Who’s the toughest on drug prices? A game of political one-upmanship is driving the policy debate in Washington
Earlier this week we got a look at Senator Kamala Harris’ position on drug prices. She’s proposing that HHS take an average price from single-payer systems like the UK, Germany and Canada — which leverage market access for lower prices — and use that to set the US price. Anything drug companies collect above that would be taxed at a rate of 100%.
And the rhetoric is scathing:
While families struggle to make it to the end of the month, pharmaceutical companies are turning record profits. They’re spending nearly as much on advertising as R&D. They’re manipulating their market power to hike prices on lifesaving generic drugs. They’re making twice the profit of the average industry in America and still increased drug prices by 10.5% over the past six months alone. Meanwhile, they are charging dramatically higher prices to American consumers.
That’s an escalation on Joe Biden’s plan, which includes drug importation from those cheaper markets as well as allowing Medicare to negotiate prices — something that virtually all Dems agree on now.
Trump, meanwhile, has everyone guessing about what he means by a “most favored nation” clause, but he’s heaped just about every kind of abuse possible on drug companies and the prices they charge in the US — relative to the rest of the developed world. Trump also has focused on importing single-payer drug prices to force the WAC down, and will likely make his anti-Big Pharma campaign a big part of the reelection strategy, even though the bulk of Republican lawmakers in Congress may quietly oppose any such move.
If the Democrats win, they would be hard put to overcome the kind of opposition the Republicans would put up to a campaign promise like Harris’s. The real threat lies in Trump’s ability to bypass the Republicans in Congress and work a deal with the Democrats — even though they’re at each other’s throats right now.
Joe Biden taking questions at the Des Moines Register Iowa Presidential Candidate Forum on July 15, 2019 [via Getty]
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Whatever happens, biopharma will find itself pilloried at every campaign stop as the candidates pitch in with a popular and entirely bipartisan populist theme, shriveling the industry’s rep at a time drug hunters are enjoying unprecedented success in gaining substantial financial backing for research.
So far, political toxicity has failed to create much of a headwind on that score. But there’s a long way to go before the votes are cast in the 2020 election. And right now the theme in Washington political circles is centered on political one-upmanship — finding new ways to appear to be the toughest on pharma, regardless of how that plays with small biotechs.
For now, though, drug pricing power in the US remains entirely in the hands of the industry. And what are they going to do about it?