The California life science industry said Tuesday the beginning of federal price controls on drugs would have a “devastating” impact on medical innovation.
The statement by Biocom California came after the Biden Administration released a list of the first ten drugs subject to price controls under the Inflation Reduction Act.
“Since the passage of the law last year, markets have dropped significantly, venture capital investments have moved away from the life science industry, important projects in the pipeline were cut and companies have been forced to lay off employees, said Joe Panetta, Biocom’s president and CEO.
“Biocom California had consistently sounded the alarm that establishing price setting in the U.S. would have devastating impacts on the whole innovation ecosystem,” he said.
President Biden’s signature Inflation Reduction Act allows Medicare to negotiate prices for some of its most costly drugs.
“Today is the start of a new deal for patients,” Biden said at a White House event on Tuesday, adding that Americans often pay two to three times more than other countries for the same drugs.
Once implemented, the prices on negotiated drugs will decrease for up to 9 million seniors who currently pay as much as $6,497 in out-of-pocket costs per year for these prescriptions, Biden said.
Medicare, which mostly serves Americans aged 65 and over, pays twice as much for drugs than the U.S. Department of Veterans Affairs, which already negotiates drug prices, he said.
The drugs targeted Tuesday include big-selling blood thinner Eliquis from Bristol Myers Squibb and Pfizer, Eliquis rival Xarelto from Johnson & Johnson, Merck & Co’s diabetes drug Januvia, AbbVie’s leukemia treatment Imbruvica, Amgen’s rheumatoid arthritis treatment Enbrel, Boehringer Ingelheim and Eli Lilly’s diabetes drug Jardiance, J&J’s arthritis and Crohn’s disease medicine Stelara, and both insulin and the heart failure drug Entresto from Novo Nordisk.
Shares of drugmakers were mixed on Monday afternoon. The NYSE Arca Pharmaceutical index was up around 0.4%.
Panetta said patients will ultimately suffer because fewer breakthrough medicines will be developed in the next decades.
He said the legislation makes matters worse by not including any provisions to rein in pharmacy benefit managers to ensure that manufacturer discounts are passed down to patients.
“We continue to urge the administration and Congress to focus on policies that would make medicines affordable for patients at the point of care,” he said.
Biocom, which was founded in San Diego, represents 1,700 life science industry members across the state.
Reuters contributed to this article.
