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Recently, the House Subcommittee on Health held a hearing on Capitol Hill to discuss “21st Century Cures: the Role of Incentives in Advancing Treatments and Cures for Patients.” Energy and Commerce Committee Chairman Fred Upton (R-Michigan) and Health Subcommittee Chairman Joe Pitts (R-Pennsylvania) expressed their eagerness to address issues surrounding the introduction and accessibility of innovative treatments. Representative Upton noted that “we lack effective treatments for almost 95 percent of known diseases and over 95 percent of drugs in development do not make it to market.”

Additionally, Dr. Sam Gandy, who leads research on Alzheimer’s Disease at Mount Sinai, gave us some startling statistics about Alzheimer’s:

  • Half of people over 85 suffer from Alzheimer’s, with the other half serving as caregivers.
  • Medicare and Medicaid covered $150 billion in treatment costs for those with Alzheimer’s in 2014.
  • If scientists were able to develop a drug that slows the onset of this disease by just five years, the amount of people who suffer from the disease in their lifetime would be significantly reduced and it would save half a trillion dollars in future treatment costs.

Dr. Gandy closed his testimony with the sad realization that despite these statistics, “there is currently nothing on the horizon that will make an impact on Alzheimer’s.

High level of protection from competition keeps prices high

Dr. Steven Miller turned the committee’s attention to our system’s failure to make the products of innovation affordable for patients in large part due to the high level domestic protection from competition among manufacturers, thus enabling companies to place very large price tags on medicine.  He used Sovaldi, a new drug to treat Hepatitis C, as an example. In the U.S., this drug costs $84,000 compared to $55,000 in the U.K. and only $900 in Egypt.

The need for greater economic incentives

Mike Carusi, a partner at a firm that invests in healthcare companies, pointed out another threat to innovation and accessibility – greater economic incentives are offered abroad in countries like Ireland and Singapore. For instance, in Europe, a product can be approved 3-5 years sooner than in the U.S. This means pharmaceutical companies are now looking to Europe as a place to run trials on new drugs so they can market their drugs sooner. As a result, investment companies like Mr. Carusi’s are also heading overseas.

With so many medical issues remaining unaddressed, there is much room for pharmaceutical development in the American healthcare system. And, as the issues presented in this hearing demonstrate, there is also much room for improvement in encouraging these developments. The Hatch-Waxman Act and MODDERN Cures Act have been valuable steps toward progress.  However, the committee members and witnesses agreed that a greater commitment to research and advancement are crucial in sparking innovative treatments for patients.

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