Over the last several years drug companies and their trade groups have opposed many of the reforms proposed in Congress and supported by TSCL to lower drug prices by arguing that high drug prices are needed to recover research and development investments.
Most debates around drug price regulations have centered on how to strike the right balance between lower drug prices and greater incentives for innovation, yet no study had investigated whether there is an association between how much drug companies invest in research and development to develop new drugs and how much they charge for these drugs. If high research and development costs justified high drug prices, then an association between these 2 measures would be expected.
However, it was reported last week in the Journal of the American Medical Association Network Open, researchers found no association between a drug’s list price and research and development costs. The study looked at 60 drugs approved by the Food and Drug Administration between 2009 and 2018.
“Drug companies should make further data available to support their claims that high drug prices are needed to recover research and development investments if they are to continue to use this argument to justify high prices,” the authors said.
With some Republican Senators already proposed new legislation to repeal the new drug price reduction law just passed by Congress, TSCL hopes this new study becomes a major factor in the debate about any attempt to repeal the new drug price reduction law.