US move to negotiate drug prices a defeat for Big Pharma
Big Pharma spent more than any other industry to lobby Congress and federal agencies this year, a Reuters analysis shows, but still suffered a major defeat after failing to stop a bill that allows the government to negotiate prices on select drugs.
Despite the pharmaceutical industry's spending at least $142 million on lobbying efforts, the $430 billion Inflation Reduction Act to change climate, health and tax policies will become law. It cleared its largest hurdle last week with passage in the Senate, without any Republicans joining Democrats in voting for the bill, followed by passage by the US House of Representatives on Friday.
President Joe Biden will sign it into law next week.
The bill's imminent enactment represents a rare legislative defeat for the pharmaceutical industry and sets a precedent for curbing drug prices in the world's most lucrative market for medicines, according to congressional and industry officials.
"This is a major first step forward," Democratic Senator Patty Murray, chair of the Senate's health committee, told Reuters. "It is the first time we've been able to make this kind of step to lower prices on pharmaceuticals ... which will set the stage for us to do more."
Health policy experts say the bill reflects the pharma industry's weakening influence on the Democratic Party and that its main argument against price negotiation -- that it stifles innovation -- is no longer persuasive for the public.
A Kaiser Family Foundation poll in October found that 83 per cent of Americans, including 95 per cent of Democrats and 71 per cent of Republicans, want the federal Medicare health plan for seniors to negotiate prices, a provision of the bill.
"The pharma guys upped the ante in throwing everything but the kitchen sink against this," said Senator Ron Wyden, a Democrat who chairs the finance committee.
The industry's powerful trade association, Pharmaceutical Research and Manufacturers of America (PhRMA), urged senators in a public letter to reject the bill. Its president, Stephen Ubl, told Politico that lawmakers who vote for it would not "get a free pass."
"Few associations have all the tools of modern political advocacy at their disposal in the way that PhRMA does," he said.
A PhRMA spokesperson said the group would continue to work with all lawmakers. He did not address Ubl's comments about holding lawmakers accountable.
"We may not agree on every issue, but we believe engagement and dialogue is important to promoting a policy environment that supports innovation, a highly-skilled workforce and access to life-saving medicines for patients," said spokesperson Brian Newell in an email.
A Reuters analysis of lobbying and campaign contribution data from OpenSecrets shows that the pharmaceutical industry spent at least $142.6 million on lobbying Congress and federal agencies in the first half of 2022, more than any industry, and at least $16.1 million on campaign contributions during the current mid-term election cycle that started in January 2021.
Almost two-thirds of the money spent on lobbying, around $93 million, came from PhRMA and its member companies.
The pharma campaign argued that prescription drugs do not contribute to inflation, citing an average 2.5 per cent rise in drug prices in the past year compared with a 17 per cent rise in health insurance prices.
Critics say the figures combine high-priced brand name drugs with much lower-cost generics, masking the impact on patients' costs.