PhRMA's Stake in Reform

Healthcare in America is at a crossroads. Although our system has many strengths, its weaknesses are leaving millions of Americans without quality care. That's why we at the Pharmaceutical Research and Manufacturers of America (PhRMA)—as an organization and an industry—have taken a firm stand: Every single person in our nation should have access to high-quality, affordable healthcare coverage and services. It's time to prevent people from getting sick instead of just treating them after they become sick. If done in a smart way, health reform will benefit patients, the economy, and the future of America. This is why America's pharmaceutical research and biotechnology companies support comprehensive reform.

Billy Tauzin

As part of reform, and to help bend the curve on rising healthcare spending in the United States, we must continue to confront the chronic-disease epidemic. Chronic diseases such as diabetes and cancer are a leading cause of death and a key healthcare cost-driver in our country. The Milken Institute, an independent think-tank in California, has estimated that lost workdays and lower employee productivity due to chronic disease resulted in an annual economic loss in the US of more than $1 trillion in 2003. Fortunately, we've made significant strides in recent years. Medical advances have revolutionized how we battle disease. Thanks in part to new medicines, death rates for cancer, heart disease, and HIV/AIDS have been sharply reduced.

This progress is real. It has improved the lives of millions of American patients, and has helped to save money by reducing the need for avoidable hospitalizations and emergency-room visits.

If done right, healthcare reform can leverage and extend this progress in several ways. Expanding health insurance coverage to all Americans will mean better access to care, particularly for those struggling with chronic conditions. Reform will ensure that people most in need of care are not denied coverage or priced out of the market because of pre-existing conditions. Better coverage will help promote improved adherence to prescribed treatments, which can improve health, prevent complications, and save money.

Health reform also must foster continued US leadership in medical innovation. The biopharmaceutical sector is one of the most research-and-development (R&D)-intensive sectors in the country. During the past five years, these companies have invested nearly $284 billion on R&D of new medicines. This sustained investment comes at a time when the drug-development process is increasingly expensive, time-consuming, and risky. It currently takes an average of 10–15 years and $1.3 billion to develop one new medicine, according to a 2007 Managerial and Decision Economics article.

America's pharmaceutical research and biotechnology companies employed more than 686,000 Americans in 2006, and supported more than 3.2 million jobs nationally. But, like other industries, many biopharmaceutical companies are being forced to make tough decisions to survive in these difficult economic times. Countries in Europe and Asia are actively trying to lure away innovative American businesses. For these reasons, it's essential that health reform preserve incentives for future investment in medical research. It's imperative, for example, that we have in place robust incentives for the development of biologics. Recently, bipartisan members of Congress joined together to support such incentives, representing a positive step toward providing researchers and investors a measure of certainty in the very uncertain world of biologics development. Furthermore, these kinds of policies are essential if we are to be successful in our efforts to cure cancer—a challenge posed by President Obama earlier this year.

Similarly, Congress must ensure that reform does not mean government price controls, which would restrict patient access to vital products and services and sacrifice jobs in this fragile economy. With these goals in mind, we will continue to work tirelessly to help make bipartisan healthcare reform a reality.

Billy Tauzin is president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), tel. 202.835.3400.