[Updated Aug. 13]
For decades, whenever Congress considered regulatory action, the pharmaceutical industry Shout out bloody murder that threatens its profits. But that hyperbole has reached new heights in recent weeks as the Senate begins to negotiate modest drug pricing in the Reducing Inflation Act.
The bill “could propel us back to the dark ages of biomedical research light-years away,” Dr. Michelle McMurry-Heath, president of the Biotechnology Innovation Group, said last month. Venture capitalists and other opponents of the bill said it “will immediately cease private funding for drug discovery and development.” PhRMA called the bill’s Aug. 7 passage in the Senate a “tragic loss for patients.” He threatened in an interview with Politico that politicians would suffer if they voted for the measure, adding that “few associations have all the tools of modern political propaganda like PhRMA.”
According to advocacy group Patient Monitoring, PhRMA and closely related groups have spent at least $57 million on TV, cable, radio and social media advertising over the past 12 months (since July $19 million) to negotiate against prices for affordable drugs. This year, PhRMA spent more than $100 million to unleash a large team of 1,500 lobbyists on Capitol Hill.
The final bill is weaker than the earlier version, which expanded negotiations to more drugs and included private insurance plans. The bill would only allow Medicare to negotiate prices starting in 2026, initially for just 10 drugs.
The Congressional Budget would save the Centers for Medicare and Medicaid Services about $102 billion over a decade, the office estimates. In 2021 alone, top U.S. pharmaceutical companies will record tens of billions of dollars in revenue: Johnson & Johnson ($94 billion), Pfizer ($81 billion), AbbVie ($56 billion), Merck ($49 billion) and Bristol-Myers Squibb ($46 billion).
The act authorizes CMS to spend hundreds of millions of dollars to create a drug negotiation program, launching a cost-benefit assessment system similar to that used in Europe to guide price negotiations with industry. On average, Americans pay four times as much, and sometimes more, for the same drugs than many Europeans.
The bill does not affect the list price companies charge for new drugs, with the median price increasing from $2,115 in 2008 to a staggering $180,007 in 2021, according to recent research.
Supporters of the bill say PhRMA’s gloomy predictions are overblown and history is upon them.
“This is complete nonsense and a scare tactic,” Andy Slavett told KHN. As a leading federal health official in 2016, he was part of an attempt to change the Medicare plan, which pays doctors a flat 6% each time the drug costs, thereby encouraging them to use the most expensive infusion drugs. Slavette said PhRMA funded much of the Loud movement that thwarted his efforts.
Another scare tactic: The pharmaceutical industry warns that any price negotiation will stifle innovation. Aaron Kesselheim, Ph.D., director of the regulatory, therapeutic and legal program at Brigham and Women’s Hospital in Boston, said such warnings “constituted the response of pharmaceutical companies in virtually every situation since 1906,” the first The year the drug regulatory agency was established. However, regulatory changes rarely stifle investment in new medicines, he said.
For example, the pharmaceutical industry lamented a bill sponsored by Rep. Henry Waxman (D-Calif) to promote generic drugs.) 1984. However, Kesselheim noted that while 50 percent of prescription drugs were generic in 2000—up from 15 percent in 1980—approvals for important new drugs also surged during this period. The threat of losing market share for generics could prompt manufacturers to invest in innovation, he said.
In 1993, Thomas Copmann, then vice president of PhRMA, accused President Bill Clinton’s vaccine program for children to fund the vaccination of any child whose parents could not afford it, “only to stifle innovation because the government The market will be controlled.” Over the next 16 years, childhood vaccination rates climbed—for example, the polio vaccine rose from 72 percent to around 93 percent. During the same period, new vaccines such as hepatitis A and B, pneumonia, chickenpox, human papilloma virus, and rotavirus were also included in the agenda. history. In the early 1900s, the US Patent Institute warned newspapers that their advertising revenue would dry up if the industry had to list its ingredients (mostly alcohol). The law was passed in 1906, but newspapers — and the pharmaceutical industry — survived.
At times, blackmail by the industry was a negotiating tactic that led to concessions from Congress and the federal government
In the 1990s, when discussions began to demand pharmaceutical When companies pay user fees to have their medicines reviewed, the industry describes the fees as “a tax on innovation.” Ultimately, if the FDA sets a deadline for the review, it agrees to pay. The consequent increase in FDA staffing levels brought an increase in drug approvals over the ensuing five years.
However, “killing innovation” is still a common metaphor. Drug imports, efforts to limit “delayed payment” agreements between branded and generic drug companies, investigations into price gouging by drugmakers — all “stifled innovation,” according to conservatives and pharma executives. In 2009, former House Speaker Newt Gingrich said the same about the Affordable Care Act. A golden decade for new drugs followed, with the number of FDA approvals increasing from 21 in 2010 to 50 in 2021.
Critics of the current bill argue that historical and economic research shows drug investment will lag the market shrinking, they say, if price controls cause companies to make money off of their blockbuster drugs For less money, this happens. Craig Garthwaite, director of health care at Northwestern University’s Kellogg School of Management, said biotech companies rarely get rich with drugs, and they will shift some of their portfolios from pharma to other areas. “There’s a fair argument for how much,” he said.
He noted that after Medicare’s drug program was created in 2003 — and the pharmaceutical industry initially opposed it — increased federal spending on drugs prompted drug companies to spend more on drugs aimed at older adults funds. “Once you invest in a clinical trial, the money never comes back unless it’s revenue from selling the product,” he said.
The moribund antibiotic industry is a testament to a shrinking market — hospitals and doctors deliberately restrict the use of new drugs to reduce microbial resistance, Garthwaite said — leading to lower investment. Improve results, but make a lot of cash in the current uncontrolled price system.
Vincent Rajkumar, an oncologist at the Mayo Clinic. He is the lead investigator of two large trials testing Ninlaro (ixazomib), a multiple myeloma pill very similar to the injectable drug Velcade (bortezomib). While more convenient, Ninlaro isn’t more effective, and it costs about eight times as much as regular bortezomib, he said. A newer multiple myeloma drug, Xpovio (selinexor), keeps patients progression-free for about four months; it costs $22,000 a month.
Most new cancer drugs only extend life, said Rajkumar, who helped organize a 2015 letter signed by 118 oncologists calling for a Medicare bargain . If forced to negotiate, “maybe these companies will spend their R&D dollars on more meaningful things,” he said.
In other high-income countries, drug price negotiations are the norm. “Right now, we’re weird people,” Rajkumar said. “Are we really that smart, are we right and everyone else is wrong? Do we really care more about our public than everyone else?”
American Cancer Society and Large patient groups such as the American Heart Association, with strong support from the pharmaceutical industry, have been on the sidelines
Some other patient groups worry that if prices drop, the industry will lose access to drugs for smaller populations interest, opposed the bill — and successfully won an exception that prevented Medicare from negotiating prices for rare-disease drugs.
Multiple myeloma patient David Mitchell, who founded Affordable Medicines for Patients in 2017, said he was sure the bill would win. Don’t stop innovation – his life may depend on it. The 68-year-old said he was on a four-drug regimen, but “cancer is very smart and has found ways to bypass the drugs.”
“The idea of taking a small bite It’s nonsense that pharma revenue will stop them from creating new drugs,” he said.
[Correction: This article was published in 2022 Updated 8/13/13 to remove reference to the American Diabetes Association’s position on the Drug Act. American Diabetes Association supports Medicare drug price negotiations. ]
