Restore Medicine Innovation to Help Make America Healthy Again

On the way out of office, the Biden administration took one more jab at U.S. patients. On Friday, the Department of Health and Human Services announced a new group of prescription drugs that will fall prey to government price controls—including the popular diabetes medication, Ozempic.
Donald Trump has no shortage of issues he wants to tackle during his second term—extending the Tax Cuts and Jobs Act, securing the border, and tackling burdensome small business regulations among them. But working with allies in Congress to walk back the ill-fated government manipulation of the prescription drug market should be added to the list.
The problem stems from the sorely misnamed Inflation Reduction Act (IRA), which was signed into law by Biden in 2022.
Among provisions, it empowers the federal government to force companies to sell medicine at below market prices to Medicare. Proponents of the policy will argue the law simply allows the Department of Health and Human Services to “negotiate” prices with drugmakers. But that’s nonsense. Negotiating with the government is not like haggling over the price of a melon at a farmers market. It’s more akin to dealing with a gangster like Al Capone.
If a manufacturer refuses the price offered by Uncle Sam, not only does the company lose out on a big chunk of the patient market but it is subject to a maximum 95 percent excise tax on that product’s sales—meaning it becomes economically unviable. It’s the government’s way or the highway.
The policy jeopardizes the research-and-development process for new lifesaving treatments, therapies, and vaccines—limiting patient access to innovative healthcare down the road.
The process of developing a new medicine is complex and arduous, making it an extremely expensive undertaking. On average, it costs more than $2 billion and takes roughly 10 to 15 years. And that’s for successful products. Less than 12 percent of drugs that make it to clinical trials get across the finish line. So, investments associated with failed products also have to be baked into company budgets.
High standards around the drug approval process helps to ease people’s minds by confirming that treatments administered at hospitals or drugs purchased at the pharmacy counter are safe and effective. In fact, when combined with the vibrant community of researchers, doctors, and scientists, this assurance is why Americans enjoy the most cutting-edge healthcare in the world.
But government regulators can’t have the best of both worlds. To preserve the pipeline of new innovative treatments, therapies, and vaccines, drug companies must have the opportunity to recoup investment rather than be forced to sell products at below-market rates. Unlike the federal government, businesses don’t have a blank check to fund unlimited spending via debt.
The real-world consequences are already unfolding. According to Incubate, since passage of the drug price controls, 40 research programs have been halted and more than 20 drugs have been discontinued. Examples include medications to treat type 2 diabetes and psychiatric disorders, as well as efforts to develop new oncology therapies.
Translation: Patient access to cutting edge healthcare is being compromised.
As Donald Trump gains his Oval Office sea legs for a second term, his administration is focused on executing an aggressive agenda ranging from fiscal policy to advancing national security. Hopefully, his healthcare team—and its allies in Congress—will also push for reforms that restore the country’s innovative medicine supply chain.
Dr. Chris Stansbury is a partner at West Virginia Eye Consultants. He is a former Republican member of the West Virginia House of Delegates, as well as a partner of the Job Creators Network Foundation.