Negotiations or price controls? Senate Finance Committee splits along party lines over drug prices
The now dead Build Back Better Act may be the closest the Democrats ever get to Medicare drug price negotiations.
Although Senate Finance Chair Ron Wyden (D-OR) sought to resurrect Medicare negotiations in a hearing on Wednesday, Republicans in the committee made clear their opposition to negotiating, especially as they sought to convince viewers that the term “negotiations” is actually closer to price controls.
“One person’s negotiation is another person’s price controls,” Sen. John Cornyn (R-TX) said at the hearing, mentioning that there’s a greater need to “beat back some of the gamesmanship from the patent system.”
He pointed to AbbVie’s mega-blockbuster RA drug Humira and its patent fortress, which still doesn’t have biosimilar competition in the US despite years of competition in the EU, as an example of such games.
“A Medicare negotiation is just that — a process, not a price control — a market-based approach to come to a price between purchaser, Medicare and producer,” Wyden said. He similarly pointed to the widely varying cost of Humira in different countries as a reason for such negotiations.
“As of 2020, the price per [Humira] pen in Quebec, Canada was $563. List price in the US was $2,778,” he noted.
Democrat Ben Cardin of Maryland similarly noted that the US is an outlier “on what we pay, and it defies common sense” that the federal government is the largest payer for prescription drugs in the country but Medicare can’t negotiate.
Insulin was another example cited by lawmakers on both sides of the aisle as an example of drug pricing gone wrong, and as President Biden pledged in the State of the Union to cap monthly co-pays for insulin at $35.
But Republicans like Sen. Pat Toomey of Pennsylvania said there’s been “tremendous innovation” around insulin, which is why the prices have risen so quickly.
According to HHS, the average price for a standard unit of insulin in the US in 2018 was more than ten times the price in a sample of 32 foreign countries:$98.70 in the US, compared with an average of $8.81 in 32 other countries.
Finance committee ranking member Mike Crapo (R-ID) and Sen. Chuck Grassley (R-IA) also sought further compromise from Democrats around negotiating and explained how time is of the essence to get something done, especially if Republicans take over either the House or Senate after the midterms.
Sen. Steve Daines (R-MT) called on Democrats to publicly ditch the BBBA provisions, and Sen. Bill Cassidy (R-LA) urged a return to a more centrist, watered down drug pricing bill from 2019, but Democrats remained resolute.
“Without negotiation, the job’s not done,” Wyden said. “These companies can charge whatever they want.”
But it remains unknown if the Democrats will be able to get it done in time, especially if they aren’t willing to budge around negotiations.
“When I hear government price controls, I’m hearing pharmaceutical companies being afraid — this isn’t price controls,” Sen. Catherine Cortez Castro (D-NM) added.