The “Lower Drug Costs Now Act of 2019” (H.R. 3) passed by the House of Representatives—on nearly a party-line vote of 230-192—would endanger patients by leading to a loss of anywhere between 100 to 400 new drugs in the U.S. over the next decade and reduce the average life expectancy of Americans by fourth months, according to the Council of Economic Advisors (CEA).
The Trump Administration issued a Statement of Administration Policy on H.R. 3 stating that the administration opposes H.R. 3 for multiple reasons including the potential loss of research and development of new drugs. The Statement of Administration Policy can be found here.
The most conservative estimate by the Council of Economic Advisors is that 100 drugs could be lost over the next decade but it could be closer to a loss of as many as 200 to 400.
“Congress placing price controls for drugs would create a bureaucratic nightmare that would seriously curtail efforts to develop new life-saving drugs,” stated Carol Tobias, president of National Right to Life (NRLC). “Research and development by America’s pharmaceutical companies—the world leaders in life-saving drug development—would grind to a halt.”
“We thank President Trump and his administration for their efforts to protect innocent human life,” Tobias added. “The potential loss of life, if H.R. 3 became law, would be staggering.”
The shortfall of new drugs entering the marketplace would mean that outcomes for certain medical conditions could increase treatment costs—estimated to be as high as $1 trillion a year over the next decade. And the value of human lives would exceed any short-term cost-savings that might be expected if H.R. 3 were to become law.
“The extreme penalties and fines for pharmaceutical companies that fail to accept the government’s ‘negotiated’ price for a drug essentially create price controls,” stated Jennifer Popik, J.D., legislative director for National Right to Life. “Billions in research dollars would be potentially lost and would put at risk the lives of millions of Americans who are in need of new life-saving and innovative drugs.”
In its analysis, the CEA conservatively estimated that it costs approximately $2 billion to bring a new drug to market. The Congressional Budget Office (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.