This issue brief reviews the evidence-base to assess the impact of HR 5376 on drug innovation and patient health. A large academic literature estimates the effect of future drug revenues on R&D spending and finds that on average that a 1 percent reduction in revenue leads to a 1.5 percent reduction in R&D activity. We find that HR 5376 will reduce revenues by 12.0 percent through 2039 and therefore that the evidence base predicts that R&D spending will fall about 18.5 percent, amounting to $663 billion. We find that this cut in R&D activity leads to 135 fewer new drugs. This drop in new drugs is predicted to generate a loss of 331.5 million life years in the US, 31 times as large as the 10.7 million life years lost from COVID-19 in the US to date. These estimated effects on the number of new drugs brought to market are 27 times larger than projected by CBO, which finds only 5 drugs will be lost through 2039, equaling a 0.63 percent reduction. Click here to read the full paper.
Issue Brief: The Impact of HR 5376 on Biopharmaceutical Innovation and Patient Health
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This issue brief raises substantial concerns about the unintended consequences of HR 5376 on biopharmaceutical innovation and long-term public health outcomes. While the goal of reducing drug prices is important, the estimated loss of 135 new drugs and the projected 331.5 million life years lost present a stark trade-off that deserves closer public and policy scrutiny. The contrast between these findings and the CBO’s projections highlights the need for more transparent methodologies and further debate on how best to balance cost control with innovation incentives. For more insights, visit blindcomp.com and aapkasamachar.in.
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