For years when I visited my father in Italy, he would ask me about a drug that my company, Bristol Myers Squibb, was developing. It was an anticlotting medication, and my father’s interest was personal, even though he was a physician. 

He was at risk of a stroke because he had atrial fibrillation, a kind of irregular heartbeat. To contain that risk, he took warfarin to prevent the blood clots that lead to stroke. 

Warfarin, which was developed more than a half-century ago, isn’t a perfect medicine. Too little, and it won’t work. Too much, and the risk of bleeding complications becomes untenable. Weekly blood work and frequent physician monitoring are required. 

For decades, researchers sought a better solution. Then, 1995 brought a breakthrough. Researchers at BMS developed a new type of blood thinner, which targets a protein involved in blood clotting called Factor Xa. The new approach didn’t require warfarin’s monitoring and dose adjustments. 

Early on, my father quizzed me about the clinical trials for our compound, later named Eliquis. After the FDA approved the medicine in 2012, he asked when it would be available in Italy, where—because of strict price controls—it wasn’t reimbursed as quickly as in the U.S. It became available for reimbursement in Italy for atrial fibrillation in late 2013. Over the past 11 years, Eliquis has benefited an estimated 40 million patients worldwide. 

Eliquis is now in the news again. It is among the first 10 medicines subject to “negotiations” under the Inflation Reduction Act to determine what Medicare will pay for it. 

Contrary to how it has been framed, the Inflation Reduction Act’s drug-pricing program doesn’t involve negotiation in any ordinary sense of the word. If drug developers disagree with the dictated price, our only options are to pay impossibly high penalties or withdraw our medicines from Medicare and Medicaid. 

That’s no choice. We’d never do that to patients. That essentially lets the government set any price it chooses. Making matters worse, the Inflation Reduction Act will force drug makers to “agree” that the dictated price is the “maximum fair price,” no matter how unfair the price may be. 

The law will end up discouraging the development of oral drugs that help millions of elderly patients in the U.S. That’s because the Inflation Reduction Act arbitrarily offers less protection to “small molecule” medicines, including those taken in a pill or capsule, than to “large molecule” injected or infused medicines, thus penalizing the development of treatments that are more convenient for patients. It also targets treatments that help many older Americans, sending a signal that industry should walk away from medicines for the elderly. We think that’s wrong. 

Eliquis is at the top of the government’s list not because its price is high, but rather because so many Americans on Medicare—more than three million—rely on it to reduce the risk of stroke and other conditions. Though frequently prescribed, Eliquis ranked 540th among Medicare Part D drugs in Medicare spending per patient in 2021. Seniors on Medicare pay, on average, $55 a month for the drug. Half of all Eliquis patients pay $45 or less. 

It makes no sense to take a medicine that is already priced based on the value it delivers and demand even greater concessions, especially given that there is no requirement that the insurance companies that administer Medicare benefits will pass any new savings to patients. 

I share the concerns that our current system asks seniors to pay more for medicines than for any other healthcare expense. As an industry, we are open to reforms that address these challenges, but the incentives in the Inflation Reduction Act are backward. We should want more-effective and safer medicines, more medicines for America’s seniors, and more easy-to-take options. Instead, this sort of regulation will force innovative biopharmaceutical companies to make gut-wrenching choices about research and investment priorities. 

This won’t crush innovation entirely. In a couple of months, I will retire as CEO from BMS, and I know that the people working in our labs will never give up. Biopharmaceutical researchers are achieving medical breakthroughs that would have seemed like miracles a generation ago. But these steps forward aren’t miracles. They’re the inevitable result of a deep understanding of biology and a commitment to improving patients’ lives. 

The question, then, isn’t whether the engines of innovation America is known for throughout the world will continue. Instead, the question is whether bad policy will end up steering that innovation in ways that harm patients rather than help them. 

Dr. Caforio is chairman and CEO of Bristol Myers Squibb.