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Analysis: U.S. midterms dampen Big Pharma hopes for drug price policy change

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2022-11-18T19:22:46Z

The divided U.S. Congress after the November midterm elections undermines pharmaceutical companies who want to weaken a new law that allows the government to negotiate drug prices, Republican strategists, policy experts and pharmaceutical executives say.

Democratic President Joe Biden’s signature Inflation Reduction Act, which Democrats passed in August against pharmaceutical industry and Republicans opposition, allows the government’s Medicare health program for people aged 65 and older and people with disabilities to directly negotiate prices for some drugs starting in 2026.

The industry had been hoping a Republican-controlled Congress would change some provisions in the law and that the president could be convinced to signed off on them, eight strategists, experts and executives told Reuters.

Now, with Democrats in control of the Senate and Republicans running the House of Representatives starting in January, the pharmaceutical industry is regrouping for 2023 around a shorter provisions list they say are most problematic as well as turning to other priority areas, sources and experts say.

Drugmakers are launching new medicines at record-high prices this year, a Reuters analysis has found, highlighting their pricing power even after Congress moved to cut the $500 billion-plus annual bill for prescription drugs in the United States.

The law allows the government to choose 10 drugs to negotiate from among the 50 costliest drugs for Medicare.

Some experts say it is highly unlikely the Biden administration would change its signature law. Biden vowed on the campaign trail to oppose Republican attempts to weaken it.

The White House did not respond to a request for comment.

Even so, Republicans will “chip away” at the drug price negotiation provision and its implementation, said Joel White, founder and president of Horizon Government Affairs.

“There are things that I think Republicans are thinking could be changed in the law to make it less onerous,” said White, a Republican strategist and former congressional staffer who specializes in health policy.

That aligns with the industry’s approach.

Speaking on condition of anonymity, three pharmaceutical executives said they would lobby both Democrats and Republicans to extend the negotiation exemption period for conventional prescription drugs to 13 years from nine years following U.S. Food and Drug Administration approval. This would be in line with complex biologic drugs, which are made from living cells.

Also among their top asks is a reset, or at least extension, of the negotiation exemption period every time a company proves the drug works for an additional illness and is approved for it by regulators. They argue companies and shareholders will lose their financial incentive without such a change.

The industry believes the best approach for bipartisan support is to tie the extension request to their work on finding cancer treatments, even if it is an uphill battle. This would align with Biden’s “cancer moonshot” initiative to cut the cancer death rate in half in the next 25 years.

“We’re eager to work with lawmakers on both sides of the aisle to fix flaws in the law and to drive meaningful change that lowers patients’ out-of-pocket costs,” said Brian Newell, a spokesperson for Pharmaceutical Research and Manufacturers of America (PhRMA), the industry’s powerful trade association.

Biden is unlikely to weaken his signature domestic achievement, said Larry Levitt, Executive Vice President for Health Policy at the Kaiser Family Foundation.

“I can certainly imagine Republicans pushing for tweaks that would weaken drug pricing negotiation, but I have a tough time seeing President Biden going along with that,” said Levitt, a senior health official during the Clinton administration.

Even Republican support for the drug pricing provision is not guaranteed because it is popular with voters across the political spectrum, he said.

“All Republicans voted against drug price negotiation, but they have to tread carefully in any effort to weaken it.”

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U.S. President Joe Biden and first lady Jill Biden are flanked by U.S. Vice President Kamala Harris and her husband Doug Emhoff following an event to celebrate the enactment of the “Inflation Reduction Act of 2022,” which Biden signed into law in August, on the South Lawn at the White House in Washington, U.S., September 13, 2022. REUTERS/Kevin Lamarque/File Photo

Pharmaceutical tablets and capsules are arranged in the shape of a U.S. dollar sign on a table in this picture illustration taken in Ljubljana August 20, 2014. Picture taken August 20. REUTERS/Srdjan Zivulovic/File Photo
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