A new analysis of the Lower Drug Costs Now Act of 2019 (H.R. 3) by the Council of Economic Advisers (CEA) estimates that, if passed, the legislation could lead to a loss of as many as 100 new drugs in the U.S. over the next decade.
“Congress should not set up price controls that will prevent the development of new life-saving drugs but H.R. 3 would do just that,” stated Carol Tobias, president of the National Right to Life Committee (NRLC).
The CEA estimates that changes in the law made by H.R. 3 would reduce the life expectancy of Americans by approximately four months. In addition, the loss of new drugs entering the marketplace also means that health outcomes for certain conditions could increase treatment costs—estimated to be as high as $1 trillion a year over the next decade.
The loss of lives and the increase in costs far outweigh any cost-savings expected by the passage of H.R. 3.
Even the Congressional Budget Office (CBO) suggests that the bill would prevent anywhere from 8 to 15 new drugs from entering the market but does not reveal how it determined these numbers.
“Pharmaceutical companies spend between 15 and 20 percent of their revenue on research and development,” stated Jennifer Popik, legislative director for National Right to Life. “Stripping researchers of billions in research dollars will only hurt Americans who are in need of life-saving and innovative drugs.”
In its analysis, the CEA conservatively estimated that it costs $2 billion to bring a new drug to market. The CBO estimated that it costs $2.5 billion. Using the CBO’s numbers on the loss of revenue to pharmaceutical companies because of the Lower Drug Costs Now Act of 2019—losses which range from $500 billion to $1 trillion—the actual number of fewer new drugs over the next decade could be anywhere between 200 and 400.
Read the CEA summary here.