Sen. Bernie Sanders, I-Vt., and Rep. Ro Khanna, D-Calif., recently proposed bills that would impose price controls on prescription drugs.
The legislation would require pharmaceutical companies to sell their medicines in the United States for no more than the median price charged in five countries – Canada, the United Kingdom, France, Germany, and Japan. If companies refuse to cut prices in the United States, the federal government could revoke existing patents or market exclusivities and allow generic drug manufacturers to sell knockoff copies of the medicines.
Such bills are deeply misguided. They’d stifle medical research, cutting Americans off from potentially life-saving new therapies.
Bringing a new drug to market is a monumental endeavor. It takes $2.6 billion and more than 10 years to do so, according to a study from the Tufts Center for the Study of Drug Development.
Researchers need to recoup this investment when the drug goes to market. If they can’t price medications accordingly, then innovation isn’t financially feasible. That would deprive patients of crucial new cures.
Plenty of research confirms this. One analysis of 25 major markets worldwide revealed that countries that had lower projected prices or smaller markets for new drugs launched fewer new drugs. It also took a longer time to launch those drugs. Another comprehensive study conducted by Professor John A. Vernon at the University of Pennsylvania found that price controls would cause research and development intensity to decline between 36 and 48 percent.
If the United States imposes drug price controls, medical innovation will grind to a halt, and ultimately hurt patients. We mustn’t let that happen.