This fall’s national elections, presidential and otherwise, could affect the pharma industry’s fate in the coming years. Democratic presumptive nominee Joe Biden has some aggressive proposals on drug pricing, and while analysts see some as possible, others are more unlikely, they say.
Biden’s pricing platform calls for Medicare Part D negotiations, a restriction to certain drug prices at launch, eliminating tax deductions for DTC ads, reimportation and more, Cowen analysts Rick Weissenstein and Eric Assaraf wrote in a note to clients.
If Biden wins the White House in November, the analysts believe his administration would primarily focus on insurance markets. Still, some “drug pricing measures are possible and there will almost certainly be lots of noise,” the analysts wrote. They don’t believe the launch pricing restriction, which the drug lobby “hates the most" among the proposals, would become law.
As always, action through Congress would be uncertain and depend on election results, the analysts wrote. But a potential Biden White House would have one channel for changes without Congress, the Center for Medicare and Medicaid Innovation (CMMI). Any changes could face court challenges, but the CMMI could test new drug pricing programs for government payers, such as an international pricing index or price-negotiating powers.
Meanwhile, if President Donald Trump and Republicans retain the White House and Senate, “passing any drug pricing legislation becomes less certain,” SVB Leerink analyst Geoffrey Porges wrote in a separate note to clients.
Porges’ team recently spoke with two healthcare policy specialists who said that if Democrats capture a Senate majority, they expect “significant changes” to Medicare Part D. Those changes would be “at a minimum equivalent” to the drug pricing bill from Sens. Charles Grassley and Ron Wyden, which calls for drug price hike limits and an out-of-pocket cap for patients.
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Looking forward, the experts “suggested that healthcare is still likely to be a major element of the campaign, having been temporarily subsumed by economic, social, public health and security issues,” Porges wrote. Insurance coverage seems to be the top priority, though, the analyst added.
While the pharma industry has enjoyed a reputation boost amid its work on COVID-19, that doesn’t change the industry's long-term political standing, Porges added. Depending on how the elections play out, the policy specialist call “reinforced our view that drug pricing and reimbursement reform is likely to be postponed to 2021 or later,” Porges wrote.
For his part, Sen. Grassley is pushing for action before then. He wants his pricing bill to be incorporated into the next pandemic relief bill, the New York Times reported this weekend. Senate Majority Leader Mitch McConnell isn’t in favor, NYT reports, so it remains uncertain whether a political consensus will be reached on the issue.