The pandemic has illustrated just how valuable the biopharmaceutical industry truly is, both in terms of the health care it provides and the economy it sustains. As a major asset to our state, New Jersey drug companies not only have our gratitude, but deserve our continued support. Unfortunately, government officials’ recent legislative activity could undercut those efforts.
Recently, members of the New Jersey Legislature introduced A2418, a piece of legislation intended to tamp down on health care costs throughout the state. To do that, the bill would establish a Prescription Drug Affordability Board — an entity imbued with the authority to institute “upper payment limits,” or price controls, on prescription medications purchased by or on behalf of the state.
Despite its good intentions, a top-down government solution like A2418 would cause far more problems than it seeks to solve. The Prescription Drug Affordability Board would likely succeed in instituting a bevy of price controls over the cost of medication — but, in the process, it would also chill health care innovation, stall new industry development and lead to larger repercussions such as the transfer of much-needed jobs outside the state. That’s anything but affordable.
Currently, New Jersey is a major home for the pharmaceutical and biomedical industries. These businesses work collaboratively to vaccinate, treat and save the lives of those affected by COVID-19. They innovate, developing life-sustaining medicines to tackle everything from cancer and rare diseases to the common flu. But, just as important, the biopharmaceutical industry provides New Jersey with economic stability.
The sector directly supports more than 60,000 high-skill, high-wage professionals and generates $83.4 billion in economic output. All in all, over 305,000 New Jerseyans have jobs, at least in part, due to biopharmaceutical companies. People of myriad professions directly and indirectly contribute to the tremendous work the industry accomplishes. Yet, A2418 places all of that in jeopardy.
In implementing price controls over prescription medications, the Prescription Drug Affordability Board would effectively force companies to make hard decisions about future investments. As a result, high paying, skilled-labor jobs may be lost as companies scale back new drug development projects, impacting not only the research and health care sectors, but also construction and factory production workers.
Moreover, the lost opportunity would stretch into our downtown areas if these companies decide to go out of state, creating a downstream impact when these large corporate headquarters are left vacant. This means lost work for those that are the backbone of New Jersey, and could touch independent companies in a variety of industries, from information technology, landscaping and building maintenance services to our downtown delis, dry cleaners and day care centers.
Ultimately, A2418 would hamstring a key driver of the New Jersey economy — precisely at the start of our state’s recovery. The issue of patients’ high out-of-pocket drug costs is certainly a serious one that the Legislature should address. However, the Prescription Drug Affordability Board’s price controls are the wrong approach. That would only serve to jeopardize the health of this state’s economy and the thousands of jobs supported by industry — and that’s something towns throughout New Jersey simply cannot afford.
Adrian Mapp is the mayor of Plainfield and a member of the Mayors’ Committee on Life Sciences.