Speaker Pelosi's drug pricing plan would harm innovation; hit small biotechs hardest; report

US House of Representatives Speaker Nancy Pelosi's Lower Drug Costs Now Act of 2019, HR3, could result in at least 56 fewer new medicines for patients over 10 years, according to a  new analysis from economic consulting firm Vital Transformation.

The study examined the impact of foreign reference pricing provisions in HR3 on treatments and cures from small, emerging US biotech companies that rely on venture capital to finance their research and development. The analysis was commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Innovation Organization (BIO) and the Council of State Bioscience Associations (CSBA).

According to the analysis, HR3 would cut revenues by more than half for companies with affected medicines, leading to a nearly 90% reduction in new medicines developed by small US biotech companies. This would have a disproportionate effect on industry work with small biotech companies, forcing hard choices and moving capital away from riskier investments where the science is tougher and economic returns are less certain.