President Biden and Democrats move to negotiate drug prices a rare defeat for Big Pharma

By Ahmed Aboulenein

WASHINGTON (Reuters) – Big Pharma has spent more than any other industry this year to lobby Congress and federal agencies, a Reuters analysis shows, but is still on track for a major defeat over a bill President Biden and Congressional Democrats are expected to pass without support from Republican, enabling negotiations on prescription drug prices.

Despite the pharmaceutical industry spending at least $142 million on lobbying efforts, the $430 billion Inflation Reduction Act to change climate, health and tax policies cleared the biggest hurdle last week when Democratic lawmakers passed it in the Senate.

The U.S. House of Representatives is also expected to approve it Friday for President Joe Biden to sign Its enactment would represent a rare defeat for the pharmaceutical industry and set a new precedent for curbing drug prices in the world’s most lucrative drug market, congress and industry officials said.

“This is an important first step,” Democratic Senator Patty Murray, chair of the Senate health committee, told Reuters. “It’s the first time we’ve been able to take such a step to lower drug prices…which paves the way for us to do more.” Health policy experts say the bill reflects the weakening influence of the pharmaceutical industry on the Democratic Party and that the main argument against price negotiations — that it stifles innovation — is no longer convincing to the public.

An October poll by the Kaiser Family Foundation found that 83% of Americans, including 95% of Democrats and 71% of Republicans, want the federal Medicare health plan for seniors to negotiate prices.

“The pharma guys have raised the bar by throwing everything but the sink at this,” said Senator Ron Wyden, a Democrat who chairs the finance committee.

The industry’s powerful trade association, Pharmaceutical Research and Manufacturers of America (PhRMA), in a public letter urged senators to reject the bill. The president, Stephen Ubl, told Politico that lawmakers who vote for it “wouldn’t get a free pass.”

“Few associations have all the tools of modern political advocacy at their disposal in the way that PhRMA does,” he said.

A PhRMA spokesperson said the group would continue to work with all lawmakers. He did not address Ubl’s comments about holding lawmakers accountable.

“We may not agree on every issue, but we believe engagement and dialogue are important in fostering a policy environment that supports innovation, a highly skilled workforce and access to life-saving medicines for patients,” spokesperson Brian Newell said in an email. .

PHARMA’S PLAN A Reuters analysis of data on OpenSecrets lobbying and campaign contributions shows that the pharmaceutical industry spent at least $142.6 million on lobbying Congress and federal agencies in the first half of 2022, more than any industry , and at least $16.1 million in campaign contributions during the current midterm election cycle that began in January 2021.

Nearly two-thirds of the money spent on lobbying, about $93 million, came from PhRMA and its member companies.

The pharma campaign argued that prescription drugs do not contribute to inflation, citing an average price increase of 2.5% over the past year compared to a 17% increase in health insurance prices.

Critics say the numbers combine expensive branded drugs with much cheaper generics, masking the impact on patients’ costs. A KFF study estimated that prices rose faster than inflation for half of all drugs covered by Medicare in 2020.

The industry has long warned that price cuts in the US market would hamper its ability to invest in the development of new drugs.

With help from industry-backed Democrats, the bill’s provision for drug price negotiations was scaled back in November, allowing Medicare to focus on an annual cap of 20 of the most expensive drugs by 2029, rather than a first. proposal to lower prices for 250 drugs. treatments.

Opponents of the more dramatic restrictions included Senator Kirsten Sinema and Representative Scott Peters, two of the largest recipients of industry donations, worth more than $201,000 and $320,000 respectively, according to OpenSecrets data.

“We have created a good space for investors to recoup their investment, which is constantly focused on developing new drugs,” Peters told Reuters.

“I still think they’ll come out well here.”

WHAT NOW?

Democratic staffers, industry executives and policy experts said the bill’s wide popularity, combined with pressure on Democrats to pass meaningful legislation ahead of November’s midterm elections, helped win the drug industry’s campaigns. .

“With this vote, I can imagine Pharma realizing that they don’t have many friends among the Democrats anymore,” said Larry Levitt, vice president of health policy at KFF. “Pharma sees this as the camel’s nose under the tent, and it probably is.”

The industry will likely try to mitigate the bill’s effects as much as possible, policy experts said.

“They’re going to take this through the courts. And I suspect they’ll try to change the legislation,” said Mark Miller, a former government health policy officer who is now executive vice president of health care at Arnold Ventures.

To what extent the account terrifies investors remains to be seen, as many of them view pharmaceutical stocks as one of the safer options during an economic downturn.

Sentiment is at a multi-year high for US Pharma and we do not view the IRA drug reform as a significant change in investor positioning, according to a note from JPMorgan analysts.

(Reporting by Ahmed Aboulenein; additional reporting by Richard Cowan in Washington and Lewis Krauskopf in New York; editing by Michele Gershberg and Deepa Babington)

 

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