On behalf of our member companies that provide 1 million jobs in our State and make NJBIA the largest statewide business association in the nation, thank you for the opportunity to provide testimony in opposition to A-2418, which could have serious impacts on the pharmaceutical industry in our state, both on the life-saving therapies and economic activity they provide.
NJBIA is concerned whenever the government considers imposing price controls on businesses. There is always a risk that the government will fail to adequately consider the different components that go into a price. This is especially true in the pharmaceutical industry where the R&D process for developing new medicines and treatments is long and costly – and often unsuccessful. This means that revenue from the subset of medicines that are successful are what a company relies on to continue its operations. We are concerned that price controls would undermine the innovative process that produces cutting-edge medicines and therapies. Unintended consequences could include companies increasing prices elsewhere to make up for lost revenue or cutting spending in certain parts of their business.
A-2418 is a downstream solution to the larger issue of rising costs in the pharmaceutical industry, and the health care industry as a whole. The proposed legislation inadequately considers the causes and reasons for high prices and, instead, would only address the outcome by imposing price controls.
The pharmaceutical industry is an important part of New Jersey’s economy, supporting high-wage jobs and boosting its economic competitiveness. Within the Life Sciences sector in New Jersey, the Pharmaceuticals (manufacturing and distribution) and Biotechnology (R&D services) subsectors supported nearly 65,000 jobs in New Jersey in 2019. The revenue impacts this legislation could have on companies could affect the jobs they provide in our state if they are forced to rein in spending.
We urge you to oppose this bill. Thank you for your consideration.