The Pharmaceutical Research and Manufacturers of America also known as PhRMA, which is a trade group in the country, despite being powerful seems to be moving towards its downfall. PhRMA CEO Steve Ubl, who joined the office in September 2015, has raised concerns over the company’s breakdown in future.
As the name suggests, PhRMA was brought into existence with a mission to be indulged in public policies including innovating new medicines for patients. Headquartered in Washington, DC, the company is an example of its high significance, which is why the PhRMA CEO is more worried about the devastating effects of its rack and ruin.
The soaring healthcare costs have become one of the major concerns for both policymakers and citizens. Yet again, the bill to reduce the healthcare costs has become a source of criticism from the affected companies.
A research disclosed that all over the world it’s the government that regulates drug prices either directly or indirectly except in the US pharmaceutical market, where the drug prices remain largely unregulated.
House Speaker Nancy Pelosi’s bill to lower prices of up to 250 drugs per year is one of the major concerns, which Steve Ubl outlined on Thursday. He supported his arguments saying that Pelosi’s lowering of drug prices would weaken the company’s ability to develop new treatments.
“If H.R. 3 becomes law, it is lights out for a lot of very small biotech companies that are pre-revenue and depend on attracting capital,” Ubl added.
In the past, Pelosi’s bill attracted appreciation from the President, who even asked for a resolution on which both the parties can agree upon. But, Senate Majority Leader Mitch McConnell (R-Ky.) declared the plan as “dead on arrival”. He has vowed to block the proposal, calling it “socialist price controls”.
Well, if the President stands in favor of the bill, it would definitely be pushed to the finish line. Against these threats, the PhRMA CEO claimed that the company would engage with the policymakers accordingly if the bill were to become a law.
The company claims that the “cost of innovation” of a drug is one of the basic reasons for higher prices, and reduction which could lead to reduced innovations. Well it’s not something new, the drug companies for years have been using such tactics in reforms that could cut into their profits.
Against the company’s arguments, Pelosi said “We will have savings that we can reinvest in innovation that benefits everyone and not just the bottom line of the pharmaceutical industry.”
Considering the possibility of the PhRMA CEO’s arguments, reducing drug prices would definitely result in reduced company profits, which in turn could reduce the incentive for investors, who might take risks by investing in failed drug companies leading to failed developments. In all, it would be a complete waste of time, money and labor.
Another possible argument is that the reduced drug prices though would benefit the citizens, who could easily get access to it, but at the same time it would put a strain on the availability of the resources. Less profits could lead to labor cost cutting, which would give less time to invent the medicines and overall lead to a downfall of PhRMA’s reputation.
A balanced package is what would support the cause says the PhRMA CEO.