Price Controls Would Harm Drug Discovery and Innovation, New Report Shows
As the Trump administration considers policy price controls on drugs, a new report released today by the Information Technology and Innovation Foundation (ITIF), the world’s top-ranked science and technology policy think tank, highlights how price controls would have a negative effect on drug development by reducing biopharmaceutical industry investment in research, thereby slowing the pace of drug discovery. Further, price controls would damage the overall life-sciences innovation ecosystem by reducing knowledge sharing between firms.
“Biomedical innovation is critical to addressing the country’s health challenges, but developing a new drug costs between $1.5 to $2.6 billion,” said ITIF President Rob Atkinson, author of the report. “Price controls and other steps to limit prices, such as weaker intellectual property protections, would lead to less R&D and would limit overall knowledge generation and sharing critical to new drug discovery.”
The report shows that biopharmaceutical firms contribute to the overall drug innovation ecosystem because the research and development (R&D) they fund spills over both to other firms and to the public domain, helping to spur more life-sciences innovation. The report also highlights how biopharmaceutical firms contribute to knowledge sharing through providing over $2.5 billion annually for university research in all fifty states, contributing to open science through over 12,500 publications in science journals in 2017, and participating in other activities such as open consortia designed to develop and disseminate discoveries.
“Price controls will slow the pace of drug innovation, and future generations will pay the price,” Atkinson said. “Without the knowledge generation that R&D stimulates, the next generation of Americans will be left with drugs that will be less effective than they could have been.”
Source: ITIF
The Information Technology and Innovation Foundation (ITIF) is an independent, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy. Recognized as the world’s leading science and technology think tank, ITIF’s mission is to formulate and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress.
