Budget proposal to allow Medicare to negotiate prices should 'enrage' seniors, PhRMA says

Industry lobbying association PhRMA responded with ire to the sweeping drug pricing reforms Congress is considering and President Joe Biden’s executive order last week, which encourages biosimilar and generic competition and Medicare to negotiate drug costs. The group blasted the initiatives as “an attempt to upend Medicare to help pay for Tesla tax credits and other government programs at seniors’ expense.”

“The budget should enrage every senior who relies on Medicare for their life-saving medicines,” wrote Debra DeShong, PhRMA’s executive VP of public affairs. “This plan puts in motion a system that will allow government bureaucrats to tell seniors which medicines they can have while repealing a policy that would immediately lower what they pay at the pharmacy counter.”

Yet, as a group of 15 Democrats who this week are urging Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Charles Schumer (D-N.Y.) to allow Medicare to negotiate prices wrote, “Empowering Medicare in this way and making these negotiated prices available to the private sector will bring down the coast of prescription drugs.”

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Biden’s initiative renews his call to allow Medicare to negotiate drug prices. The stance was a staple of his campaign and he reiterated his support for the measure after he was elected. But the president’s American Families and America Jobs plans did little to address drug pricing reforms, leaving the matter in the hands of Congress.

The group of 15 Democrats calling for action wrote “With public support of Medicare price negotiation of prescription drugs at nearly 90%, it is time to take action.” The group is led by Rep. Susan Wild (D-Pa.) and all are up for re-election in 2022. 

According to the letter sent by the 15 Democrats, the Congressional Budget Office claims that Pelosi’s H.R. 3, The Lower Drug Costs Now Act, would save approximately $456 billion over a decade.

Even among Democrats, though, there is some debate about how far drug pricing reforms should go. Senate Democrats led by Finance Committee Chairman Ron Wyden (D-Ore.) are countering with a narrower proposal that would still have some element of price negotiation, he told reporters this week.

Democrats opposed to the sweeping reforms say that they would damage the ability of drug companies to develop new drugs. In her statement, DeShong called the reforms “extreme.”

On the other hand, House Oversight Committee Chairwoman Carolyn Maloney, who is not among the 15 battleground-district Democrats urging the reform, told reporters Thursday, “Industry documents show how pharmaceutical companies exploit the U.S in part because the law won’t allow Medicare to negotiate drug prices. These companies are attempting to mislead the public by saying that any price reforms will hurt innovation. This simply is not true.”

RELATED: Biden’s call to action on drug pricing draws applause, but don’t expect reform from a deadlocked Congress

Biden’s executive order last week directs the Department of Health and Human Services to lay out a strategy to take on “price gouging.” It also instructs the Federal Trade Commission to examine anticompetitive “pay for delay” strategies used by pharmaceutical companies to stave off biosimilar and generic competition.