Washington, D.C., Sept. 16, 2021 (GLOBE NEWSWIRE) — Yesterday, a group of early-stage life science investors and biotech CEOs joined together with a prominent patient advocate to speak out against H.R.3, known as the Lower Drug Costs Now Act.
The panel was hosted by life sciences venture capital coalition Incubate and held at the National Press Club. The panelists warned that if lawmakers impose price controls in the pharmaceutical market, investment in biomedical research will plummet to near zero.
“If price controls are enacted, the life sciences investment equation will no longer justify
investment in R&D” opened John Stanford, Incubate’s executive director. “Investment won’t just be reduced. It will drop off a cliff.”
Panelists expanded on Stanford’s sentiments, highlighting the critical role of venture capital in the development of life-saving drugs and how rapidly that funding would evaporate in the presence of price controls.
“If the government can pick any arbitrarily low price it wants, and prevent a company from saying ‘no’ by threatening it with a ruinous 95% tax, then I could not justify any biomedical R&D investment to my investors,’ said Peter Kolchinsky, Ph.D., founder and managing partner at RA Capital. “In other words, we should expect a near total collapse of R&D funding.”
“More than 50% of FDA-approved medicines now have their start in venture-backed private biotech companies in the United States. These are the groundbreaking treatments for cancer, genetic diseases, and other scourges,” said Arjun Goyal, M.D., co-founder and managing director at Vida Ventures. “But they’ll disappear if Congress passes these price controls. Ultimately patients will lose out, both here in the United States and globally.”
“Price controls would upend these critical incentives and make it fundamentally impossible for investors to secure a return, causing them to flee the sector,” said Axel Hoos, M.D., CEO of Scorpion Therapeutics.
“I spearhead a group of in-house counsel at life sciences investment firms, numbering about 80 members,” said Sarah Reed, general counsel at RA Capital. “And we are discussing the drafting of what will have to be an escape hatch, allowing firms like ours to cease investing more money and to pull back the money they have already funded, if H.R.3 is passed in anything close to its current form.”
Speakers also noted how the policy would impact the country’s economy, global standing, and the patient experience.
“This will affect private and public companies of all sizes, jobs will be lost, and U.S. biopharmaceutical leadership will be impaired,” said Jean-François Formela, M.D., partner at Atlas Ventures. “Patients will ultimately suffer the most when potential breakthrough therapies and cures are no longer invented.”
“If H.R.3 passes, our critical funding from venture capitalists will dry up, along with our potential to develop urgently needed new treatment options,” said Joanne Kotz, Ph.D., co-founder, president, and CEO of Jnana Therapeutics. “We will all lose hope of having better medicines tomorrow than we have today. We’ll face suffering that our research could have averted. That’s just senseless.”
Finally, attendees heard from a speaker with a deeply personal stake in the policy debate.
“I’m alive today precisely because of the market opportunity present in drug discovery and development,” said Gunnar Esiason, a cystic fibrosis and rare disease patient advocate. “For the better part of my early twenties, I was teetering on the brink of end stage illness. The thing that got me through my worst days — when I was bouncing in and out of the hospital — was the idea that somebody, somewhere, was working on something for me. The idea that there could be innovations we have not even thought of yet, affords patients like myself a great deal of hope. But if H.R.3 is passed, we will sacrifice the structure that makes future cures a reality.”
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.