Don't stifle incentives needed to develop drugs

By Richard Zaldivar

Scientists at an International AIDS Society conference recently announced a hopeful discovery: Early treatment reduces the rate of complication and death from HIV/AIDS by more than half compared with delayed treatment.

But rather than capitalize on this discovery by expanding access to treatment, lawmakers across the country are moving to cut off the development of new medicines by imposing price controls on lifesaving drugs.

For patients suffering from HIV/AIDS, sophisticated medicines can mean the difference between life and death. What's more, today's most effective drugs actually lower overall health costs by avoiding more expensive treatments and enabling patients to live long, productive lives.

Patients with HIV/AIDS and other chronic diseases deserve policies that expand rather than reduce access to treatment.

Recent breakthroughs in HIV/AIDS treatments have been truly astonishing. Just two decades ago, the disease was the number-one cause of death for Americans ages 25 to 44.

But since the introduction of complex drug "cocktails" known as antiretroviral therapy in 1995, the death rate from the illness has plummeted by almost 85 percent. Today, 21-year-old Americans diagnosed with the disease are likely to live into their early 70s.

Antiretroviral therapy can even prevent the spread of HIV/AIDS. A 2011 study discovered that the therapy reduced the risk of acquiring HIV/AIDS from a sexual partner by as much as 73 percent. It also cut the rate of mother-to-child transmission from 30 percent in 1994 to only 2 percent in 2002.

All told, the treatment has prevented an estimated 862,000 premature deaths. For these hundreds of thousands of survivors, the treatment's value is priceless.

Even with these breakthrough discoveries, policymakers around the nation are working to cap the price of such lifesaving medications. Some in Congress want to fundamentally change the Medicare Part D program, which provides prescription coverage to tens of millions of seniors and disabled people. In effect, the proposed changes would cap drug prices by empowering government officials to purchase medicines at below-market rates.

In Massachusetts and Pennsylvania, lawmakers have put forward legislation that would limit the cost of high-priced drugs. Legislators in California have advanced a similar bill that would compel pharmaceutical companies to disclose their profits and expenses on pricey medications - a measure widely viewed as a first step toward outright price controls on drugs.

Lawmakers' desire to reduce patients' medical expenses is commendable, and we have to make health care more affordable and accessible. Discussions should focus on the broader issue of overall medical cost, not just prescription costs, to determine where we can achieve savings without reducing the ability of patients to achieve better health outcomes.

Put simply, imposing artificial limits on drug prices is counterproductive.

Making drug discovery a less attractive investment will result in fewer treatments and cures, which provide great value in improving health while also ultimately reducing overall medical spending.

Consider the cost-saving potential of new treatments for hepatitis C - a condition affecting one in four patients living with HIV/AIDS. In 2011, hospitalization costs for hepatitis C patients totaled a staggering $35 billion.

Since then, drug companies have developed a slew of new hepatitis C medicines with cure rates approaching 100 percent. Though these treatments have up-front price tags in the high five figures, researchers have determined that they're cost effective for most patients. In fact, the treatments will avert $16 billion of medical spending by 2020.

Incentivizing the development of better treatments and cures saves money in the long run. HIV/AIDS treatments, for instance, have added $615 billion to the U.S. economy by avoiding medical spending and increasing productivity.

Slapping price controls on medicines could prevent the development of medical breakthroughs such as the 44 new HIV/AIDS treatments that scientists are currently researching. That would be a human and economic tragedy.

Lawmakers concerned about burdensome prescription bills could instead push insurers to expand coverage options. Currently, nearly a quarter of "silver" insurance plans - the most popular plan type purchased on Covered California - require patients to pay at least 30 percent of the cost of certain HIV/AIDS medications. Such high cost-sharing can leave patients responsible for thousands of dollars in out-of-pocket expenses. If patients can't afford to fill their prescriptions, they'll become sicker and rack up higher health-care bills.

We simply can't hinder innovation by imposing price controls on current medicines - this would only discourage the development of new ones. Instead, expanding treatment coverage and incentivizing the development of better medicines is the surest way to reduce long-term health-care spending.

Richard Zaldivar is a founder of The Wall Las Memorias Project in California, a Latino HIV/AIDS advocacy group. richard.zaldivar@twlmp.org