Pricing -

Report reveals the danger of the proposed price fixing on the innovation of biopharmaceuticals in the United States

“Congress is about to basically force private companies to take whatever they are willing to pay, which will have a massive negative impact on research and development in the future.”

Recently published research conducted by biotransformation Shows legislative provisions similar to those in The Inflation Reduction Act of 2022which allows the US government to “negotiate” drug prices within a defined framework based on the amount of time the drug spends on the market, would have significant negative effects on patient access to new treatments because funding would be severely curtailed for research and development.

according to biotransformation, a reduction in net profits due to government price fixing would drastically reduce the amount of research and development for small biotech companies, which would negatively affect drug discovery and development in the future. The model used in the study estimates that with government pricing fixed “only 6 out of 110 previously approved treatments will be considered ‘at no risk of cancellation or at least stripping’.”

forced assignment

The biotransformation Research, conducted as an analysis of the now-defunct death Rebuild better The legislation, “demonstrates drug pricing caps…that would significantly reduce significant investment in innovative treatments and therapies that patients rely on, at a time when smaller biotech companies face enormous pressure in capital markets,” according to Nick Shipley. , Chief Advocacy Officer, Biotechnology Innovation Organization. Indeed, on top of recession pressures, small biopharma companies that often require investor funding for a decade or more to survive will face more downward pressures that will make it difficult to stay afloat. A real disaster, since small companies often produce most of the new and exciting innovative treatments and treatments that are subsequently manufactured and distributed by the larger companies that control the channels of commerce.

Provisions for determining the price of the drug from The Inflation Reduction Act of 2022 Remains like the ones in the previous version of the now defunct Rebuild better legislation. Under the current proposal, there would be a default and compulsory mandate for pharmaceutical companies to accept the sale price offered by the government for drugs obtained in the legislation, otherwise a 95% selective tax would be assessed on sales. And some who have analyzed the bill do not believe that the pharmaceutical company can simply refuse to sell the drug in question to the government because the way the invoice text is written, any refusal by the drug company to accept the government price will result in a 95% selective sales tax.

Target income generating drugs

Despite this physical blow to the industry, and the death frenzy of innovation and investment, progressives are said to be unhappy that the bill was not enough. The The Inflation Reduction Act of 2022 It captures only small-molecule drugs that have been approved by the Food and Drug Administration for at least nine years and biologics that have been on the market for 13 years. Regardless, the current rulings capture which drugs Medicare spends the most money on, which means they are the most commercially successful and important drugs.

Let this run in – Congress is about to basically force private companies to take whatever they are willing to pay, which will have a massive negative impact on R&D in the future. Thus, Congress is focusing on the most important and successful drugs, in other words, on very few of them In fact Make money from biopharma companies. By focusing on those drugs that In fact To make money, it doesn’t take a psychic to predict that there will be many companies in the industry that will not survive, and others that will reeling with serious injuries.

Science is hard, but the economy is clear

Science is hard, as pretty much everyone can attest, especially among the masses who struggled to pass high school biology or chemistry on their way to graduation, to never look back and never be interested in science again. And biopharmaceutical science is very difficult and absolutely unpredictable. Getting a pregnancy candidate drug to market is very expensive, and if it does, consensus estimates from the Congressional Budget Office range from $1 billion to $2 billion, sometimes much higher.

The increased costs associated with new drugs are due to the fact that most drugs fail, and for the company to remain in business, the successes must pay not only for themselves but also for failed attempts. So those drugs that work need to provide a reasonable rate of return for investors to make everything worthwhile, but those that work need to pay for 90% of the drugs that don’t work – those that never make it to clinical trials, only seemed promising to fail during trials Clinical, or was put on the market but faltered.

Nobody likes paying high prices for medicines and treatments, but if we don’t allow biopharma companies to make money on profitable medicines, they will go out of business, and that will benefit no one. Complicating matters, of course, is the division within the industry between large biopharma companies, small start-ups and SMEs that are often – if not in general – responsible for the most exciting discoveries and breakthroughs.

It is easy to discredit large biopharmaceutical companies that are often very profitable, albeit less profitable than technology companies such as Amazon, Apple, Microsoft and Alphabet. Are big bio drugs truly Need to be profitable as it is? Similar questions are not asked of Apple, Amazon, Microsoft or Alphabet, as the investment in research and development is almost never speculative. But are we truly Willing to tip the delicate balance and seize the opportunity for highly risk-averse investors who are willing to accept the risk of a 9 out of 10 failure rate as long as there is a chance of a big profit (albeit not a huge tech company)? Will they continue to provide financing in the world of price setting? Perhaps, but this is a gamble. And after watching the government so wrong about the economy, is it to allow these same people to take a calculated adventure about the future of innovative drugs and treatments? The question may answer itself.

There are better ways to solve the problem than fixing the price

Pricing, if done by the private sector, is illegal. Price stabilization, when done by the government, is not only stupid but the hallmark of a socialist system. The sad part is that pricing is not necessary to address this particular problem. The government has enormous purchasing power and thus enormous influence. The fact that government negotiators are bad at their job and do not understand influence is a bad reason to adopt socialist policies that would sacrifice industry and suppress research on future remedies and treatments.

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Author: robeo123
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