Statement of Peter Maybarduk, Director, Public Citizen’s Access to Medicines Program
Note: Today, the White House Council of Economic Advisers (CEA) released a statement claiming that U.S. House Democrats’ H.R.3, the Lower Drug Costs Now Act, could keep many lifesaving drugs away from American patients. The CEA report is based in part on a 2017 paper funded by the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug manufacturers’ lobby association. The paper was published by Precision Health Economics, a consultancy with clients including several prescription drug corporations and co-founded by White House CEA Acting Chairman Tomas Philipson.
Lower prescription prices are bad for you. That’s what the White House CEA seems to be telling Americans today.
By all appearances, Philipson relied on methods and conclusions from a study Big Pharma paid his firm to produce and stamped the White House seal on it.
The study wrongly assumes that lowering prices will proportionately reduce innovation. In fact, public investment contributes to the development of most new medicines. Prescription drug corporations spend more on dividends and stock buybacks than they do on research and development. Even with a $1 trillion loss, the industry still would be enormously profitable.
The White House can’t have it both ways: Ultimately, making medicine affordable requires challenging Big Pharma’s unchecked monopoly power and returning those savings to the people.