By NextBestFitRecycle part of drug savings into research
A fixed share of savings from price negotiation goes to public research and late-stage trials.
Recycle part of drug savings into research.
Review ledgerHow this path connects
This path
Recycle part of drug savings into research
Requires:
Expand public R&D fundingR&D is funded by high prices, which ties innovation to unaffordabilityChosenConcrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Dedicate a share of drug savings to research
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Slower access to new drugs and technology
Directing part of price-negotiation savings to public research and late-stage trials offsets lost private research and can target unmet needs.
What it creates or worsens
- Solves only part of the problem
Allocating part of negotiation savings to public research leaves smaller savings.
- Government chooses which research gets funded
Directing negotiation savings to public research puts the choice of research winners in government hands.
Who's affected
Who gains
- People with ongoing or specialist care needs
- Slower access to new drugs and technology: Strict value assessment can delay or refuse new therapies.
- Drug and device makers
- Slower access to new drugs and technology: Lower prices reduce research returns for biotech workers and investors.
- Medical researchers and research institutions
- Government chooses which research gets funded: Well-connected institutions can benefit from politically influenced research funding.
Who loses
- Taxpayers and public budgets
- Slower access to new drugs and technology: Strict value assessment lowers payment for new products in the short run.
- Health insurers, brokers, and their shareholders
- Slower access to new drugs and technology: Strict value assessment lowers payment for new products in the short run.
- Medical researchers and research institutions
- Government chooses which research gets funded: Government priorities may leave risky or politically disfavored research unfunded.
- People with ongoing or specialist care needs
- Government chooses which research gets funded: People with rare conditions can lose research support for needed treatments.
Where it has been tried
- CBO estimate: CBO (2021) estimated that H.R. 3's price limits would mean about 59 fewer new drugs over 30 years, roughly 0.5% fewer approvals a year.Sources: Congressional Budget Office (2021)