House Drug Bill Would Undermine and Politiize Scientific Research
By Sandip Shah
House Speaker Nancy Pelosi's Lower Drug Costs Now Act (H.R.3).imposes strict price controls, taxes, and regulations on biopharmaceutical companies. The nonpartisan Congressional Budget Office expects the measure to reduce the industry's revenues by $1 trillion over the coming decade.
Many H.R. 3 proponents acknowledge this government price-setting will choke off private-sector research funding. But they believe the National Institutes of Health -- the federal agency that funds most basic scientific research -- could fill the gap left by private researchers.
It can't.
The NIH does important work. But it possesses neither the personnel nor the resources to replace private drug companies. And even if the NIH could fill that role, we shouldn't want it to. Putting the government in charge of drug development would politicize scientific research and prove disastrous for patients.
H.R. 3 would gut private-sector innovation. Pharmaceutical firms spend roughly 20 percent of revenues on research and development. So a $1 trillion drop in revenues would result in approximately $200 billion less R&D spending.
House Democrats hope to reroute some of the money the government saves from price controls to the NIH. In theory, the agency could use that funding to pick up the private sector's slack.
In practice, this plan won't work. The NIH doesn't try to develop medicines. It focuses almost exclusively on basic research, such as how certain proteins and genes affect people's health.
It's up to private companies to embark on the arduous and expensive drug development process. It takes more than 10 years and $2 billion to develop one successful drug. "Sixty-seven percent to 97 percent of drug development is conducted by the private sector," according to recent research from the Tufts University School of Medicine.
The NIH simply doesn't have access to that kind of capital. In 2017, drug companies spent $97 billion on R&D in the United States -- close to triple the entire NIH budget.
Even if it were possible, Americans shouldn't want the government to play a larger role in drug development. Placing a federal agency -- whose annual budget varies based on Congress' whims -- in charge would turn scientific discovery into a political circus.
Drug development -- a process fraught with failure -- simply isn't an effective use of public resources. Less than 12 percent of drugs that enter phase 1 clinical trials ultimately receive FDA approval. Between 1998 and 2014, drug companies engaged in 96 failed attempts to develop treatments for melanoma, 75 for brain cancer, and 167 for lung cancer.
Putting the federal government in charge of creating new medicines would waste billions of dollars of taxpayer money on drugs that never reach patients.
Sandip Shah is founder and president of Market Access Solutions, which develops strategies to optimize patient access to life-changing therapies.
