ICYMI: NEW REPORT DEBUNKS BOGUS BIG PHARMA RHETORIC THAT SOLUTIONS TO LOWER DRUG PRICES WILL CRIMP INNOVATION

Study Finds Solutions to Make Medications More Accessible Will Not Restrict R&D and Breakthrough Cures

A new report from Patients for Affordable Drugs (P4AD), “Big Pharma’s Big Lie: The Truth About Innovation and Drug Pricing,” debunks Big Pharma’s bogus rhetoric that any action to curb the industry’s price-gouging and anti-competitive tactics will stifle innovation and research and development (R&D) — restricting access to new cures.

“Big Pharma’s Big Lie: The Truth About Innovation and Drug Pricing” offers detailed evidence to support key findings, including that: 1) A new drug does not equal new innovation; 2) Pharma exaggerates the cost of new drugs; 3) Innovation is coming from taxpayers; 4) Pharma’s claim that drugs won’t be available in the U.S. if we lower drug prices is a red herring.

“Patients want innovation, but we also want balance,” P4AD concludes in the report. “The most innovative drug in the world is worthless if it is not affordable and accessible. The fact is, people in the United States are dying right now not only because there are no treatments for certain diseases, but also because existing drugs are too expensive. Indeed, more than 1.1 million Medicare patients could die over the next decade because they cannot afford to pay for their current prescription medications.”

The report also highlights how egregious pricing practices and anti-competitive tactics have boosted profits for Big Pharma, providing substantial flexibility to lower drug prices without impacting R&D.

“Given that Americans pay almost four times the prices paid in other wealthy nations, and the pharmaceutical industry profit margins are almost three times the S&P 500 average, it is clear there is room to lower prices in the U.S. and leave the industry among the most profitable and, therefore, highly attractive to investors,” P4AD writes. “A Congressional Budget Office analysis of the impact of a large reduction in revenue of up to $1 trillion over 10 years found that it would only result in a modest reduction in new drugs coming to market during the same period: eight fewer new drugs out of 300.”

The report comes as Big Pharma continues to hike prices while Americans continue to grapple with the economic impact of the COVID-19 pandemic. Drug companies have already increased prices on more than 800 brand name drugs in the early days of 2021 as part of the industry’s traditional biennial price hikes. This past summer, Big Pharma increased prices on more than 65 brand name drugs by an average of 3.1 percent.

And while Big Pharma routinely tries to justify price hikes by pointing to research and development (R&D). The truth is:

• Price Hikes Aren’t Connected To Drug Improvements: Drug companies hiked prices on seven popular drugs in 2019 with no evidence that the drugs had been improved, resulting in $1.2 billion in increased costs.
• Big Pharma Puts Profits Before R&D: Big Pharma used a windfall from the Tax Cuts and Jobs Act of 2017 to line shareholders’ pockets, rather than invest in R&D. In fact, the single-year increase in payouts to Wall Street and shareholding Big Pharma board members and executives was 17 times larger than the increase in R&D spending.
• The Industry Is Thriving While Millions Are Struggling: 10 of the largest Big Pharma companies reported expectation-besting earnings for the third quarter of 2020 after hiking prices on American patients.

Big Pharma is busting profit and revenue expectations and receiving billions of dollars in research funding from taxpayers while millions of Americans are struggling. Engaging in price hikes during a pandemic, while receiving billions of dollars from taxpayers to help develop COVID-19 treatments, demonstrates why policymakers must act to hold Big Pharma accountable.

Read more on market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.