NJ.Com: Price controls are bad medicine

By Jeanette Hoffman, Patients Come First New Jersey’s Executive Director

During this week’s presidential debate, we heard both candidates try to take credit for temporary lowering of the price of some prescription drugs, including insulin, for seniors.

While these Medicare “price negotiation” policies sound good politically, this is not a negotiation at all, but government-mandated price controls. And government price controls ignore the economic realities of supply and demand. They also ignore the enormous cost of research and development in bringing new medicines to market. When government officials implement price controls, it creates economic uncertainty by distorting the business environment, which then reduces funding for the discovery of new medicines. As a result, patients will ultimately suffer from the loss of innovation in the marketplace.

The American medical innovation system is the most robust in the world, with many of its leading biopharmaceutical companies located right here in New Jersey. Because of their ongoing research initiatives, patients have access to the most advanced treatments and clinical therapies coming to market. Last summer, the U.S. Food and Drug Administration granted full approval of a new Alzheimer’s drug for the first time in more than 20 years. In fact, the year 2023 saw more novel therapeutics approved than almost any other year in the 21st century.

Yet, the administration’s price-fixing policies threaten this innovation ecosystem and jeopardize the pipeline for the development of new drugs and treatments, including future cures for Alzheimer’s and cancer.

According to research from the U.S. Chamber of Commerce, these types of price controls will result in 29% to 44% fewer medicines in all therapeutic areas, including cancer. Worse still, that same study shows that price controls will cause cancer research to decrease by almost 60%. University of Chicago economist Thomas Philipson estimated that there would be 135 fewer drugs by 2039 if price controls were implemented.

Unfortunately, we are already beginning to see this play out. Due to the price controls, several companies have already announced cancellations of certain research and development projects.

Sadly, patients with rare diseases will suffer the most if the biopharmaceutical pipeline is limited. Many of these patients require multiple backup options if their first prescribed treatment doesn’t work or stops treating their disease. By stifling innovation, price controls significantly reduce the number of options available and leave patients with no alternative to choose from.

Read the full LTE in NJ.Com here.