BBBA threatens medical innovation and American competitiveness

As Congress turns its attention toward (fail to enact) other parts of President Biden’s agenda, the BBBA appears to have died in the water.. Grab bag social spending and government regulations Which form However, BBBA would be fine progressives will return Repeatedly. After all, many of these proposals got Support (at times reluctant) for all 50 Democratic senators. With that in mind, AAF President Doug Holtz Aiken and I It took another look In the BBBA’s Drug Pricing Provisions this week and They concluded it would be a disaster for medical innovation, patient access, and the economy.

Spending on prescription drugsBoth retail and physician—less than 15 percent of total healthcare spending, but in part because of the growing prevalence of coinsurance and hefty insurance discounts, patients test directly for the cost of drugs. As a result, there is a bipartisan will to address drug prices. But while conservatives have sought to encourage choice and competition, progressives have targeted drug companies’ profits. BBBA contains files Number ofreckless drug policies, Like Medicare “negotiate” of drug prices And Inflation penalties, combinedsome promising Medicare Part D Fixes. Both of these are addressed in our paper by Holtz-Eakin.

First, the BBBA will establish a clear government price-fixing system for medicines, reaching all aspects of health the system. Although his supporters’ Allegations, the legislation does not establish a true “negotiation” of Medicare drug prices; Instead, it would enable the Secretary of Health and Human Services to dictate prices to manufacturers – that is, via A threat A punitive excise tax of 95 percent on the total profits of treatments made by their manufacturers Act Do not agree to the secretary’s demands. There will be a maximum price for the “negotiations”, but there will be no minimum price without which the Minister cannot impose further concessions. The BBBA will also cap the price of all drugs in the entire health care system for the first time by preventing the price of any drug from increasing faster than the rate of inflation.

these Suggestions hurt Patients by reducing innovation and higher launch prices. One recent study found that BBBA would result in 135 fewer reliance on new drugs, 188 fewer new indications for existing therapies, and a reduction of 331.5 million years of life among patients Until 2039. The combination of price setting and inflation sanctions will also threaten public market entry and biosimilars, jeopardizing potential savings and improving treatment options for millions of Americans.

Also, the potential is underappreciated The economic effects of these policies. BBBA It could reduce the biopharmaceutical industry’s revenue by $2.9 trillion through 2039, putting At stake is the US biopharmaceutical sector that generates more than $1 trillion in economic activity annually, employs more than 800,000 workers, and supports more than 4 million jobs across the US economy.. In the mid-1980s, with strict price controls in place, Europe saw investment in drug development and manufacture flee to the United States. Under the BBBA, the US would risk a similar loss in competitiveness to countries like India and China.

The BBBA poses a serious threat to medical innovation, patient health, and American competitiveness. while theBipartisan Medicare Part D Reforms worth watching, It’s better if policy makers ignore the rest of the BBBA Terrible, not good, very bad drug policies.

Chart review: Healthcare price growth in 2021

Margaret Barnhurst, Health Care Policy Fellow

According to the Bureau of Labor Statistics’ latest Consumer Price Index report, health care prices have grown much slower than economy-wide prices over the past year. Over the past 12 months, the consumer price index for all urban consumers (CPI-U) has jumped 7 percent, while price indices across health care and medical services have risen about 2 percent on average, consistent with the change in previous years. Across all healthcare and medical services, medical equipment prices have grown the most since December 2020 with an increase of 5.9 percent, while health insurance and care for the disabled and elderly at home have all seen price declines over the past year, at 1.2 and 2.0 percent, respectively. Notably, the Prescription Drug Price Index is unchanged from December 2020 to December 2021. Healthcare prices have historically moved in tandem with price trends in the macroeconomics over the past decade; However, prices for health care services are negotiated and set in advance throughout the year, creating a lag between the emergence of inflationary pressures such as supply costs or labor shortages and the time actually being felt through price hikes in the health care sector. As a result, some policy experts predict that higher health care prices, such as increases in insurance premiums and out-of-pocket expenses, are likely to follow the rapid rise in inflation last year.
Data source: Bureau of Labor Statistics CPI report, December 2021

Keep track of COVID-19 cases and vaccinations

Jackson Hammond, Healthcare Policy Analyst

To track progress on immunizations, a weekly check will compile the most relevant statistics for the week, with the seven-day period ending on the Wednesday of each week.

Sources: Centers for Disease Control and Prevention trends in COVID-19 cases and deaths in the United States, and trends in COVID-19 vaccines in the United States

Note: The population of the United States is 332,427601.

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