With Congress considering legislation to allow Medicare to use its bargaining power to negotiate lower drug prices, large pharmaceutical companies are once again arguing that proposed price controls will stifle long-term innovation in drug development.
In an op-ed in Harvard Business Review, the Commonwealth Fund’s David Blumenthal, M.D., and Lovisa Gustafsson join Arnold Ventures’ Mark E. Miller in explaining why that claim is untrue. In fact, they say, big pharmaceutical companies are no longer the dominant sources of biomedical innovation. Instead, truly innovative therapies now originate from small university research spinoffs, mostly funded by the National Institutes of Health (NIH) and philanthropy.
The key to supporting drug innovation, the authors say, is to increase NIH funding, reduce the cost and increase the speed of clinical trials, and reform patent law.
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