Congressional Efforts on Prescription Drugs Imperil Patients and Life Sciences Innovation in California


Until recently, there was no treatment for lung cancer patients with the aggressive KRAS G12C mutation, one of the most prevalent drivers of lung cancer.  The mutation was considered “undruggable” and, as one California patient has shared about her cancer treatment journey, she needed several surgeries as each new tumor emerged.

But now, she has another option—a first in-class pill therapy developed by a California biotechnology company.

“One thing I’ve learned with my cancer is to look forward,” the patient said.

Across California–the United States’ leader in academic and private research institutions–scientists and researchers are focused on the future as they develop new ways to treat cancer and other debilitating diseases.

All of this is now at risk.  Congress is moving forward quickly to impose strict controls on prescription drug prices.  They call their effort to lower Medicare prices “negotiation,” but don’t be fooled into thinking this is a fair process. The bill would give the federal government unilateral determination over the value of a medicine and, if a company does not agree with that valuation, a 95% excise tax would be placed on ALL gross sales of that product.  That is not negotiation, it is pure government price setting. The bill will pull almost $300 billion from the life science research industry, according to the Congressional Budget Office itself. The premise for these draconian policies is to provide relief from historic inflation. However, there is absolutely nothing in the bill that requires the federal government to pass these “savings” to patients or consumers.

On the other hand, the bill will hurt citizens and patients by gutting research and capital investment, impacting not only potential new discoveries but the many research streams that continue post-FDA approval of a product.

A study by University of Chicago economists found that price controls will cut development by as much as 18.5 percent, leading to 135 fewer new drugs available to patients through 2039. Those drugs could be the next cure or treatment for Alzheimer’s, muscular dystrophy, cancer, or the disease a loved one struggles with on a daily basis. Specific to oncology treatments, researchers found that price controls would reduce cancer research by 31.8 percent or $18 billion annually.

The legislation will also likely cost Californians good jobs. A recent study by Vital Transformation estimates the state will lose tens of thousands of jobs if this bill is enacted into law.

Rather than policies that would limit innovation without passing savings on to patients, Congress should focus on fortifying U.S. leadership in innovation, addressing foundational issues within the Medicare program, and making structural changes that encompass all actors of the health care system, including private insurers and pharmacy benefit managers.

Each day, California’s life science researchers, manufacturers, workers, and vendors strive to meet present and emerging health needs. Our community, patients, and economy should not pay the price of lost cures and jobs for more government control in health care. We urge California’s lawmakers to reject the current drug pricing bill.


Mike Guerra
President & CEO