Study projects extensive damage to drug development, jobs from drug-pricing policies
A new study estimates that there would be 237 fewer FDA approvals of new medicines over the next decade and 1.1 million lost jobs if proposals to expand government-mandated drug pricing policies are implemented.
The policies include allowing Medicare to set prices for specific drugs five years after FDA approval, which would lead to a significant number of lost therapies, innovation and jobs in the biopharma ecosystem. These proposals are included in the White House’s FY 2024 budget as well as the Senate’s SMART Prices Act.
Research firm Vital Transformation modeled the impacts of expanded government-mandated drug pricing policies at five years following FDA approval. The study analyzed the reduction of new drug approvals and loss of jobs if these policies or others similar to them were enacted into law.
The study found that, if proposed expansions of government-mandated drug pricing policies are implemented, there are serious consequences around the development of and investment in new medicines, and significant job losses in major innovation hubs across a number of states.
- Lost therapies: More than 80 currently available therapies of 121 identified for price setting – approximately 70% – would likely not have been developed had the pricing provisions been in place prior to their development.
- Lost innovation: There would be 237 fewer FDA approvals of new medicines or new uses over a 10-year period. Impacts of the proposed policies will be felt most heavily in many areas of unmet need, particularly in oncology, neurology, and rare and infectious diseases.
- Lost jobs and investment: This would result in a loss of 146,000-223,000 direct biopharmaceutical industry jobs and a total loss of 730,000-1,100,000 U.S. jobs across the economy. There would be loss of ecosystem investments into 50 different therapeutic indications.
Learn more at We Work for Health (PDF).