Brad Watts
Vice President, Patents and Innovation Policy, Global Innovation Policy Center (GIPC), U.S. Chamber of Commerce
Published
August 15, 2024
Today’s White House announcement effectively sets the price for 10 lifesaving medicines. While the Biden Administration claims this will benefit American patients, they overlook the significant issues with price controls.
The Chamber’s research has demonstrated that because of price controls and other market-restrictive policies, American patients will have reduced access to new cures and treatments and face longer wait times for existing medicines.
Catch Me Up
Almost two years ago, President Biden signed a law giving unelected federal bureaucrats the authority to set arbitrary price controls on lifesaving medicines.
Few Benefits, Long-Term Harm to Patients
It’s important to note that many of the medications subject to price controls under today's announcement are already facing generic competition and upcoming patent expirations, which will naturally lead to market-driven price cuts.
In fact, both anecdotal and quantitative data confirm that price controls decrease access to the latest breakthroughs and stop the innovation needed for new cures. Reports indicate that life science innovators have already had to slash their research and development budgets in anticipation of government price controls. For example, Charles River Laboratories, a major service provider in the pharmaceutical sector’s research and development space, shared that there has been “a pretty unexpected and rapid deterioration of the pharma companies’ business. This is unusual activity.”
The Chamber agrees. Our research estimates that price controls could cut clinical trial research in some therapeutic areas by as much as 75 percent, including a 70 percent cut in obesity studies and a 60 percent cut in early-phase cancer and biologics studies. The Chamber’s research has also demonstrated that price controls may put the development of more than 400 new medicines at risk.
Decreased Access
Chamber research has shown that countries that use price controls see fewer overall biopharmaceutical product launches. For example, out of 104 new oncology products launched globally since 2017, 80 percent were launched in the U.S., where, until now, there have been no price controls.
Addressing Price Controls
It's crucial that we address this issue promptly to ensure the best outcomes for American patients. Congress must stop unelected, unaccountable government bureaucrats from imposing a price control regime on America’s life-science innovators.
About the authors
Brad Watts
Brad Watts is the Vice President for Patents and Innovation Policy at the U.S. Chamber of Commerce's Global Innovation Policy Center (GIPC). He works with U.S. Chamber members to foster a political, legal, and economic environment where innovators and creators can invest in the next big thing for the benefit of Americans and the world.
