Drug industry on the brink of rare defeat

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The powerful pharmaceutical industry is on the brink of a rare defeat in Congress as Democrats say they have the votes to pass legislation targeting high drug costs.

After securing the backing of Senator Kyrsten Sinema (D-Ariz.) late Thursday, Senate Democrats appear poised to pass sweeping legislation that, in addition to a host of climate and tax measures, would allow Medicare to negotiate the cost of some prescription drugs for the first time ever.

Democrats have spent decades trying to get Medicare to negotiate directly with drug companies as a way to cut costs, starting with President Clinton’s ambitious health reform plan in 1993.

While relatively modest, the negotiating clause still represents a big win for drug pricing proponents, and could give Democrats a boost ahead of the midterm elections.

The idea is widely supported by voters, but the industry has long fought against any attempt to impose what they see as price controls, even amid growing bipartisan anger at high drug costs.

The legislation would allow negotiations for up to 10 of the most expensive drugs from 2026, with more in later years. It is expected to save the federal government more than $100 billion.

Another provision would limit the out-of-pocket cost for Medicare’s drug benefit to $2,000, saving seniors thousands of dollars. The legislation also aims to prevent companies from undergoing massive price hikes by imposing discounts on manufacturers who raise prices faster than inflation.

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According to the Kaiser Family Foundation, from 2019 to 2020, the price of half of all medications covered by Medicare exceeded inflation.

If the legislation is passed, “this will be a turning point. It’s going to change the trajectory of drug prices and drug pricing policies in the country,” said David Mitchell, chairman and founder of the Patients for Affordable Medicines advocacy group.

The legislation could be passed by the Senate as early as this weekend, assuming the Senate MP says drug pricing provisions could be incorporated into budget-alignment rules, giving Democrats the 60-vote legislature filibuster. bypass.

According to a recent Morning Consult-Politico poll, the prescription drug plan includes the most popular provisions in the reconciliation package. About three out of four respondents expressed support for the drug pricing measures.

But the pharmaceutical industry is on track to break lobbying records in its effort to oppose the legislation. According to Open Secrets, the industry spent $187 million in the first half of 2022 alone.

The industry’s largest lobbying group, the Pharmaceutical Research and Manufacturers of America (PhRMA), sent a letter to every congressman on Thursday urging them to vote against the legislation.

The letter largely echoed the industry group’s longstanding argument that the legislation would lead to government price controls and fewer drugs available to Americans.

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“This bill will not provide relief to families struggling with inflation or help the average American patient pay for their medications. It will be remembered as a historic mistake that devastated patients desperate for new cures,” PhRMA president and chief executive officer Stephen Ubl wrote in the letter, which was also signed by the group’s 31 board members.

At a recent briefing, Ubl said the group is assessing its options and indicated that even if the legislation is passed, the industry will not back down.

“We are not going to take any option off the table. We will examine all legislative, regulatory and legal efforts to ensure that patients continue to have access to medicines and that our companies have the ability to develop them,” Ubl said.

In recent years, Congress has tried to rein in drug prices without negotiating Medicare. In 2019, Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) a bipartisan drug pricing law.

As with the reconciliation provisions, it would have included a cap on out-of-pocket drug costs for seniors in Medicare, and would have capped Medicare drug price increases at the rate of inflation. But the bill was never put to a vote.

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Congress has also looked to stop what lawmakers decry as anticompetitive practices in the industry, such as raising prices in line with competitors or manipulating patent laws to extend market exclusivity.

But even modest legislation has been opposed by pharmaceutical companies.

Rachel Sachs, a law professor at Washington University in St. Louis, said she didn’t think there would be such a strong desire for regulation if drug companies hadn’t fought every effort.

Sachs said “the industry’s failure to curb its worst impulses” is to blame.

“We are now in a situation that is not sustainable for patients or payers and that is because of their own actions,” Sachs said.

Mitchell said that if the legislation is passed, it would break the invincibility of the pharmaceutical lobby.

“I really think this struggle was for power, and the drug companies have been fighting to maintain their power to dictate prices,” Mitchell said. “The bite from the pharmaceuticals of this legislation is not that great. It makes sense, but it’s not that big. But the idea that we’re actually curbing that industry’s power to dictate this to the American people is a really big deal.”

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