scientific discovery, despite our successful work to address the COVID-19 pandemic. As always, we stand ready to work with Congress to enact bipartisan proposals that meaningfully address inefficiencies within the health care system and bring all stakeholders to the table."
About Biocom California
Biocom California is the leader and advocate for California's life science sector. We work on behalf of more than 1,600 members to drive public policy, build an enviable network of industry leaders, create access to capital, introduce cutting-edge STEM education programs and create robust value-driven purchasing programs.
Founded in 1995 in San Diego, Biocom California provides the strongest public voice to research institutions and companies that fuel the local and state-wide economy. Our goal is simple: to help our members produce novel solutions that improve the human condition. In addition to our San Diego headquarters, Biocom California operates core offices in Los Angeles and the San Francisco Bay Area, with satellite offices in Sacramento, Washington, D.C. and Tokyo. Our broad membership benefits apply to biotechnology, pharmaceutical, medical device, genomics and diagnostics companies of all sizes, as well as to research universities and institutes, clinical research organizations, investors and service providers.
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