Lower Drug Costs Now Act of 2019

Floor Speech

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Mr. PETERS. Mr. Chair, I yield myself such time as I may consume.

H.R. 3 is not perfect. No bill is. But I will support it today because it is our best chance to get moving on the very pressing issue of high prescription drug prices. I hope the Senate will work with us in a good-faith manner to come up with a final bill that both lowers prices and preserves incentives for innovation.

The concerns and some outstanding questions about the effect of this bill on innovation in the private sector are legitimate. My colleagues have referenced the CBO studies. Also, the California Life Sciences Association released a report in October that predicted that H.R. 3 would make drug development particularly challenging for small and emerging companies in California.

The amendment I offer today will go a long way toward preserving and supporting biopharmaceutical innovation, and that is not an abstraction. It can be measured in jobs, breakthrough cures, and even state-of-the-art research facilities.

Innovation, research, and development are the economic lifeblood of California and, particularly, San Diego. Over the past decade, California firms have received more than 30 percent of total biotech investment in the country, and in San Diego County there are over 48,000 jobs in the life sciences sector supported by $1.5 billion in venture capital.

In San Diego alone, we have five institutions that rank among the top recipients of National Institutes of Health funding in the country, and they are doing amazing things.

One La Jolla-based research and development facility in my district recently launched a one-time gene replacement therapy that essentially halts the progression of a rare and deadly genetic childhood disorder: spinal muscular atrophy. This company is also currently investing in research to cure a genetic form of ALS.

If we aren't careful, we might put those kinds of breakthrough therapies at risk of never treating a single patient.

From the NIH and academic research institutions to philanthropy and biopharmaceutical industry, there is a network of capital today in the public and private sectors that supports innovation.

At the risk of oversimplifying, the NIH focuses on basic biomedical science, investigating the underlying mechanisms of disease, while smaller biotech companies supported by institutional investors take the basic science to the preclinical and early-phase stages of drug development.

Drug companies conduct later-stage research, fund clinical trials, and invest in startups. These financial backers, like drug companies and venture capitalists, are important because they can help close the funding gap that exists between preclinical research and the early-and later-stage clinical trials.

If H.R. 3 changes investor behavior as some predict, that could widen the gap for smaller biotech companies, the so-called ``valley of death.'' I think we can all agree that these are consequences we want to avoid.

Securing funding for the high cost of clinical trials is often cited as the key hurdle facing smaller biotech companies at the precipice of the so-called valley of death.

While the biopharmaceutical industry and the Federal Government both fund clinical trials, NIH's ability to bring drugs to market is constrained by its limited budget and a mandate to carry out its core mission of advancing biomedical research, which is not necessarily the same as bringing drugs to market.

Over time, these limitations have resulted in the declining number of NIH- sponsored clinical trials. The biopharma industry is really good at bringing drugs to market because it can afford expensive failures. The Federal Government is really good at research and development because it can ignore constraining signals of the commercial market.

We do patients no favors by pitting biopharma against government. And I want to thank Chairman Pallone and his staff on the Energy and Commerce Committee for working with me to include two priorities of mine in his bill.

I establish a pilot program that will award multiyear contracts to public and private entities like research institutions, medical centers, and biotech companies to support phase 2 and phase 3 clinical trials. That pilot program will receive $500 million every year for 5 years.

The bill also includes this amendment No. 3 before you today, which is based on my bill, the Innovation and Capital Network Act of 2019.

My amendment creates an innovation startup fund at NIH that will support the commercialization stage of research, later-stage research and development, as well as technology, transfer, and technical assistance. Specifically, it directs $500 million over 5 years to incentivize incubators, accelerators, and other financial backers to support biotech companies through early- to mid-stage clinical studies.

These two things are mutually reinforcing. NIH is free to do more drug development, and more small to midsize biotech companies can freely follow the science. In other words, these small biotechs can pursue unforeseen opportunities that could lead to a cure for cancer.

Whether you vote for H.R. 3 or not, we must continue to support and strengthen the network of capital that sustains innovation.

Mr. Chair, I hope my colleagues will support this amendment and the freedom to follow science, and I yield back the balance of my time.

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