One of the main goals of health care reform was to control costs, while still being able to deliver effective care. What this approach did not consider is that “the pressure to control health care costs will lead to lower prices for drugs and medical devices.”
With less income generated for companies who heavily invest in researching and developing these drugs, innovation in medicine and the life sciences companies becomes “less attractive.” Essentially, by attempting to “control” costs, health care reform will stifle innovation, something a recent white paper also asserted. This concern was the motivating factor for “a group of venture capitalists and entrepreneurs this week to launch a national alliance to promote policies and regulations that favor US medical innovation,” as the Boston Globe reports.
The group, called the Medical Innovation and Competitiveness Coalition, or MedIC, “will push for tax breaks and speedier approval of new products.” It will be affiliated with the National Venture Capital Association, a trade organization representing investors in high-tech and life sciences start-ups, including hundreds in the Boston area.
According to the Globe, “MedIC coalition members fear the drive to control medical costs, combined with a lack of government incentives and a cumbersome approval process for drugs and devices, threatens the country’s long-held global leadership position in biotechnology, medical gear, and other life sciences niches.” In a recent Congressional hearing we covered, those testifying expressed the same sentiments.
Consequently, as David Schenkein, a MedIC steering committee member and chief executive of Agios Pharmaceuticals pointed out, America is “at serious risk of losing that lead and losing the ability that lead gives us to create leading-edge jobs.’’ Schenkein, whose company is a venture-backed Cambridge start-up developing cancer drugs, said “there are very few incentives in the United States right now for entrepreneurs to move into this field.’’
In fact, Schenkein, who is also a practicing physician in hematology oncology at Tufts Medical Center in Boston, explained to the Globe that the “key jobs in specialized areas such as drug discovery and testing have been migrating to China, India, and European countries in recent years.” Consequently, these factors coupled with recently enacted legislation and policies, which affect academic medical centers, medical institutions, and medical organizations by increasing the scrutiny of working with industry, America is beginning to create an environment that will drive our best experts abroad.
To attempt preventing this trend, “the new coalition will lobby for measures such as extending a research and development tax break to small biotechnology companies, while providing research data to policy makers and educating lawmakers and the public on the importance of medical technology to the US economy.”
It is important that this group address these issues because many consumer groups “say controlling the price of medical care is crucial to making those reforms work.” While controlling health care costs is something we must address, attacking the companies we pay for services is the completely wrong way of going about it. Industry, in collaboration with academia, government, and non-profit organizations has continuously advanced healthcare and medicine for decades. These breakthroughs cost tremendous amounts of money, and take significant periods of time. The insurance companies are the ones deciding to put the blame on the drug and device industry for being innovative and discovering new treatments by not covering or paying for them.
The reality is, families who “are shelling out more and more each year to pay for their health care bills’’ are doing so because industry has given them the treatment and prevention necessary to maintain longer, healthier lives. Insurance companies are the ones deciding not to cover such breakthroughs, and stifling such progress will only continue to make things more difficult and expensive for patients.
Some believe that “industry has helped drive up prices by courting doctors and marketing costly copycat treatments when existing or generic remedies work just as well.” First, we would point out that without the original brand-name drug, generics would not exist in the first place. Second, every treatment a doctor chooses is not only their legal choice to make, it is also based on scientific research and review of data and clinical experience. Doctors are not making decisions based on marketing; they practice evidence-based medicine.
Another issue the coalition will focus on is broad-based reform of the Food and Drug Administration (FDA), “which life sciences executives and investors complain has inhibited innovation.” Schenkein explained that since the cost of drugs and devices is related to everything the FDA requires to get a product approved, everything from preclinical approval to trials to regulations on commercialization, the FDA has to be careful not to “put so much pressure on the price of new drugs and devices that we lose the ability to innovate.”
Ultimately, the positions that MedIC maintains should be firmly supported. If America is to uphold our superiority in creating jobs in healthcare, life sciences, and medicine, we must remove the regulatory burdens and institutional barriers that are making innovation and discovery more difficult. Accordingly, as MedIC brings these issues to the public and Congress, we need more groups and consumers to realize that the more we try and put the blame on companies developing our lifesaving treatments and making our lives longer, the less likely they are to continue their work in our country.
We need to support a more collaborative effort between industry, academia, and the government. Innovative strategies by definition include multiple stakeholders, and to put one at a disadvantage is unfair and contrary to the progress America stands for.