Editor’s note: With the 2020 elections in the books and a new government in place, this will be the final edition of Fierce Pharma Politics. We’ll continue tracking drug pricing developments in Washington and beyond through our daily industry coverage.
Amid the COVID-19 pandemic, drug pricing talk has been mostly muted in Washington. But following the wins for Democrats in recent elections, Bernstein analyst Ronny Gal and his team see the issue gaining steam over the next few months.
Due to “deep public interest,” plus Congress’ growing familiarity with the subject and recent election results, Bernstein analysts figure drug pricing policy measures are “likely” in the Biden administration. But as the debate plays out, negotiations by lawmakers or administrative actions stand to affect just how much the pharma industry will feel the measures.
Legislative efforts in Congress will likely start from the Senate Finance Committee drug pricing bill, the analysts wrote, which proposes restructuring Medicare Part D and capping drug price increases to the rate of inflation. The bill would have a “relatively minor” effect on pharma revenues, and it could be seen as neutral because its aim to protect patients from high out-of-pocket costs. Further, the bill could bring “finality” on the issue of drug prices that could last a decade, they said. With that considered, it “could be seen as a positive.”
Alternatively, in another scenario, if the government moves to reduce drug prices to ranges proposed by cost watchdogs at the Institute for Clinical and Economic Review, the industry would see a “much deeper impact.” And if lawmakers propose restricting the industry’s power to price at launch, that’d bring big changes to U.S. pricing dynamics, as well.
In all, the analysts say drug pricing isn’t an issue “until it is.”
“Without some finality, it is only a matter of time until such legislation is introduced,” they wrote. “Our estimates based on the last round of proposal suggest a manageable impact on the pharmaceutical industry. However, worse scenarios will likely emerge as part of the debate.”
The comments echo predictions by other drug pricing experts who spoke with Fierce Pharma following the 2020 election results. The COVID-19 pandemic will be President Joe Biden’s “first, second and third” priority, as one expert put it, but several people said there’s a favorable landscape for pricing changes in D.C. in the months and years to come.