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 analysis offers a critical perspective on the long-term implications of HR 5376, especially its potential to drastically reduce pharmaceutical innovation. The comparison to COVID-19 life years lost really highlights the scale of the projected impact. It’s essential that policy decisions weigh both immediate cost savings and future health outcomes. Similar discussions on healthcare innovation are also gaining attention in India. Read more at Kannada News
The findings presented in this issue brief underscore the potentially far-reaching consequences of HR 5376 on pharmaceutical innovation and public health outcomes. By projecting a significant decline in R&D investment — and consequently a sharp drop in new drug development — the analysis raises serious questions about how such policy changes might shape the future of global healthcare. While the intention behind HR 5376 may be to make drugs more affordable, the long-term trade-off in terms of lost innovation and life years cannot be overlooked. This is not just a U.S. concern; countries like India are also closely watching these developments, as they can influence global research pipelines and access to new treatments. For ongoing insights into how such policies impact healthcare innovation and public welfare, you can explore more at News Today.
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