Many of the biopharmaceutical policy proposals laid out by President Obama in his JAMA article (United States Health Care Reform: Progress to Date and Next Steps) are simply a rehash of tired, old ideas that have been rejected by bipartisan majorities in the Congress for years. The plans he lays out would do little or nothing to improve our shared goal of increasing patients’ access to medicines and could impede the development of new medical breakthroughs and cures, including his Administration’s own cancer moonshot initiative.
I believe there is a better path forward when it comes to medical innovation, one that reflects our nation’s entrepreneurial spirit, draws on the incredible knowledgebase of our country’s scientific community and protects an ecosystem that has made America the world’s leading producer of first-in- class treatments that are improving the lives of patients in the U.S. and around the world.
To make this possible, BIO is working with stakeholders across the health care system. Our shared goal is simple: ensuring patients get access to the medications they need and ensuring that tomorrow’s breakthroughs are not impeded by regulatory hurdles.
To make that vision a reality, it is important that we start with accurate data that reflects the true state of health care spending and the awesome challenge medical researchers face in bringing a new drug to patients.
That said I want try to set the record straight about some of the data presented in the JAMA piece. The first is putting prescription drug spending in context. A recent study from IMS Health found that “discounts and rebates negotiated by payers continue to rise sharply – offsetting list price increases” and that the net prices for brand medicines increased just 2.8 percent in 2015—that is on par with inflation. And even the insurers own data show that three-quarters of insurance premium growth, attributed to health spending, is driven by spending on hospitals and doctors, not prescription drugs.
In fact, a study from PwC said, “drug spending is still a relatively small portion of overall health spending, and, as such, concerns of ever-increasing cost growth from new cures may trigger false alarms.” While prescription drugs account for just over 13 percent of all healthcare expenditures, according to CMS. For decades that number has remained relatively stable and is estimated to stay that way for years to come.
President Obama goes on to voice support for increasing rebates and discounts in Medicare Part D that biopharmaceutical companies already provide in a competitive market that has proven to be successful in providing access and choice to beneficiaries at costs far lower than initially projected. And he fails to mention that our industry provides a multitude of free or discounted drugs to patients who need them.
The President also says little about insurance companies actively pushing sick patients off their plans by increasing cost-sharing to unfathomable levels or refusing to cover drugs that patients need until it’s almost too late.
It’s unfortunate that President Obama would attempt to impugn the motives of the many that work in our industry. Ninety percent of biopharmaceutical companies are unprofitable. The industry is also a leader in R&D. And it is only through continued innovation that we can provide lifesaving treatments today and still find the cures of tomorrow.
In the end, both President Obama and our industry want the same thing: to ensure patients receive access to the medications they need and that the next generation of biopharmaceutical innovation continues.
BIO stands willing to work with the President—and whoever succeeds him—to do just that.