Big Pharma, with its army of 1,500 registered lobbyists and endless well of resources, rarely ever loses on Capitol Hill.
So the powerful industry didn’t take it well when the U.S. Senate — a chamber awash with pharma cash — passed legislation Sunday that would require Medicare to negotiate the prices of a small number of prescription drugs. The bill, known as the Inflation Reduction Act, also proposes a $2,000 cap on Medicare Part D enrollees’ annual out-of-pocket drug spending.
Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America — the drug industry’s leading trade group — claimed late Sunday that the legislation represents a “tragic loss for patients,” decrying the bill’s highly modest price-negotiation requirements as an unconscionable government attempt to exert “more control over the healthcare of American patients.”
“We urge the House to do what’s needed to stop this dangerous bill and deliver the kind of meaningful patient-centered reforms the American people are counting on,” added Ubl, who recently threatened political consequences for senators who support the compromise measure.
Ubl’s statement Sunday was in keeping with the pharmaceutical industry’s outraged response to the Inflation Reduction Act, legislation that drug companies have fought with torrents of lobbying money and ads packed with disinformation.
The industry’s fearmongering about the bill’s supposedly dire implications often verged on hysteria. The Biotechnology Innovation Organization, the world’s largest biotech lobbying group, declared last month that the legislation’s passage would hurl the U.S. “back into the dark ages of biomedical research.”
For patient advocates, the pharmaceutical industry’s aggressive efforts to tank the reconciliation represent a signal that it’s worth fighting for, even if it doesn’t go nearly as far as progressive lawmakers and grassroots campaigners had hoped.
The bill was further weakened just a day ahead of the Senate vote when Republicans — enabled by the upper chamber’s unelected parliamentarian — forced the removal of a provision that would have instituted a $35-per-month insulin copay cap for patients with private insurance.
The parliamentarian also deemed out of bounds a proposal aimed at requiring pharmaceutical companies that raised drug prices at a faster rate than inflation to pay out rebates to the privately insured.
Despite those negative last-minute changes, campaigners applauded the Senate Democratic caucus for approving the bill.
“We are now one, very important, step closer to a historic victory for consumers and a historic defeat for Big Pharma’s monopoly control over prescription drug prices,” said Margarida Jorge, head of the Lower Drug Prices Now campaign. “For years, Washington has talked about lowering the price of prescription drugs… Senate Democrats finally delivered on that promise.”
The House is expected to take up and pass the bill later this week, clearing the way for Medicare to directly negotiate the prices of a subset of expensive medicines directly with pharmaceutical corporations — a reform that the drug industry has been fighting off for decades.
This year alone, drug companies have raised prices more than 1,180 times, a striking display of the industry’s unchecked power to set prices as it pleases while patients struggle to afford lifesaving treatments.
As The American Prospect’s David Dayen summarized, “Annual negotiations start with only ten drugs chosen by the Department of Health and Human Services in 2026, rising to 15 drugs per year by 2027 and 20 by 2029 and all subsequent years.”
“While negotiations technically start in 2023,” Dayen added, “the prices aren’t applicable until three years later.”
Because a relatively small number of medications make up a significant portion of Medicare’s overall prescription drug spending, advocates and analysts say the bill could have a major impact for many seniors, people with disabilities, and others impacted by soaring costs.
“This legislation — decades in the making — will, for the first time, authorize Medicare to negotiate prices directly for some of the costliest prescription medicines; institute a cap on out-of-pocket drug costs for Medicare beneficiaries; and limit annual price increases in Medicare to stop price gouging by drug corporations,” said David Mitchell, founder of Patients for Affordable Drugs Now.
“Make no mistake, this legislation is game changing,” argued Mitchell, a patient with incurable blood cancer whose medications come with an annual list price of over $900,000. “It alters the trajectory of drug pricing and policy in the United States. It finally begins to break the power of multinational drug corporations to dictate prices of brand name drugs to the American people.”
“It marks a shift to reforming the system,” Mitchell added, “in order to make it work for the people it is supposed to serve — rather than the people who profit from it.”