General Business

Regional Business Leaders Warn of Economic Losses from Drug Pricing Bill

Thirty business groups in New Jersey, Delaware and Pennsylvania have written a joint letter to the three states’ congressional delegations voicing opposition to a drug-pricing bill currently before the House of Representatives, H. R. 3 (the Elijah Cummings Lower Drug Costs Now legislation).

Aspects of H.R. 3 include measures that peg U.S. prices of a number of prescription drugs to an international price index. According to a report in Forbes, the bill would allow the Secretary of Health and Human Services to negotiate prescription drug prices for Medicare.

“This negotiation process would cap the prices of a select number of drugs in both Medicare Part B and D, based on an international price index. Namely, the bill would require a drug’s price to be set at or below 120% of the average price across six high-income countries: Australia, Canada, U.K., France, Germany, and Japan,” according to the Forbes article.

The legislation would save the government $450 billion, according the Congressional Budget Office (CBO), while Medicare and other beneficiaries would experience lower out-of-pocket spending.

However, the biopharmaceutical industry may lose revenue and Medicare beneficiaries and others could be faced with reduced access to newer treatments in the long term as life sciences research dollars would dwindle, hampering the development of life-saving drugs.

Business groups in the region, citing a recent study, warn of a resulting regional job loss totaling 131,500 as well as $35.4 billion in lost economic output annually combined between the three states if the bill were enacted.  In addition to the potential job and economic impact, the letter also forewarned of significant decreases in construction activity, tax revenue, charitable donations, vendor spending and other adverse consequences.

“Not only would H.R. 3 significantly harm our region’s workforce and economy, it also would severely curtail the life sciences’ ability to research and discover the next generation of vaccines, treatments and cures at a time when global human health needs them more than ever,” said Michael Fleming, president of Delaware Bio.

“This bill would dramatically reduce the nearly $100 billion the life sciences invests annually in R&D as they pursue new treatments and cures for some of the world’s most dreaded diseases,” said Dean J. Paranicas, president and chief executive officer of the HealthCare Institute of New Jersey.

“Simply put, H. R. 3 is bad for patients, bad for global health and bad for Pennsylvania’s, Delaware’s and New Jersey’s economies,” said Christopher P. Molineaux, president and chief executive officer of Life Sciences Pennsylvania.

The business leaders, which included NJBIA, urged federal representatives in the three states to oppose H. R. 3 and instead focus on policies that will actually lower patients’ out-of-pocket costs.  This bill will not lower costs for patients but it will jeopardize patient access and the future of medical innovation.

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