Drug Costs

Arnold-Funded Group Wrong On IPI Proposal

March 28, 2019 9:27 am

Patients For Affordable Drugs Now, the advocacy group funded by the Arnold Foundation, has released a new digital ad in support of the U.S Department of Health and Human Services’ proposal to adopt an International Pricing Index, or IPI. This proposal would tie Medicare drug prices to drug prices in other countries.


As this blog reported previously, public comments to the Trump administration ran about 1,000 to one against the IPI proposal.


Why? Because patient groups, economists, and physicians agree American patients would pay a steep price. Patients here have access to more drugs than consumers overseas, and we get these life-saving medications into the hands of medical professionals more quickly.


IHS Markit has compared access to medicines in the United States and other countries, including Canada, France, and the United Kingdom (some of the countries the IPI would be linked to) by examining outcomes for non-small cell lung cancer (NSCLC) between 2006 and 2017. This cancer is the leading cause of cancer mortality in the United States and around the globe. IHS Markit found treatments came onto the market much faster and, as a result, Americans with the disease gained 201,700 life years.  


The IPI also would link prices to those in the Czech Republic. The Galen Institute has found that, of the 290 new drugs that came onto the market between 2011 and 2018, only 36 were available in that country. Contrast that to the 89 percent that were available in the United States.


The Trump administration proposal also will impact the private sector’s ability to develop future cures. According to the Tufts Center for the Study of Drug Development (CSDD), it cost $2.6 billion in 2014 to take a drug from early stage development to market, a 145 percent increase after inflation from 2003. The private sector is the largest source of funding for drug innovation in America. Price caps will reduce the pool of funds available to research new cures.


The California Life Sciences Association (CLSA) was one of the 2,000 organizations and individuals that responded to CMS’ call for public comment. The CLSA’s warnings are worth repeating in full here. The Trump administration proposal, CLSA explained, would impose decisions made in foreign countries on approximately half of all doctors and their patients; interject new middlemen between physicians and patients who would be able to dictate patient treatment; and restrict patient access to treatments in the short-term. The group concluded, “Innovation in California’s life sciences sector will also suffer as the model would disrupt biopharmaceutical investment in research and development.”


              Patients simply cannot afford that price.