February 4, 2021 Press Releases

Big Pharma’s Big Lie: The Truth About Innovation and Drug Pricing

WASHINGTON, D.C. — A new report from Patients For Affordable Drugs takes on Big Pharma’s long-standing claim that any constraints on its pricing power will destroy innovation and access to valuable new medicines, and shows why it is clearly possible for Americans to enjoy both innovation and lower prices.

“I have an incurable blood cancer; I am completely dependent on new drugs for my survival. I can assure you that no one cares more about innovation than patients, which is why Big Pharma has built its lobbying on this threat,” said David Mitchell, a cancer patient and the founder of Patients For Affordable Drugs.

“But the industry’s tale is a Big Lie built on a tiny kernel of truth: If we reduce profits too aggressively for any business or industry, innovation will dry up. That’s why we are not proposing draconian cuts to profit or anything close to that. We are proposing to balance reasonable profit with lower prices that ensure innovation that is affordable and accessible, and this report shows that is eminently achievable,” Mitchell said.

Given that Americans pay almost four times the prices paid in other wealthy nations, and pharmaceutical industry profit margins are almost three times theS&P 500 average, it is clear there is room to lower prices in the United States and leave the industry among the most profitable — and, therefore, highly attractive to investors. A Congressional Budget Office analysis found that a large reduction in revenue of up to $1 trillion over 10 years would only result in a modest reduction in new drugs coming to market during the same period: eight fewer new drugs out of 300.

The Truth About Innovation and Drug Prices report offers detailed evidence to support five key arguments:

  1. Experts agree that some reduction in pharmaceutical revenue and profit is clearly possible without harming innovation.
  2. A new drug does not equal new innovation.
  3. Pharma exaggerates the cost of new drugs.
  4. Innovation is coming from taxpayers.
  5. Pharma’s claim that drugs won’t be available in the United States if we lower drug prices is a red herring.
The analysis from Patients For Affordable Drugs relies on research from academia; the Congressional Budget Office; the Journal of the American Medical Association; the White House Council of Economic Advisers; the National Academies of Sciences, Engineering, and Medicine; and PhRMA itself.

Patients For Affordable Drugs is the only independent national patient organization focused exclusively on policy changes to lower prescription drug prices. It does not accept funding from any organizations that profit from the development or distribution of prescription drugs.



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