WASHINGTON – U.S. Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, delivered remarks on the Senate floor blasting President Biden’s recent announcement of the first ten medications that will be subject to Medicare price negotiations established in the so-called Inflation Reduction Act. Specifically, Cassidy raised serious concerns over the negative impacts that this policy could have on research and development of life-saving treatments. Cassidy also emphasized the need to prioritize bipartisan solutions that lower drug costs for American families while also preserving innovation.
“As Ranking Member of the Senate Health, Education, Labor and Pensions Committee, I have serious concerns about the impact this policy could have on our nation's effort to develop innovative, life-saving treatments that Americans need,” said Dr. Cassidy. “Because of the IRA, the investments we're making in basic science will ultimately result in less value for patients if those discoveries don't translate into new products for that young person with a rare disease.”
“Research decisions should be driven by evidence and what is best for patients, not top-down price controls,” continued Dr. Cassidy. “Instead of partisan price controls, we should prioritize bipartisan solutions that lower drug costs and preserve innovation so Americans have access to the best possible treatments.”
Click here to watch Cassidy’s full speech.
Cassidy’s speech as prepared for delivery can be found below:
Last week, President Biden announced the first ten medications that would be subject to Medicare price negotiations established in the so-called Inflation Reduction Act. To be clear, these negotiations are a sham. A negotiation in which a company if they don't accept the government's offer have to pay a 95% excise tax on profits, is not a genuine negotiation.
To quote The Godfather, "it's an offer they can't refuse." It's the price equivalent of waking up with a dead horse head in your bed. As Ranking Member of the Senate Health, Education, Labor and Pensions Committee, I have serious concerns about the impact this policy could have on our nation's effort to develop innovative, life-saving treatments that Americans need.
The presiding officer is from Massachusetts. I was in Massachusetts visiting with small biotech firms and they say, yes, there is a biotech exemption, but there's no way for them to go from being a small biotech to being a large biotech under the IRA. That when they enter this period and they will be subject to these negotiations where you get 95% of your profit taken if you don't agree to the "negotiation," they will not have the working capital to invest in another product.
When this happens, they will be taken over by some big company, losing that innovation, losing that spark that has made Massachusetts such a hotbed for innovation, but also generating products which have benefited patients all over the world.
And so it begs the question, when government wields a heavy hand threatening to take 95% of profits unless you agree to their "negotiation," what is the cost to development of a future cure for cancer, dementia, some of the neurologic diseases which currently are devastating and curable, and any other terrible condition that a patient would have.
As a physician who happens to be a senator, I regularly come across folks who wish to share with me their medical history as a plea for help for themselves and for all those whom they represent. And they know they represent others, and the innovation in the U.S. biotech and the U.S. pharmaceutical industry is their lifeline. And they know it may not help them, but they want to help someone else. There is a community of those who have this illness. When you say, well my gosh, working capital will be taken away because the negotiation is a 95% excise tax, the negative effect of this will force some companies to cut programs and research of small molecule drugs, shift funding away from diseases with small populations, and do other things that would help those who right now do not have help.
Because of the IRA, the investments we're making in basic science will ultimately result in less value for patients if those discoveries don't translate into new products for that young person with a rare disease.
Research decisions should be driven by evidence and what is best for patients, not top-down price controls.
What's really unfortunate, Mr. President, is that the dynamic small and medium sized companies will bear the brunt of these misguided Democratic policies.
I'll say one more thing. That small company trying to become a middle-sized company and then not being able to capitalize will be bought by Big Pharma.
Big Pharma gets bigger, but the innovation of Big Pharma does not match that of the more agile, small and medium [company]. And there's something being lost here.
Instead of partisan price controls, we should prioritize bipartisan solutions that lower drug costs and preserve innovation so that Americans have access to the best possible treatments.
And there was an example of that which passed on a bipartisan basis in the previous Congress when Republicans controlled the Senate Finance Committee. But that was not what was considered this time.
With that, Mr. President, I yield.