House Democrats recently unveiled H.R. 3, a proposal would impose ill-considered price controls on prescription drugs.
Patient advocates immediately panned the bill, warning it would deter medical research and prevent scientists from developing future treatments and cures.
They’re right -- but they’re understating the bill’s harmful effects. The legislation could stifle ongoing “post-approval” research into existing treatments already on the market. It would prevent scientists from refining current drug formulas to make them safer or testing medicines in broader patient populations.
In other words, cures for certain types of cancer and other chronic conditions may already exist -- but they won’t reach patients if H.R. 3 becomes law.
Consider how the drug development process works. When scientists discover a promising compound, they conduct years of lab tests and animal studies. The majority of potential medicines fail in this preclinical trial phase -- only one in 1,000 compounds shows enough promise to merit further testing.
Scientists typically conduct “phase I” clinical trials on healthy humans to confirm a medicine’s safety. If the compound proves broadly safe, scientists move on to “phase II” trials in dozens or hundreds of sick patients.
More typically, the FDA requires researchers to prove a drug’s safety and efficacy in “phase III” trials, which usually involve hundreds or thousands of sick patients. Drug companies then submit their testing data to the FDA for review.
This process takes a decade or more and it’s fraught with failure. Only 12 percent of experimental medicines entering phase I trials ultimately win FDA approval. After accounting for this high failure rate, it costs $2.6 billion, on average, to bring a new medicine to market.
The research process doesn’t end there. Companies often conduct extensive post-approval trials to monitor patients for long term effects.
Innovators also test whether their medicines can effectively treat other, related diseases. Consider the drug Lynparza, which the FDA approved in 2017 to treat certain types of ovarian, fallopian tube, and primary peritoneal cancers. The manufacturer conducted post-approval research, which led to the FDA approving Lynparza for certain forms of breast cancer.
Follow-on research isn’t cheap. It adds $300 million, on average, to the drug’s R&D cost.
H.R. 3 would discourage such research. The bill imposes steep penalties on companies raising a medicine’s price faster than inflation. The legislation would prevent companies from updating their prices -- even if the new indication is highly valued by patients and the healthcare system.
If the House bill makes it harder to recoup the cost of follow-on research, companies won’t make those investments in the first place. Why bother looking for new uses if these post-approval discoveries won’t deliver a financial return?
But what makes the policy even less defensible is it would do nothing to reduce patients’ actual pharmacy bills. The proceeds from the inflation penalty would go directly into the government’s coffers.
Simply put, patients would lose out on valuable medical discoveries while deriving no benefits in return. It’s not what Americans had in mind when they demanded drug-pricing reform.