When the world faced the deadliest public health crisis in a century, America’s biopharmaceutical companies delivered vaccines and treatments at record speed to attack COVID-19. The high stakes of the pandemic created unprecedented urgency, but the fact that life-saving innovation came from U.S. labs isn’t surprising. The United States has been at the forefront of medical innovation for decades — with American breakthroughs dramatically cutting the cancer death rate, unlocking the potential of genetic medicine and making meaningful progress toward solving the puzzle of Alzheimer’s disease.
Regrettably, American innovation is now under threat. In the coming weeks, Congress will vote on a massive budget reconciliation plan, which currently includes policies that would establish price controls on drugs under the guise of letting Medicare negotiate prices with pharmaceutical manufacturers.
Such price controls would scare investors from our industry, choking off investment to early-stage biotech. It would reduce the size of the biopharmaceutical industry by an estimated 40 percent, leading to fewer breakthrough medicines and diminishing hope for patients who are counting on us to cure devastating diseases. The future for science and medicine has never been brighter — but at the same time, the prospects for continuing to value innovation have never looked more grim, threatening whether the promise of cures will become a reality.
Price controls would be a devastating setback from forward-thinking U.S. policies enacted over the past decades, like the Orphan Drug Act, which successfully spurred investment into rare, genetic diseases. These policies incentivized the kind of high-risk, high-reward investments in research that have expanded the frontiers of medical science and brought hundreds of new medicines to patients who otherwise had no options.
Lawmakers should instead be focused on fixing a broken insurance system by backing reforms that cap annual drug spending in Medicare and ensure predictable copays to help millions of patients see a significant reduction in what they pay at the pharmacy counter.
At early-stage biotech company Avid Radiopharmaceuticals, which I founded years ago, we focused our research in novel places. Researchers know that breakthroughs in medicine happen in a place of risk, not where the science is well understood. As CEO of Avid, I devoted much of my time to raising risk capital so that we could take those scientific gambles and follow where they would lead us.
My investors made their returns (enabling reinvestment in other startups) when Eli Lilly and Co. bought Avid and took upon itself the same risks we were pursuing at Avid — dreaming that one day we would have a breakthrough for treatment of Alzheimer’s disease. At Lilly, where I now serve as chief scientific officer, we’re proud to continue to take these risks on behalf of patients. We are a company willing to make long-term, cost-intensive investments to bring transformative medicines to patients — including advancements in diagnostics and potentially disease-altering treatments for Alzheimer’s disease. The ability of Lilly to make these kinds of multibillion-dollar investments in Alzheimer’s, over the course of decades, has been in large part because of current U.S. policies that incentivize and reward those investments.
Price controls on medicines will undo the positive effect of these policies and fundamentally scale back America’s biomedical engine. It is a foolhardy move given the serious public health challenges the world faces. According to a recent study published in the Proceedings of the National Academy of Sciences, the probability of novel disease outbreaks will likely triple in the next few decades. There continues to be huge, unmet needs in chronic diseases. The prevalence of these diseases may increase precipitously with the aging of the world’s population.
Breakthrough medicines are a critical part of managing — and one day curing — these diseases.
Take cancer, for example: We have made tremendous progress in the fight against the more than 200 forms of the disease. As a result, the cancer death rate has fallen 29 percent from its peak in 1991, in large part due to the innovation of targeted therapies. Yet we are only scratching the surface as pipelines grow with promising new medicines to attack even more cancers.
We need commonsense solutions that lower out-of-pocket costs for patients while protecting investments into innovation — not price controls that would destroy investment. This will preserve America’s unique biomedical innovation engine and fulfill the promise of a healthier future.
Daniel M. Skovronsky, M.D., Ph.D., is the chief scientific and medical officer of Eli Lilly and Co.; he also serves as senior vice president of science and technology and president of Lilly Research Laboratories.
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