This legislation poses the danger of decimating New Jersey’s workforce and economy.
Trenton, August 12, 2021 ― HealthCare Institute of New Jersey (HINJ) President and Chief Executive Officer Dean J. Paranicas today issued the following statement about President Biden’s drug pricing announcement:
“The HealthCare Institute of New Jersey (HINJ) opposes President Biden’s proposal to effectively impose price controls on the Medicare Part D program. While we are gratified that the President recognized the unique role the life sciences play in finding new vaccines, treatments and cures and advancing global health, the President’s proposal to implement Medicare Part D price negotiations would have disastrous effects on patient access to medicines at a time when the need to protect against COVID-19 variants, antimicrobial resistance and other life-threatening conditions is most critical.
Patients depend on medical innovation to research, develop and bring to market new vaccines, treatments and cures. The loss of R&D investment from government price controls in Medicare Part D would suppress medical innovation when we need it most. This framework does not translate to risky and expensive, R&D-dependent products with a very high failure rate such as those discovered by the life sciences.
President Biden’s proposal would do little to lower costs for patients because it does not address the problem arising from the role of middlemen – who absorb much of the $166 billion in rebates the drug manufacturers offer patients each year – in determining the way in which drug prices at the pharmacy counter are determined. If these discounts were instead passed on to patients – as intended – it would provide significant and immediate relief for patients.
While the President’s proposal to cap patients’ out-of-pocket costs would benefit patients, the proposed importation of medicines from other countries is highly problematic and would be bad for patients, bad for global health and bad for New Jersey’s economy.
As the Medicine Chest of the World, the potentially catastrophic economic impacts from the President’s proposals would be felt disproportionately by New Jersey. Our state’s biopharmaceutical jobs, vendor spending, construction activity, tax ratables, charitable donations and other workforce and economy issues are all at risk of being seriously and adversely impacted.
HINJ strongly opposes President Biden’s proposal and urges New Jersey’s federal representatives to join us in that opposition. We will continue working with our federal and state policymakers to address health care costs in ways that actually help patients. As we’ve consistently stated, passing on negotiated savings directly to patients, capping out-of-pocket costs for patients, requiring other countries to pay their fair share of advances in medical innovation, and pursuing value-based contracts can all work to lower health care costs without devastating future medical innovation and New Jersey’s economic engine.”