Opinion: Are ‘modest’ drug price controls as bad for innovation as pharma claims?

Drug price controls proposed by Democrats in the U.S. Senate are being met with dire warnings that such an approach will stifle innovation, shut off the pipeline of new medicines, and cost lives down the road. Is innovation so fragile that a modest reduction in profits by global giants could seriously impact the supply of new medicines?

Small companies originate more than half of all new medicines. Yet the high-cost drugs that lawmakers would target are sold by global giants. Many of them make so much money they return “excess” profits to shareholders through share buybacks. Congress believes that they can take a portion of those excess profits to balance the federal budget or fight global warming with little risk to the supply of new drugs. The industry claims that this money sustains innovation.

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