24 Apr 2020 Price Controls Could Kill the Next Pandemic Miracle Drug
As American pharmaceutical companies are stepping up to find ways to eradicate the coronavirus pandemic, Project 21 Co-Chairman Stacy Washington warns that legislation on Capitol Hill could be “nothing short of calamitous” to such innovation.
[T]he economic logic of drug development vanishes if the government can simply dictate whatever price it deems appropriate.
What’s at stake? For those who depend on lifesaving prescription medications, virtually everything:
The United States develops two-thirds of the world’s new drugs. In the last ten years, American drug firms have spent over half a trillion dollars on research and development – more than the private investments of all other countries combined.
Our unrivaled research infrastructure naturally puts the American pharmaceutical sector in the best position to address an emergency like COVID-19, which demands high-quality drug-development in a hurry.
Americans should be proud of our nation’s prowess in life-sciences research. Yet, for the past several years, many in Washington have sought to destroy the market incentives that undergird the country’s drug-innovation ecosystem.
Stacy provides the historical example of Europe as a solemn warning of what could happen here:
Before the widespread adoption of price controls, Europe was a drug development juggernaut. In the 1970s, those three countries alone combined to produce 45 percent of new therapies invented worldwide. From 2001 to 2010, they produced just 20 percent. Our country develops the most new drugs today because we maintained a free market for prescription medicines.
Especially as this pandemic reminds us why we need to always be prepared for the next crisis, Stacy remarks that there’s no reason for Washington to continue to push policy that hobbles “pharmaceutical innovation [and] puts millions of lives at risk.”
To read all of Stacy’s commentary – “Coronavirus Reveals the Recklessness of Drug Pricing Reform” – click here.
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