Editor’s Note: The following is a testimony delivered by Darius N. Lakdawalla to the U.S. House Ways & Means Subcommittee on Health on May 10, 2023. More information about the hearing can be found here.
Key Points:
- Americans have benefited substantially from new medical treatments, and the United States serves as the engine of medical innovation for the world.
- Important public policies have helped stimulate medical innovation. However, significant regulatory and legislative barriers remain that impede the pursuit of valuable innovation.
- Drug price policy debates often hinge on the tradeoff between innovation and access. Our research confirms that Medicare price negotiation lowers prices in the short term but poses significant risks over the long-term to both medical innovation and the health of Americans.
- There are policy solutions, however, that can simultaneously ensure access and encourage innovation.
- A balanced policy approach includes: generous and widely available prescription drug coverage, drug prices that align with the value delivered to patients, and robust competition within the pharmaceutical supply chain.
- The Inflation Reduction Act of 2022, as currently implemented by CMS, does not align with such an approach. Targeted reforms, including reforms to CMS’ policies around coverage with evidence development, could help promote innovation and long-term health for all Americans.
Full testimony is available here.