FiercePharmaPolitics—Lawmakers battle over pricing restrictions in coronavirus spending bill

US Capitol at night
As the U.S. COVID-19 outbreak gains steam, lawmakers authorized $8.3 billion in emergency spending to help control the outbreak. (Wikimedia Commons)

Welcome to the FiercePharma political roundup, where each Monday we’ll highlight developments in Washington, D.C., and elsewhere that could affect how drugmakers operate. 

Amid the frantic effort by lawmakers to authorize emergency spending for the U.S. coronavirus response, the pharma industry fought against provisions related to pricing of potential drugs and vaccines, Politico reports

Democrats tried to include certain pricing stipulations, including an ability for the government to remove intellectual property protections for drugs that are priced unfairly, but Republicans pushed back, according to the publication. 

The bill—which authorizes billions in government research spending plus $300 million for purchasing eventual treatment and prevention options—does include language on “fair and reasonable” pricing for those government purchases. President Donald Trump signed the bill on Friday.

Another pharmaceutical pricing report, this time from Sanofi, shone a light on the growing rebates drugmakers are paying. Sanofi pricing squeeze got worse in 2019, the report says, while assigning at least some insulin affordability blame to payers. 

Since 2012, net prices for Sanofi’s insulin have declined by 41%, but out-of-pocket costs for patients with commercial insurance and Medicare grew by 62% over the same period. Since net prices have gone down, patients should be paying less, the company argued.  

But "that is not always the case, as benefit designs may result in patient out-of-pocket costs exceeding plans’ net cost,” the report said. 

RELATED: Net prices for insulins keep dropping, but patients are paying more, Sanofi says 

Meanwhile, as Democrats move through the nomination process and look ahead to elections this fall, the Journal of the American Medical Association published several deep dives into drug pricing, R&D costs, profitability and more. They set the stage for a debate that’s “likely to intensify in the coming months,” Merck CEO Ken Frazier wrote in an accompanying editorial. 

In a profitability study, the authors compared profits for 35 large pharmaceutical companies with those for 357 non-pharmaceutical companies and concluded that drugmakers generated “significantly greater” profits as a share of revenue. From 2000 to 2018, the pharma group’s net income margin was 13.8% compared with 7.7% for the other companies. 

RELATED: Merck CEO Frazier finds fault in new studies suggesting pharma profits are too high 

On R&D costs, the group estimated that the cost of developing a drug between 2009 and 2018 was $985 million, lower than other figures often cited by the industry. On pricing, the team found that list prices grew 159% from 2007 to 2018, and that net prices jumped 60% over the same period. 

The studies were part of a special JAMA issue on drug prices, and Merck CEO Ken Frazier penned an editorial outlining some problems he saw with the work. Patients are having trouble affording their insurance co-pays and other expenses, and skip doses or don’t fill their prescriptions, the CEO added. In all, Frazier believes the debate over healthcare costs will gain steam in the next few months.