Drug pricing is becoming a hot political issue in Washington DC, with polls showing widespread bipartisan support for congressional action to control the cost of new medicines broadly. While this is political red meat for the base, the reality is that price ceilings on medicines as they are proposed in US House Bill H.R. 3. will weigh heavily on the U.S. biotech sector and particularly on California, which has dominated the development of new cutting-edge medicines over the last decade. California and has been responsible for nearly 25% of new drug discoveries in that period, but with many state politicians supporting the bill, it is at risk of seeing industry revenues cut by nearly 40%, which will severely impact its biotech sector.In this podcast, we speak with Keith Murphy, CEO and Founder of Viscient Biosciences and a board member of the California Life Science Association (CLSA), and Oliver Rocroi, Vice President of CLSA. We discuss the looming challenges that one-size-fits-all pricing models such as reference pricing place upon the global biotech ecosystem and try to answer the question “How did we get here?” We also highlight possible solutions that the successful accelerated development of COVID-19 vaccines foreshadow and reflect on how Europe is struggling to vaccinate its population after putting in hard price ceilings in its vaccine procurement negotiations, which are now limiting supply and access for the EU public at large. This podcast further outlines in depth how the entirety of the funding landscape responds to financial incentives and how the risk-reward calculations for VCs would be impacted by radical reductions in revenue. We highlight the areas of research, such as rare diseases and neurological disorders (e.g. Alzheimer’s, Parkinson’s), that are likely to be cut first if H.R. 3 becomes law. Lastly, we challenge the system to better respond by focusing on value and not on price, and call out industry bad actors who use intellectual property to block generic access.See omnystudio.com/listener for privacy information.

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