As COVID-19 continues to present enormous public health challenges here and around the world, America’s biopharmaceutical companies remain committed to ending this pandemic.
While scientists and researchers at many companies — including more than 90 in Massachusetts — work around the clock to develop new tests, therapies, and vaccines, Governor Charlie Baker is once again targeting these companies with a dangerous proposal in the state budget that would enact government price setting on life-saving medicines and potentially slow the type of innovation patients need now more than ever.
Defeating coronavirus is critical for people’s health, for the economy and for our country. In Massachusetts, more than 217,000 people have been infected with COVID-19, and more than 10,000 people have lost their lives.
The economic consequences are equally grave, with 268,000 residents unemployed, creating additional financial uncertainty for families. Despite some recent economic recovery in the jobs sector, Massachusetts still has one of the highest unemployment rates in the country, a major shift from March, when its unemployment rate was 1.5 percent lower than the national average.
None of this has deterred our companies. As soon as the coronavirus hit, they got to work — and have not stopped. More than 30 unique vaccines are in clinical trials right now. Several of them are already in Phase 3 trials and are currently being manufactured so that, if authorized or approved by the US Food and Drug Administration, they will be ready to ship as quickly as possible. Some companies have already started announcing promising results.
The Commonwealth should not risk this valuable innovation by instituting unnecessary price setting policies.
There are several worrisome consequences to government price setting, the worst of which is jeopardizing patients’ access to the medicines they need. Patients in countries that allow politicians to arbitrarily decide the value of medicines and which diseases are worth investing in get slower access to fewer breakthrough medicines. For example, according to our analysis, only about half of new cancer medicines are available to patients in France and Canada. By contrast, nearly 90 percent of these new medicines are available to cancer patients in the United States. We shouldn’t bring the restrictions found in foreign countries to Massachusetts patients.
These types of policies also freeze future innovation by discouraging research and development into the hardest to treat conditions, including cancer, neurological conditions like Alzheimer’s disease, ALS and Parkinson’s, and rare diseases. Investments dry up in sectors where the government can arbitrarily fix prices of products. This dynamic is especially troublesome in Massachusetts because the core of our world-leading life sciences ecosystem is emerging biopharma companies that rely on private investment to continue their operations. One of the biggest reasons the United States is leading the way on COVID-19 treatments and vaccines is because government has fostered and supported medical innovation over decades. Implementing price setting policies could derail that progress.
Most important, Baker’s current and past drug pricing proposals do not address the root cause of patients’ biggest concern — rising out-of-pocket costs. According to recent data from IQVIA, patients’ average out-of-pocket, patients’ average out-of-pocket costs for brand medicines have gone up by more than 50 percent in some therapeutic areas since 2015. In the Massachusetts private health insurance market, employer cost-sharing increased 5.6 percent last year, after a 6.5 percent increase the year prior. These percentages are significantly higher than the total increase in health care expenditures, which was only 3.3 percent last year.
With 68 percent of voters saying their health coverage is getting more expensive but covering less, people are looking for policy makers to advance solutions that will make a real difference. The governor’s proposal does nothing to help solve this issue and could only make it worse for patients. Solutions that would increase competition, ensure patients benefit from rebates at the pharmacy counter, and lower patients’ cost-sharing are the best ways to lower costs and protect patients’ access to medicine, not imposing greater government interference.
Baker should stop ignoring policies that would offer consumers real relief and should prioritize helping the people of Massachusetts with solutions that could help lower patient out-of-pocket costs and support medical innovation, especially now when we need it most.
Steven J. Ubl is president and CEO of Pharmaceutical Research and Manufacturers of America (PhRMA). Robert K. Coughlin is president and CEO of the Massachusetts Biotechnology Council.