Washington watch

House Speaker Nancy Pelosi’s Lower Drug Costs Now Act (HR3) imposes strict price controls, taxes, and regulations on biopharmaceutical companies.

The Congressional Budget Office expects this to cost the drug researchers and makers $1 trillion over the coming decade.

Many HR3 proponents acknowledge this government price-setting will choke off private-sector research funding.

They say 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 money to replace private drug companies.

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 sick patients.

HR3 would gut private-sector innovation. Pharmaceutical firms spend roughly 20% of revenues on research and development. A $1 trillion drop in revenue would result in a loss of about $200 billion for R&D.

Democrats hope to route some of the money from price controls to the NIH. In theory, the agency could use that money 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 take on the arduous and expensive drug development process. It takes more than 10 years and $2 billion to develop 1 successful drug.

67% to 97% of drug development is conducted by the private sector, according to the Tufts University School of Medicine.

The NIH simply doesn’t have access to that kind of capital. In 2017, US drug companies spent $97 billion on R&D – 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 depends on Congressional whims in charge would turn it into a political circus.

Drug development – a process fraught with failure – simply isn’t effective.

Less than 12% 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.

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