Biotech Firms Oppose the Independent Payment Advisory Board


Today’s Managing Health Cost Indicator is 3403


Today’s Boston Globe  highlights the full court press the Massachusetts biotechnology industry is making to convince Senator John Kerry to oppose the Independent Payment Advisory Board, Section 3403 of the Affordable Care Act.  The IPAB, which is opposed by drug companies, some physicians, and the biotechnology companies, would create an independent board which would make recommendations for lowering Medicare costs if those costs continued to increase.  Congress would have to vote these recommendations up or down without amendment – like military base closings. 

The current debt ceiling debate shows how hard it is for Congress to lower the cost of the federal government – and many of the necessary solutions to our escalating health care costs will be easily subject to demagoguery like claims of “death panels” and “bureaucratic government throttling private-sector innovation.”

Henry Aaron, in this week’s New England Journal, calls the IPAB “Congress’s Good Deed.”   He says

Among the most important attributes of legislative statesmanship is self-abnegation — the willingness of legislators to abstain from meddling in matters they are poorly equipped to manage.

If the IPAB is effective, it will lower potential profits in biotechnology.  It would be hard otherwise to control burgeoning health care costs.

Kerry’s spokeswoman said

If we’re going to protect taxpayers and control costs, it seems a little bonkers to eliminate something the experts say is our best hope of doing that before we even have a chance to evaluate it

I hope Senator Kerry will stand his ground.