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Leading Venture Capital Group Concerned With Prescription Drug Deal

"As investors in biotechnology and pharmaceuticals, we're highly concerned about the potential consequences of the new drug-pricing legislation before Congress in the Build Back Better Act."

 

WASHINGTON (November 4, 2021) – Today, John Stanford, executive director of Incubate, a coalition of America’s early stage life sciences investors, issued the following statement on congressional Democrats’ latest drug-pricing proposal:


“As investors in biotechnology and pharmaceuticals, we’re highly concerned about the potential consequences of the new drug-pricing legislation before Congress in the Build Back Better Act.


“The draft bill released this week would drastically reduce investment in life science research by giving government officials the power to set drug prices.


“Venture capitalists approach investment by making bets on many different companies and technologies, knowing that while many will fail, a few will succeed. In order for us to stay in business, enormous but rare successes have to cover the losses. This is how we fuel important long shots that can have an outsize impact on health and society — like new vaccines and cures.


“The proposed bill would do away with this kind of long-shot investing, by ensuring that any new blockbuster drug would be subject to price controls after 7 years for small molecules and 9

years for biologics. Imposing price controls would cause investment in important projects to dry up. The effect on future medical research would be dramatic.


“Finally, the benefits of this bill for patients are limited. While it caps annual out-of-pocket spending for Part D patients at $2,000 — a long overdue reform — that improvement is far outweighed by the price controls that will prevent the creation of lifesaving medicines. We support efforts to lower drug costs for Americans and are pleased to see an out-of-pocket cap of $2,000 in Medicare’s Part D benefit. That is a long overdue reform. However, abandoning the free market for price controls will hurt incentives for the next breakthrough. We hope this bill will be revised before going to a vote.”


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About Incubate

Incubate is a 501(c)(4) organization of venture capital organizations representing the patient, corporate, and investment communities. Our primary aim is to educate policymakers on the role of venture in bringing promising ideas to patients in need.



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