FiercePharmaPolitics—Pelosi's plan a 'nuclear winter' for pharma, analyst says

House Speaker Nancy Pelosi's drug pricing plan calls for Medicare pricing negotiations and much more. (Pixabay)

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. 

While Thanksgiving week didn’t feature quite the same level of fireworks as a typical week in Washington, there were still some drug pricing developments to track. 

For one, Bernstein analyst Ronny Gal took a chance to outline his team’s thoughts on pricing proposals circulating in Washington. He said the Senate Finance Committee’s bill is “positive” for the industry, while the Trump administration’s international price index (IPI) model is a “mild negative.” 

Worst for pharma, House Speaker Nancy Pelosi’s plan is a “nuclear winter,” Gal wrote.  

The analyst figured that the Senate Finance Committee bill, which calls for changes to Medicare Part D and Part B and more transparency for pharma middlemen, would have a “negligible” effect on drugmakers, hitting about 2% of their existing sales.  

Still, that’d be a “positive outcome” based on how intense the rhetoric is in Washington. The IPI would affect about 3% of sales and be “very uneven” on how it hurts various companies, the analyst wrote. 

RELATED: Trump crosses party lines to back Medicare drug-price negotiation 

Pelosi’s plan, meanwhile, would affect the entire industry and bring a “fundamental change of business model” for pharma companies. Her plan calls for Medicare price negotiations, an international pricing index, potential fines for drugmakers and more. Trump originally said it’s “great to see” the proposal, but the White House-backed away more recently and signaled more support for the Senate effort. 

Trump said he supported Medicare price negotiations during the 2016 campaign, and now that Pelosi’s plan is advancing, he’s putting support elsewhere. Democrats believe they can highlight that change of position on the 2020 campaign trail, The Hill reports

Meanwhile, while pharma companies often claim drug pricing is based on R&D expenses, that’s not been the case in multiple sclerosis, researchers wrote in the journal Neurology. Instead, pricing was determined by the price of competition, “revenue maximization and corporate growth,” and the complicated supply chain, among other factors.