Opinion: The outsized effect of ‘modest’ price controls on pharmaceutical innovation

The solution to affordability is not to set prices below the cost of making new drugs. Instead, Americans must support as robust an innovation ecosystem as possible.

Drug price controls in the U.S. Senate are being met with dire warnings that such an approach will stifle innovation, shut off the pipeline of new medicines, and cost lives down the road. Is innovation so fragile that a modest reduction in profits of global giants could seriously impact the supply of new drugs?

Small companies originate more than half of all new medicines. Yet the high-cost drugs that lawmakers would target are sold by global giants. Many of them make so much money that they return “excess” profits to shareholders through share buybacks. Congress believes that they can take a portion of those excess profits to balance the federal budget or fight global warming with little risk to productivity.

Read the rest…