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Christopher Atchison

One of the most important contributors to improved quality of life over the last 150 years has been the development of pharmaceuticals addressing infectious and chronic disease. Examples include virtually eliminating polio and greatly extending life for people with HIV and other chronic conditions such as cancer, diabetes and cardiovascular disease. This progress is the result of the ingenuity and tenacity of scientists and supporting systems around the world. It has also been successful because policymakers have recognized that an unused but potentially beneficial drug is a wasted opportunity and the availability of these pharmaceuticals has been advanced by both the public and private sector.

This two-prong market-based strategy of development and distribution has been effective. That is why I am concerned about a proposal that would prioritize cost over development. American policymakers are exploring the establishment of an International Pricing Index for Medicare Part B drugs. The IPI rule would set prices for certain drugs based on prices paid in 14 other countries where anti-market price controls are in effect. These countries include Japan and the United Kingdom (UK) and also Greece, Slovakia and Portugal.

These nations introduced price controls a few decades ago and as could be predicted by economists the continent has gone from an innovator to a follower since then. According to a recent report from the U.S. Chamber of Commerce Global Innovation Policy Center, in 1986 Europe invested 24% more into research and development for new medicines and treatments than the United States. Thirty years later, after introducing reference pricing, Europe invests 40% less than America.

Additionally, according to the Milken Institute, before price controls were implemented, nearly 70% of all new medicines came from Europe and less than one-third came from the United States. By 2010, the United States was producing more than half of new drugs. Furthermore, as we have generally seen in international affairs, while the United States is currently a leader in drug innovation, a new paper by the Information Technology and Innovation Foundation found China poses a significant threat to the U.S. biopharmaceutical industry. According to the Chamber of Commerce analysis, importing European pricing controls through the IPI would drive down R&D by 25% a year on average. Importing the IPI to America will make us weaker and China stronger.

Establishing price controls as described by the IPI without enabling research, innovation and new drug development would be extremely shortsighted. The reduction in investment in cures will harm Americans suffering from every single disease, and advocates for cancer patients have been especially vocal about how the IPI would impact the search for new treatments. The American Cancer Society has warned the IPI will "make it harder for cancer patients, especially those living in rural areas, to find the right provider to treat their cancer with the right drug."

We have seen this prediction play out in Europe. Of the 74 cancer drugs that hit the market between 2011 and 2018, 95% are now available in the United States. Only 74% are available in the UK. In Japan and Greece that number is 49% and 8%, respectively.

At a time when we have seen the investment of billions in the development of genomic research, with the possibility of even greater progress in addressing disease, it is time to have comprehensive strategies including research and development rather than oversimplified price control strategies which will limit future advances. What good is a cheap drug that is never developed.

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Christopher Atchison, clinical professor emeritus at the University of Iowa, is a former director of the Iowa Department of Public Health.

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