- - Tuesday, February 26, 2019

ANALYSIS/OPINION:

Scientists searching for cures to cancer, diabetes, Alzheimer’s and other deadly illnesses may soon lose their funding, due to a misguided new proposal from Secretary of Health and Human Services Alex Azar.

The proposal would gradually reduce Medicare’s reimbursement rate for advanced drugs administered in hospitals, clinics and doctor’s offices by 30 percent. Mr. Azar claims these price controls “will save $17 billion in Medicare drug spending over the next five years.”

It’s true that price controls would save the government money, at least initially. But they’d also deter investors from pouring money into risky, expensive — but potentially game-changing — biopharmaceutical research projects.

The cuts to research funding would make it much harder for scientists to discover the cures of tomorrow. Those future medicines wouldn’t just save lives — they’d also save the government money by stemming the rising tide of chronic disease. Mr. Azar’s price-control proposal is penny-wise and pound-foolish.

Drug research is ludicrously expensive and fraught with pitfalls. Most research projects fail in the lab. And roughly 9-in-10 experimental drugs that emerge from the lab and enter human trials fail to gain FDA approval. This high failure rate explains why it takes almost $3 billion to develop just one drug.

Unlike most European nations, which impose strict price controls on medicines, the United States has a relatively free market for drugs. The ability to earn a sizeable return on successful drugs explains why a majority of world’s new drugs are invented in America. America’s researchers are currently developing more than 3,000 new medicines.

New treatments have transformed the way doctors and patients combat the rarest diseases. In 2017, researchers developed a therapy for sickle cell disease, a dangerous blood disorder, for the first time in two decades. They also discovered the first-ever treatment for Batten Disease, a neurological disorder.

Such treatments are saving lives. The United States has the world’s highest five-year survival rates for most cancers, in large part because drug companies seek regulatory approval for their medicines in America’s free-market system before seeking regulatory approval in price-controlled Europe. Fully 92 percent of all new medications are first launched in the United States.

Access to newer, more effective medicines accounts for nearly 75 percent of cancer patients’ improved survival rates in recent decades.

Price controls would halt this medical progress. They’d make it nearly impossible for research companies to earn a return on their initial investments. As a result, the investors who currently fund drug research would redirect their capital to other business opportunities that offer better returns.

Consider how price controls have wrecked drug development in Europe. In the 1970s, more than 55 percent of all new drugs were developed in Europe. Just 31 percent were developed in America.

Now, those statistics have reversed, largely due to Europe’s ever-stricter price controls, which have made America ever-more attractive for drug researchers. From 2001 to 2010, the United States generated more than half of all new medicines developed globally; Europe accounted for just one-third of all new drugs.

Price controls also force some countries to ration which drugs their citizens have access to. American patients have access to 90 percent of newly launched medicines right away. Patients in the United Kingdom, meanwhile, only have access to two-thirds. And Canadians can access just half, thanks to artificial price controls. We shouldn’t aim to emulate systems that rob patients of effective cures.

Medical breakthroughs could save patients, and the government, billions of dollars by preventing or curing chronic disease. Approximately 1,500 innovative treatments targeting Alzheimer’s, cancer, diabetes, heart disease and stroke are currently in development. If researchers produced one successful treatment that delayed the onset of Alzheimer’s by five years, the government could save over $200 billion annually by 2050.

Thanks to our relatively-free market system, Americans enjoy unbridled access to breakthrough medicines. Our patients have some of the best health outcomes in the world precisely because we’ve avoided the pitfalls of socialist price controls.

• Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest and a visiting professor at the University of Paris Descartes Medical School.

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