The Alliance

The Weekly Dose | 10.18.19

October 18, 2019 2:01 pm

Yesterday was busy on the drug-pricing front, with the House Ways and Means Committee holding a hearing and two House Committee conducting mark-ups on H.R. 3, Speaker Nancy Pelosi’s (D-Calif.) drug-pricing bill. Lawmakers brought up the Congressional Budget Office’s (CBO) report on the bill several times.


We found University of Southern California professor Dana Goldman’s analysis of the CBO report particularly helpful. The CBO measured impacts of the legislation over a decade, he notes. Most new cures take around 15 years to develop, however. What does that discrepancy mean? According to Goldman, “[T]he CBO scoring window misses the period when the policy might have the largest effects.” Even with a shorter time horizon, the CBO found H.R. 3 would reduce innovation. But it probably does not capture the full negative impact the legislation will have on the quest to discover new cures.


Former CBO Director Douglas Holtz-Eakin also indicates the CBO is underestimating H.R. 3’s negative impact on innovation. He said, “Losing roughly 5 percent of innovative drugs is nothing to sneeze at, but I think this is the tip of the iceberg. The real issue is that the drug industry would be much, much less attractive as a location for risk capital, so that the lost revenues is the lower bound for the loss of innovation finance.”


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Patrick O’Connor – Executive Director

Rosemarie Calabro Tully – Communications Director





- At today’s @WaysMeansCmte #DrugPricing hearing, @RepKevinBrady says it best: “One cure lost is one cure too many.” As policymakers consider lowering #healthcare costs for Americans, they must ensure that we preserve #patient access to both current AND future innovative drugs. Click here to RT.  


- Of the 270 new medicines launched from 2011-2018, 100% are available in the U.S. while in Australia, only 41% are available. Click here to RT.


- 72% of metro areas had “highly concentrated” #hospital markets in 2016, leaving them “more likely to use their power to extract extra profit… than to benefit #patients.” See how #hospital consolidation contributes to our #healthcare costs here: Click here to RT.




Check out and share on Twitter our latest blog posts:


- H.R. 3 And Innovation. In late September hearings, House lawmakers argued Speaker Nancy Pelosi’s drug-pricing bill would harm innovation in the United States. What do we risk losing? As one lawmaker put it: “breakthrough cures for diseases like Alzheimer’s, cancer, sickle cell anemia, and others.” Click here to read the full blog post.


- ICER’s Unjustified Pricing Report. We break down the Institute for Clinical and Economic Review’s most recent misleading report, which further illustrates why ICER should not be the sole arbiter in determining the cost of new drugs that come to market. Click here to read the full blog post. Share on Twitter here.


- ITIF Paper: Price Controls Reduce Innovation. The United States always has been the global innovator in the search for new cures. But if price controls are put into effect, we will quickly lose our lead. We look at a new Information Technology and Innovation Foundation paper, which explains why. Click here to read the full blog post. Share on Twitter here.




- Pelosi Bill Would Harm Cancer Patients. Barbara Kavanagh, founder and CEO of Arizona Myeloma Network, writes: “Thanks in part to this increased access, the United States has lower cancer mortality rates than other developed countries. Price controls would impede access to more than just cancer drugs. In the United States, patients enjoy access to 88 percent of all new medicines right away. Patients in 16 countries that control drug prices had immediate access to just 48 percent of new drugs, on average.”


- Pelosi Bill Will “Curtail Investment In Personalized Medicines.” American Enterprise Institute Visiting Fellow Kirsten Axelsen argues Speaker Pelosi’s legislation “will most likely curtail investment in personalized medicines (when medical treatments are tailored to each person’s unique molecular and genetic profile), cutting-edge cell therapies, gene therapies and many other treatments that improve the lives of Americans.”


- ICER “Ignores Real-Life Patient Experiences.” At NJSpotlight, BioNJ CEO Debbie Hart writes: “ICER ignores real-life patient experiences in its reviews, instead basing its determinations of a drug’s value on financial considerations alone. Their method applies an arbitrary monetary value (in the range of $100,000) to one year of ‘perfect health.’ This approach to drug value assessment is particularly disturbing as, among other things, it may be discriminatory, placing a lower value on the lives of the disabled and elderly.”


- Hospital Costs Driving Higher Health Care Spending. According to American Action Forum Deputy Director of Deputy Director of Health Care Policy Tara O’Neill Hayes: “Hospital costs account for nearly 40 percent of personal health care expenditures in the United States. Despite a decrease in hospital utilization, spending on hospital care grew 32 percent on a per capita basis between 2008 and 2017, and spending is expected to grow 5.7 percent per year, on average, from 2020 to 2027, largely because prices rose 29 percent from 2005 to 2018 and are expected to continue rising. … Reducing the overall cost of health care in the United States will be difficult without reducing hospital prices.”


- How The Patent System Impedes Innovation. Bloomberg Law previews a Washington Law Review paper that finds “The U.S. patent system discourages drugmakers from tackling the country’s toughest health problems, such as Alzheimer’s and rare cancers. Starting the clock on patent life when an application is filed—instead of from issuance of a patent—leads to shorter periods of patent exclusivity.”


- Industry Trying To Use Artificial Intelligence (AI) To Prevent Drug Shortages. As The Wall Street Journal reports, the United States “had roughly 150 to 300 drug shortages every quarter between 2014 and 2019. Antibiotics, chemotherapy, and cardiovascular treatments are among the classes of treatments that are most affected. The article explores how the pharmaceutical industry is using AI and machine learning to reduce shortages.




POLITICO’s “Morning Pulse” had the following assessment of drug prices from Altarum’s Paul Hughes-Cromwick:

“We have seen incredibly low growth in prescription drug prices since July 2018, and the 12-month moving average now stands at -0.5 percent — a 47-year low.”


Prior to Tuesday’s Democratic presidential candidates’ debate, Axios outlined several questions for a “better debate.” Here is a good one:

“We’ve heard a lot of criticism of drug companies and insurance companies, but the single biggest chunk of U.S. health care spending goes to hospitals — about $1 trillion a year. Is that too much? How will you cut it?”




October 22, 2019, 9 a.m.: Bipartisan Policy Center

Location: 1225 Eye Street, NW Suite 1000 Washington, D.C. 20005

Topic: “U.S. Drug Policy: Tools to Increase Access and Affordability.”

Agenda: Explore the implications of using pharmaceutical reference pricing – both internal and external – in the United States.

Contact: (202) 240-2400