December 4, 2019 News, Press Releases

Reaction to White House Blog Post on H.R. 3

WASHINGTON, DC — After an independent analysis found brand-name drugmakers could earn less revenue under H.R. 3 and still be the most profitable U.S. industry, the Council of Economic Advisers (CEA) released ablog post claiming the “House drug pricing bill could keep 100 lifesaving drugs from American patients.” This is the same CEA that keeps telling Americans drug prices are going down, despite ample evidence to the contrary.

Here’s how today’s CEA report falls short:

  1. President Trump Supports Negotiation: President Trump said America should “negotiate like crazy.” H.R. 3 delivers on that promise, but the White House is already attacking the plan as it awaits a final report from the nonpartisan Congressional Budget Office. Moving forward, we hope the White House will focus on areas where President Trump agrees with House Democrats — like the need for the government to negotiate prices with drug companies.
  2. The White House, Senate, and House Plans All Lower Drug Company Profits: The Trump Administration’s International Pricing Index, the Trump-endorsed Prescription Drug Pricing Reduction Act, and the Lower Drug Costs Now Act would all lower drug company profits. The CEA claims that lowering drug company profits would reduce innovation and the number of new drugs coming to market. By that logic, CEA should also issue a report opposing the White House-supported proposals that reduce drug company profits and innovation.
  3. H.R. 3 will improve health outcomes: The CEA report warns that H.R. 3 would “reduce Americans’ average life expectancy by about four months.” It fails to mention that lower prices under H.R. 3 will mean better adherence to drugs, which will improve health outcomes and extend life-expectancy for millions of Americans. Furthermore, according to GAO, fewer than 1 in 5 new drugs are truly innovative — a fact omitted by CEA.
  4. Cut marketing, not R&D: The CEA report fails to consider that drug companies could cut marketing, sales, overhead, and CEO pay before cutting research. By its own admission, pharma will spend nearly $300 billion over the next decade on the marketing and promotion of medicines.
  5. Fuzzy Math: CEA cherry picks numbers to arrive at 100 new drugs lost. CEA combined the highest possible revenue losses for pharma under H.R. 3 with a low projection for the cost to develop a drug. If CEA relied on the low-end projection for pharma revenue losses and the highestprojection for the cost to develop a drug, it would arrive at a much lower number of drugs lost.

Read what independent experts are saying about H.R. 3

  • Memorial Sloan Kettering’s Dr. Peter Bach: H.R. 3 “would barely slow new drug discovery at all.”
  • Harvard economist Richard Frank: “Drug companies exaggerate — controlling drug prices won’t threaten innovation.”
  • Rutgers Professor Michael Carrier and Law Librarian Genevieve Tung: “Big Pharma has cried Innovation Wolf every time Congress seeks to address its shenanigans…That has to stop. It is past time for the industry to be called to account on using its get-out-of-jail-free innovation card to avoid reasonable legislation.”
  • West Health and researchers at Johns Hopkins: “Large, brand-name drug manufacturers would still be the most profitable industry sector even with $1 trillion in lower sales [under H.R. 3], all while maintaining current research investments.”
  • CBO: The bill would “lead to a reduction of approximately 8 to 15 new drugs coming to market over the next 10 years. (The Food and Drug Administration approves, on average, about 30 new drugs annually, suggesting that about 300 drugs might be approved over the next 10 years.)”
  • Bloomberg: “Two-year campaign opposing cost-saving plans featured secret payments, [and] a widely criticized consultant’s report.
  • GAO: Fewer than 1 in 5 new drugs are truly innovative.


Patients For Affordable Drugs is the only independent national patient organization focused exclusively on achieving policy changes to lower the price of prescription drugs.