Faced with price controls, the pharmaceutical industry is mounting the pressure on Congress
The final bill is weaker than previous versions, which would have extended negotiations to more drugs and included private insurance plans. The bill would allow Medicare to negotiate prices starting in 2026, initially for just 10 drugs.
Proponents of the bill say the PhRMA’s dark prophecies are overblown and that history is on their side.
“It’s complete bulls**t and a scare tactic,” Andy Slavitt told KHN. As a top federal health official in 2016, he tried to change part of a Medicare program that pays doctors a flat 6% of the cost of a drug each time they administer it, creating an incentive to use the most expensive infusion drugs. PhRMA funded most of the vociferous campaign that defeated his efforts, says Slavitt.xf
Another scare tactic: the pharmaceutical industry warns that any price negotiation will kill innovation. Such warnings “have been the pharmaceutical response in literally every instance since 1906,” the year the first drug regulatory agency was established, said Dr. Aaron Kesselheim, who leads the program on regulation, therapeutics and law at Brigham and Women’s Hospital in Boston. And yet, he said, regulatory changes rarely stifle investment in new drugs.
For example, the pharmaceutical industry lamented a bill to boost generic drugs sponsored by Rep. Henry Waxman (D-California) in 1984. Yet while 50 percent of prescribed drugs were generics in 2000 — up from 15 % in 1980 – Approvals of important new drugs also skyrocketed during the period, Kesselheim noted. The threat of losing market share to generics, he said, may have prompted manufacturers to invest in innovation.
Pharmaceutical industry attacks on regulation have a rich and thriving history. In the early 1900s, the Proprietary Association of America warned newspapers that their advertising revenue would dry up if the industry had to list its ingredients (primarily alcohol). The law was passed in 1906, but newspapers – and the pharmaceutical industry – survived it.
Sometimes industry punches are a bargaining tactic, which has led to concessions from Congress and the federal government.
If Medicare negotiations cut profits from the biggest earners, investors in risky biotech companies, whose drugs rarely make fortunes, will shift some of their portfolios from pharmaceuticals to other sectors, said Craig Garthwaite, director of health care at Northwestern University’s Kellogg School of Management. “There’s a fair argument as to how much,” he said.
He noted that after the creation of Medicare’s drug program in 2003 – initially opposed by the pharmaceutical industry – an increase in federal drug spending prompted drug companies to spend more on drugs for seniors. . “Once you invest in clinical trials, that money never comes back unless it’s revenue for products sold,” he said.
Yet some experts say Medicare drug price negotiations could accelerate innovation if they drive companies away from drugs that modestly improve outcomes but can fetch huge sums of money under the current pricing system. not controlled.
In other high-income countries, drug price negotiations are the norm. “Right now we’re the odd man out,” Rajkumar said. “Are we really so smart that we are right and everyone is wrong? Do we really take care of our audience better than everyone else?
Major patient groups such as the American Cancer Society and the American Heart Association, all of which enjoy strong support from the pharmaceutical industry, remained on the sidelines of the debate over the wording of the bill on the negotiation of drug prices.
Some other patient groups, fearing the industry will lose interest in drugs for smaller populations if prices drop, opposed the bill — and succeeded in winning exceptions that would prevent Medicare from negotiating drug prices. drugs for rare diseases.
David Mitchell, a multiple myeloma patient who founded Patients for Affordable Drugs in 2017, said he was sure the bill would not discourage innovation – and his life may depend on it. The 68-year-old said he was on a four-drug regimen, but “the cancer is very smart and finds a way around the drugs”.
“The idea that taking a small bite out of pharma revenue is going to stop them from creating new drugs is bullshit,” he said.
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with policy analysis and polls, KHN is one of the three main operating programs of the KFF (Kaiser Family Foundation). KFF is an endowed non-profit organization providing information on health issues to the nation.
Correction: This article was updated on August 13 to remove a reference to the American Diabetes Association’s position on the drug bill.