Amgen CEO Says US Medicare Spending Cap Will Improve Access By Reuters

© Reuters. FILE PHOTO: Robert Bradway, President and CEO of Amgen, speaks during an interview on the sidelines of JP Morgan’s 38th Annual Healthcare Conference in San Francisco, California, United States, on January 13, 2020. REUTERS / Stephen Lam / File Photo

By Deena Beasley

(Reuters) – A proposal to cap reimbursable drug costs for Medicare beneficiaries would improve patient access, but allowing the U.S. government’s health plan for seniors to negotiate prices could limit innovation, Amgen Inc (NASDAQ 🙂 CEO Robert Bradway said in an interview.

“We have to make sure that we are very careful not to destroy the very system that brings the innovation that we need,” Bradway said in an interview ahead of the Reuters Total Health conference, which runs virtually Nov. 15-18.

The latest legislation proposed by Congressional Democrats and the Biden administration would give the federal government the ability for the first time to negotiate the prices of a limited number of drugs paid for by Medicare.

Conventional prescription drugs would be protected from trading for the first nine years after their launch, while biologics, which are made from living cells, would be protected for 12 years.

The agreement would also set an annual cap of $ 2,000 on out-of-pocket expenses for Medicare beneficiaries and limit annual price increases to the rate of inflation.

“We’re going to look favorably on anything that improves access,” Bradway said.

But he warned that allowing the government to “negotiate or actually fix the prices” risks causing “artificial distortions in the market with the effect that innovators will have to decide whether to reallocate capital from the drug industry.”

Bradway said there was also a need to learn more about the Biden administration’s efforts to agree with other countries on a multinational corporate tax rate.

A group of 136 countries, including the United States, last month set a target of a minimum global tax rate of 15% for large companies, well below the current average of 23.5 % in industrialized countries.

“This will be important if the United States is to continue to be the epicenter of innovation for the United States to remain competitive,” Bradway said. “Otherwise, we’ll see what has been going on for years, which is that investors outside of the United States acquire innovative technology and base that technology in low-tax jurisdictions.”

Amgen, based in Thousand Oaks, Calif., Is one of the world’s largest manufacturers of biotech drugs, including treatments for cancer, osteoporosis and rheumatoid arthritis.

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