The Well News: In Medicine, Make America Innovate Again

By Kasia Mulligan, Patients Come First’s National Spokesperson

News outlets are abuzz with speculation about President-elect Donald Trump’s nominees to serve in his Cabinet; however, let’s not forget that voters, dissatisfied with the status quo, spoke clearly in November, demanding fundamental change in bureaucratic systems that cannot deftly respond to modern challenges.

The rate of groundbreaking scientific discoveries is on the decline. In this era of reform lies an opportunity to put genuine innovation at the center of health care in America, no matter who leads the Department of Health and Human Services.

To do this, policymakers must remove barriers to the development and delivery of innovative care including through reducing costs, expanding access and incentivizing cutting-edge breakthroughs. Innovation is critical to improving patient well-being, but the status quo is rife with obstacles. Removing them must be a priority for lawmakers.

Here are three necessary reforms to truly unleash a pioneering period in American medical innovation.

First, address the disastrous price controls on medicines enacted in the Inflation Reduction Act. The economic literature is clear that price controls do not work and it’s time to roll back the IRA’s harmful provisions.

Research shows that the IRA’s price controls, if allowed to remain in place, will result in the development of 135 fewer drugs by the end of 2039. Any short-term savings that may result from the artificially lowered prices will be dwarfed in the long run by the decrease in innovation in America’s pharmaceutical research sector.

Continued development of lifesaving medicines and technologies is critical for improving patient outcomes. Producing a revolutionary medicine costs anywhere from $314 million to $4.46 billion and requires 10-15 years of research and testing.

In a JAMA study released this summer, researchers found that the mean cost of developing a drug increased by a factor of five to eight when accounting for the cost of failures and other capital costs.

Given this reality, manufacturers will be forced to invest in proven technologies that are more likely to bring the needed return on investment instead of riskier but possibly transformative drugs.

This is particularly the case when it comes to the treatment of conditions that currently lack any Food and Drug Administration-approved treatment options, estimated to be around 95% of rare diseases.

According to the National Institutes of Health, there are more than 7,000 rare diseases, many of them chronic and life-threatening, impacting around 30 million Americans — half of them children.

The IRA essentially conceded that price controls hurt innovation by including a carve out for orphan drugs that treat diseases affecting less than 200,000 people. However, this exemption is rendered meaningless in reality; if the treatment is approved for any follow-on indication, the indemnity from price controls disappears.

Given how common it is for orphan drugs to gain additional indications for both rare and common diseases — of 282 new orphan drugs approved in the last 20 years, nearly a quarter were approved to treat more than one condition, and 10% to treat more than two conditions — the IRA’s price controls prove to be detrimental when it comes to incentivizing more cures for more conditions, carve out or not.

While we are already seeing the negative impacts on innovation thanks to the IRA’s price controls, lawmakers should also examine other problem areas. Given the wet blanket that is the IRA, any additional barriers to innovation could have a particularly pernicious effect on the research and development process.

Second, with the recent rise in mass tort lawsuits, lawmakers must address the growing threat of litigation presenting a serious risk to the development of novel therapies.

Similar to the IRA’s disincentivizing price controls pressing companies to focus on developing drugs with a proven track record of working, the threat of litigation spurs companies away from producing treatments and therapies. As evidenced by a Harvard 2024 working paper on medical devices, product liability litigation affects the rate and direction of technological progress.

While nobody wants unsafe products on the market, the threat of excessive litigation pushes companies away from developing truly novel treatments by creating an environment of uncertainty and discouraging risky R&D that leads to scientific breakthroughs.

Read the full op-ed in The Well News here.