Stephen Ubl, president and chief executive officer of PhRMA (Photographer: Andrew Harrer/Bloomberg via Getty Images)

Two sides of 'his­toric' drug pric­ing bill: Phar­ma in­dus­try blasts 'mis­take' while ad­vo­cates plan for 'first ever' gains

Both Con­gres­sion­al De­moc­rats and the phar­ma in­dus­try agree that pend­ing drug pric­ing leg­is­la­tion is “his­toric” — they just di­a­met­ri­cal­ly dis­agree on the mod­i­fi­er.

Trade in­dus­try group PhRMA’s CEO Stephen Ubl called it an “his­toric mis­take” on Wednes­day, joined by Eli Lil­ly CEO David Ricks, At­las Ven­ture part­ner Jean-Fran­cois Formela along with a hema­tol­ogy on­col­o­gy-lead­ing physi­cian and a metasta­t­ic breast can­cer sur­vivor in a press con­fer­ence.

Mean­while, Sen­ate De­moc­rats lined up their own press con­fer­ence for lat­er in the day, tap­ping pa­tient ad­vo­ca­cy lead­ers and AARP CEO Jo Ann Jenk­ins to of­fer its his­to­ry-mak­ing take.

“This leg­is­la­tion would be his­toric, and that’s not an ex­ag­ger­a­tion,” said David Mitchell, founder of Pa­tients for Af­ford­able Drugs and speak­er at the Hill event. “Why his­toric? For the first time ever, af­ter al­most 20 years of fight­ing, Medicare will be able to use its pur­chas­ing pow­er to ne­go­ti­ate low­er drug prices for Amer­i­can. For the first time ever, there are go­ing to be curbs on an­nu­al drug price in­creas­es to lim­it to no more than the rate of in­fla­tion. And for the first time ever, there’s go­ing to be an an­nu­al cope on what Medicare Part D ben­e­fi­cia­ries pay for our drugs an­nu­al­ly.”

While nei­ther side can claim vic­to­ry for now, the bill spon­sors have hint­ed that pas­sage should be ex­pect­ed as they can use rec­on­cil­i­a­tion and on­ly need a sim­ple ma­jor­i­ty to pass the bill. The House has al­so sig­nalled a will­ing­ness to re­turn from their sum­mer re­cess to pass the bill next month.

Sen­ate Dems and Re­pub­li­cans met last week with the Sen­ate par­lia­men­tar­i­an to iron out what pro­vi­sions could be in­clud­ed if they use this short-cut, but sen­a­tors who are usu­al­ly on the fence, like Sen. Joe Manchin (D-WV), are now on board.

PhRMA, not sur­pris­ing­ly, sees those pro­vi­sions dif­fer­ent­ly — with Ubl call­ing Medicare ne­go­ti­a­tions “non­sense.”

“An in­no­v­a­tive drug­mak­er has two choic­es un­der this bill — ac­cept the gov­ern­ment’s price or pay a 95% tax on the sale of that med­i­cine,” he said, adding, “That’s not ne­go­ti­a­tion, that’s gov­ern­ment price set­ting. Let’s be hon­est and call it what it is.”

PhRMA is al­so unit­ed in the view that the bill’s pro­vi­sions, in­clud­ing a cap on the num­ber of years phar­mas can in­de­pen­dent­ly set drug prices, will stymie in­no­va­tion, and keyed in on can­cer treat­ments as an ex­am­ple.

Ricks said the bill will af­fect “de­ci­sions we make about how to in­vest in in­no­v­a­tive med­i­cines and those in par­tic­u­lar for can­cer.”

He out­lined two spe­cif­ic ef­fects on a like­ly de­crease in drug de­vel­op­ment for rare can­cers with small­er pop­u­la­tions (which cost just as much to de­vel­op as those for larg­er tar­get au­di­ences) and slow­ing ear­ly stage can­cer drug de­vel­op­ment. Can­cer drugs are of­ten ap­proved for lat­er-stage use, then move ear­li­er over time and ad­di­tion­al re­search to get to ad­ju­vant us­es, he said.

“Man­u­fac­tur­ers and in­vestors won’t sup­port that type of se­quen­tial de­vel­op­ment (any­more),” he said.

An­oth­er point of con­tention is the im­pact on new drug de­vel­op­ment. The Con­gres­sion­al Bud­get Of­fice (CBO) es­ti­mat­ed the bill would re­duce drug­mak­ers’ 1,300 to­tal ap­provals by about 10 drugs over the next three decades.

Ubl said the CBO “just got it wrong.”

He point­ed in­stead to Uni­ver­si­ty of Chica­go re­search ear­li­er this year that es­ti­mat­ed 135 few­er drug ap­provals through 2039 amid its pro­ject­ed drop of $663 bil­lion in R&D spend­ing.

Ricks said, “I would be shocked if the im­pact of this bill doesn’t re­sult in 15 few­er med­i­cines from Eli Lil­ly and Co. alone. I think that would im­ply one every oth­er year that we can­celled be­cause of this. But right now, 40% of our port­fo­lio are small mol­e­cules. We’ll need to reeval­u­ate every sin­gle one of those projects for vi­a­bil­i­ty.”

He al­so pre­dict­ed the po­ten­tial for R&D in­no­va­tion to leave the US, point­ing to the fact that R&D moved from Eu­rope to the US be­cause “Eu­rope has the same harm­ful poli­cies as em­bed­ded in this bill” caus­ing in­vest­ments to shift.

Image courtesy of The Janssen Pharmaceutical Companies of Johnson & Johnson.

Pro­tect­ing the glob­al phar­ma­ceu­ti­cal in­no­va­tion ecosys­tem – what’s at stake?

We are living in a new era of healthcare that is rapidly advancing progress impacting patient outcomes and experiences. We’ve seen a remarkable pace of transformational innovation, applied research, and advanced clinical development over the last decade.

Despite this tremendous progress, there is much more work to be done, and patients are counting on us – now more than ever – to continue that momentum. At the heart of our industry is a focus on developing and delivering medicines for some of the world’s most challenging diseases, including those that have few or no effective treatments today.

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Photo: Ida Marie Odgaard/Ritzau Scanpix/Sipa USA/Sipa via AP Images

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