Deena Bearsley

(Reuters] – While a proposed limit on Medicare recipients’ out-of pocket drug expenses would help improve access for patients, allowing Medicare to allow seniors under its government-sponsored health plan to negotiate prices may restrict innovation. Amgen Inc Robert Bradway, Chief Executive Officer of NASDAQ stated this in an interview.

Bradway spoke out in advance of the Reuters Total Health conference. The event will be held virtually between Nov. 15-18.

Legislation recently proposed by the Biden Administration and congressional Democrats would allow the federal government to forego prices on a small number of medications that are covered by Medicare.

For the first nine year after their launch, conventional prescription drugs will be exempt from negotiations, while biologic drugs (made from living cells) would remain protected for twelve years.

This agreement will also establish a $2,000 annual limit on Medicare beneficiaries’ out-of-pocket expenses and restrict annual price rises to the rate inflation.

Bradway declared, “We are going to be favorable on any access improvement.”

However, he cautioned that government “negotiating or in essence setting prices” could lead to artificial distortions of the market. This would mean that innovative people will need to determine whether they want to redeploy capital to the drug industry.

Bradway stated that more information is needed about Biden’s attempts to reach an agreement with other countries on a multi-national corporate tax rate.

Last month, 136 countries including the United States set the goal of setting a global minimum tax rate for large companies of 15%. This is well below the average 23.5% for industrialized nations.

Bradway explained that “It is essential if the U.S. wishes to continue being the epicenter in innovation for the U.S. To remain competitive.” Otherwise, it will be the same as what’s been going on for years, which has seen investors from other countries acquire innovative technology, and base that technology in lower-tax jurisdictions.

Amgen is a biotech drug company headquartered in Thousand Oaks (California) that produces the largest number of drugs for treating cancer and osteoporosis.