The National Association of Manufacturers (NAM) is spending some serious bucks to fight a sweeping proposal in the Senate that aims to rein in drug pricing and spending in the United States.
In a nutshell, the Senate reconciliation package under consideration would allow Medicare to negotiate lower prices for some drugs. The legislation is unsurprisingly proving controversial within the life sciences industry.
Batting for biopharma today is the NAM, which represents pharma manufacturers and many other industries. The group has released a 30-second ad that is clear-cut on its position: “Price controls are a hidden tax on manufacturers,” the commercial’s narrator says, which “harms innovation [and] competitiveness.”
“Politicians shouldn’t force price controls on Americans,” the increasingly serious-sounding narrator says, while also warning that that the bill could stop lifesaving medicines from coming to market.
The Congressional Budget Office recently said the impact of allowing price negotiations “will prevent around 10 medicines arriving to market over the next 30 years” but could save the federal budget $288 billion by 2031.
The NAM said this ad has a “six-figure” budget, though it doesn’t share the exact figure nor a breakdown of how that money is being spent.
“At a time when manufacturers are already facing extraordinary economic pressures, the Senate should be focused on bolstering our industry’s competitiveness, not undermining it," NAM President and CEO Jay Timmons said in a release. "We are calling on senators to vote ‘no’ on reconciliation and stand with manufacturers and the hardworking Americans who are integral to battling this pandemic and discovering future cures.”
Despite the industry pressure, the Democrats think they may have a vote winner on their hands. “Let me say this: We are excited about doing prescription drugs,” Senate Majority Leader Charles Schumer, D-New York, said last week in a press conference.
“This is something we’ve waited for a very long time and is going to be a major, major accomplishment to help people, bring down inflation.”
Should the bill pass, Medicare would be authorized to negotiate the price of certain drugs with no competition as of 2023, analysts at European firm Oddo BHF said in a note to clients. There would then be 10 medicines eligible for renegotiation in 2026 followed by 15 in 2027 and 2028, and 20 as of 2029.
Among their coverage area, Oddo’s analysts note that diabetes specialist Novo Nordisk and Swiss cancer major Roche “are the two players that are the most dependent on Medicare” and therefore could be two of the biggest to lose out from the plans.
But actually passing the package in the Senate will not be easy, as the Democrats have the thinnest of margins. The bill will almost certainly have no Republican backing.
The Democrats may have public opinion on their side: Last October, a Kaiser Family Foundation poll found 83% of the public supports allowing Medicare to negotiate lower drug prices, with 71% Republicans also backing the idea.
The bill could get a Senate vote in the next two weeks.