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Public Policy Newsletter Article

Biocom California and CLSA release data showing devastating impact of price controls

  • 2021-03-25T15:00:00.000+0000
  • Author: Laure Fabrega

On March 24, Biocom California and the California Life Sciences Association (CLSA) issued a press release unveiling data analyzing the impact of importing foreign price controls on California’s innovation ecosystem, as proposed in H.R. 3, the Lower Drug Costs Now Act of 2019. The study was conducted by Vital Transformation, an international health economics firm and commissioned by the Council of State Bioscience Associations, Biocom California and CLSA. Click here to view the release.

This new analysis shows the impact that H.R. 3 would have on our innovation ecosystem if it were implemented. Of note, it would lower industry revenue by 56%, with one third of affected companies seeing reductions greater than 95% of earnings. Over the last 10 years, companies affected by H.R.3 invested $487 billion into venture partnerships and licensing agreements with emerging biotechnology companies, leading to 68 new approved medicines. California biotech companies produced 16 of these 68 drugs. If H.R.3 had been in place over the last 10 years, only 2 drugs would have come to market in California, instead of 16, an 88% reduction. H.R. 3 would also result in a loss of 32,000 jobs in California alone. Click here to view the data.

“These new data unequivocally show that importing foreign price controls into Medicare will slash investments in research and development, dramatically reduce the pipeline of new cures and treatments, and ultimately hurt the very patients who are most vulnerable to both chronic and life-threatening diseases,” said Joe Panetta, President and CEO of Biocom California. “It would be devastating for small California companies, which rely on capital investment to bring products to market. On behalf of California’s innovators, we urge Congress and the Administration to consider policies that would lower out-of-pocket costs for patients while continuing to foster an environment that supports innovation.”