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.
