Thread by @PeterKolchinsky

Dear Lawmakers @POTUS @RonWyden @SpeakerPelosi Hundreds of us biotech investors, innovators, patient advocates, & NIH academics representing >40k US jobs, >600 drugs in trials, & >$200B invested propose solutions to affordability that preserve R&D. 1/
nopatientleftbehind.docsend.com/view/a6bxibzxy…

This is grassroots, not PhRMA. We offer solutions! We support real negotiation: play products off one another to get better prices. Help patients by lowering what insurance can demand OOP for medicines they need. And save by ensuring all drugs go generic w/o undue delay. 2/

But you must not redefine the word “negotiation” to mean that government can just dictate the price of a new drug & force a company to accept it under threat of a ruinous tax. That’s not negotiation, even if you like calling it that. That’s a repudiation of basic economics. 3/

There’s not one example of an R&D intensive industry anywhere earth where investors choose to risk their capital in pursuit of the “reward” of uncertain government-dictated prices. You’re not about to invent a new kind of economics. 4/

Changing “negotiation” to mean what it doesn’t will quickly drive capital to other sectors, defunding thousands of companies, terminating over a million US jobs, & shut down all risky R&D, which is the only kind of R&D that results in breakthroughs. And you won’t save. 5/

You won’t save b/c the you failed to consider the extent of R&D loss (CBO is wrong). you failed to consider that hospitals that lose clinical trial revenues will make up losses by charging more for regular healthcare (CBO ignored that). 6/

You failed to consider that we will spend a rising fortune on hospitals and long-term care facilities, which don’t go generic, to manage diseases that could have been treated with drugs, which do go generic (CBO models don’t take this into account). 7/

We understand that you really like how well CBO scores your new definition of the term “negotiation”. But to be clear, the CBO would also score smoking favorably. How you save money for the government matters; some ideas should be off the table. 8/

Ripping the foundation of market-based pricing out from under the biomedical R&D ecosystem should be one of those things that ought to be off the table. That’s now how we are going to make today’s & tomorrow’s medicines affordable for patients. 9/

Proper insurance w/ low OOP costs is how we can all afford new medicines & old. Ensuring that all drugs go generic w/o undue delay is how we have saved trillions on drugs & can save trillions more. And preserving a market-based R&D framework is we continue to drive progress. 10/

So please read our letter. And consider watching this short animation to get a sense for the proper roles of insurance, innovation, & drugs going generics in creating value for patients (by which we mean all of us). 11/

We also want to draw attention of @ScottPetersSD @SenSchumer @Sen_JoeManchin @RepAnnaEshoo @JakeAuch and all of #congress to this important grassroots letter. @TheEconomist @WSJ nopatientleftbehind.docsend.com/view/a6bxibzxy… 12/

All we say of R&D investment calculus is true of defense sector and playing out. Read this: “[In defense sector,] Venture capitalists only want to invest in companies that already have a Pentagon contract, but small firms…

…often can’t keep the doors open long enough without external funding while waiting for the department’s contracting processes to progress.”

defensenews.com/smr/cultural-c…