Democrats rolled out their new economic agenda Monday, calling it a “Better Deal.” For consumers, that might be true. For the pharma industry, not so much.
Among proposals Sen. Chuck Schumer and Rep. Nancy Pelosi say will foster wage growth and cut everyday expenses for average Americans are a couple of direct stabs at drug prices. Neither of them is entirely new: Congressional Democrats would push for stepped-up negotiating powers for Medicare and legal measures to fight big price hikes on older drugs.
But with pricing heat that intensifies with every new scandal, public sentiment is behind government action to bring down drug prices. In fact, 92% of Americans back Medicare price negotiation, according to an April survey by the Kaiser Family Foundation, and 86% support requiring pharma companies to release information on their pricing decisions.
That sentiment is strong enough, apparently, to prompt Democrats to put drug prices at the top of their list. According to CNN, the issue is one of three up for immediate action.
“Right now, there is nothing to stop vulture capitalists from egregiously raising the price of lifesaving drugs without justification,” Schumer said in a New York Times op-ed published Monday morning in advance of the plan’s unveiling.
“We’re going to fight for rules to stop prescription drug price gouging and demand that drug companies justify price increases to the public,” said Schumer, who’s Senate minority leader. “And we’re going to push for empowering Medicare to negotiate lower drug prices for older Americans.”
And then there are the broader moves. First, greater scrutiny for megamergers, which could put pharma M&A at risk as the industry anticipates a deal-fueling tax holiday on repatriating overseas cash.
Second, single-payer healthcare is “on the table,” Schumer says. Needless to say, that sort of soup-to-nuts overhaul of the U.S. healthcare system would throw pharma’s U.S. business model into disarray. Other options Schumer mentioned are options to buy into Medicare and Medicaid, which could put government programs in charge of a larger share of U.S. drug spending.
The Democrats’ suggestions aren’t without supporters. President Trump himself backed Medicare price negotiation during the campaign and since, though he has also advanced more industry-friendly measures. Senators Susan Collins (R-Maine) and Claire McCaskill (D-Mo.) have introduced the Increasing Competition in Pharmaceuticals Act to create incentives for quicker generics development, and FDA Commissioner Scott Gottlieb rolled out his own proposals for FDA rule tweaks to speed review of copycat medications that would compete with single-source generics.
McCaskill’s language has been similar to Schumer’s in his Monday op-ed; he referred to “vulture capitalists” hiking prices and McCaskill said earlier this year said some companies used a “hedge fund model” dependent on price hikes. The Senate Special Committee on Aging, chaired by Collins with McCaskill as ranking member, said much the same in a report of their drug pricing investigations.
In a release announcing that report, McCaskill said such price hikes are “predatory, and immoral for the patients and taxpayers who ultimately foot the bill—especially for generic drugs that can be made for pennies per dose. We’ve got to find ways to increase competition for medicines and ensure that patients and their families aren’t being gouged.”
Just a month ago, Gottlieb took steps to amp up development of competitive generic meds. The agency published a 10-page list of off-patent drugs with no competition. For many of them, the agency said it could immediately accept an application for generic approval "without prior discussion."