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President Joe Biden recently relaunched his Cancer Moonshot initiative. His passion for ending cancer is commendable. Unfortunately, the policies he has enacted will undermine his quest.
The Cancer Moonshot aims to reduce the death rate from cancer by 50 percent over the next 25 years by pouring money into cancer research and improving coordination to speed up research. "We're going to end cancer as we know it. Mark my words," he said in a speech this month.
Yet his signature legislative achievement, the Inflation Reduction Act, goes in the opposite direction—levying price controls on prescription drugs and gutting the ecosystem that underwrites drug discovery.
The United States already does a better job fighting cancer than just about any other country. We have among the lowest cancer mortality rates in the world. That's in part because our drug-research ecosystem turns out more drugs than other countries'—and then makes them available to American patients.
There are currently more than 250 cancer drugs approved for use by the Food and Drug Administration (FDA). U.S. firms have at least 1,300 more in development. Nearly 50 percent of all new U.S. drugs in development—and 27 percent of drugs approved by the FDA between 2010 and 2019—are for cancer.
Developing drugs is a costly, risky enterprise. To bring just one new drug to market, companies may spend billions of dollars.Only about 12 percent of all drugs that enter clinical trials will garner regulatory approval.
Yet investors continue to give pharmaceutical companies billions of dollars because one successful drug can make up for a number of failures.
The relative lack of price controls in the United States also makes our country an appealing market for drug developers—especially in contrast to other countries that cap drug prices. Pharmaceutical companies worldwide will often invest in research geared for the U.S. market and then launch here before considering sales in other countries.
Ninety-six percent of new cancer drugs approved by national regulators between 2011 and 2019 were available in the United States in 2020.
Far fewer are available in countries with price caps. Just seven in 10 were available in the United Kingdom, and fewer than six in 10 in Canada. In some cases, it can be years before an innovative drug is available in a country with drug price controls.
The IRA ignores all this data—and applies Canadian and British-style price controls to Medicare. Since Medicare buys more drugs than any other insurer, the decline in revenue for drug companies will be significant. They won't have as much money to devote to research and development.
Investors, meanwhile, will pull funding for drug research, as they may never be able to realize the outsized returns that they can under the status quo. They'll put their capital to work in other markets. America's drug research infrastructure will be forced to scale back its ambitions. And cancer patients will be the worse for it.
The Cancer Moonshot won't come close to making up for the funding the IRA will vaporize from our drug-development ecosystem. Economists at the University of Chicago project that the law's price controls will reduce research expenditures by $18.1 billion per year. That's more than nine times the amount the Cancer Moonshot has earmarked for research.
For every new drug Cancer Moonshot research yields, 9.4 new drugs will never exist because of the IRA's price controls.
By vacuuming up drug industry revenue with price controls, Democrats will drive down investment in research and development—and thereby reduce the chance we'll find a cure for cancer. Absent change, President Biden's Cancer Moonshot may never get off the ground.
Sally C. Pipes (@sallypipes) is president, CEO, and Thomas W. Smith fellow in Health Care Policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All (Encounter 2020). Follow her on Twitter @sallypipes.
The views expressed in this article are the writer's own.
