With midterm elections a day away, pharma watchers are keeping a close eye on the results, well aware that the industry has a lot at stake.
Drug pricing has become a central issue in the election, and just who wins and loses in the Congressional races will determine how the industry fares for years to come. One favorable outcome for drugmakers, which many experts predict, is that Democrats will flip the House of Representatives, while Republicans will retain control of the Senate.
Anything can happen in elections, of course. But that scenario would be a positive for healthcare companies because it “likely means gridlock,” Cowen Washington Research Group healthcare and pharma managing director Rick Weissenstein wrote in a note to investors.
Sure, the House would likely put out “a constant drumbeat of hearings and bad press,” Weissenstein wrote. “With subpoena power, it’s likely Democratic leaders will seek information about how much drug makers spend on R&D, marketing, sales and other things the manufacturers prefer not to disclose.”
But while the drug pricing hearings would make “good theater,” like big tobacco hearings in the 1990s, Weisseinstein believes they wouldn’t bring about tangible change to pharma pricing dynamics.
In an email to FiercePharma, Dave Fitzhenry, CEO of pharma consultant firm Trinity Partners, concurred with the analysis. A mixed Congress would likely bring a “stalemate on major policy changes, which would be viewed as a win for the pharmaceutical industry,” he said, adding that the industry “will continue to thrive,” and could even embrace some Trump administration pricing proposals after the election.
But if both the House and Senate flip, pharma needs to watch out. In that case, the Senate Finance Committee would likely be chaired by pharma critic Sen. Ron Wyden, D-Ore., Weissenstein wrote.
It’s “hard to overstate just how big a difference it would be from the current chairman Orrin Hatch, R-Utah, who is one of PhRMA’s biggest supporters in Congress,” the analyst wrote. Sen. Hatch is retiring.
In any case, drugmakers have reason to worry. Last month, the New York Times reported that drugmakers are preparing for the possibility of a worst-case-scenario of Democrats partnering with the Trump administration to lower prices. And two prominent Democrats told The Hill they plan to be aggressive on drug prices after the election.
Rep. Jan Schakowsky, D-Ill., told the publication that “out of the gate,” Democratic lawmakers want to “make a down payment on what we’re going to do about the costs of prescription drugs, and I would hope within the first 100 hours we would be able to put some constraints on Big Pharma.” Rep. Elijah Cumming, D-Md., added that he wants pharma executives to testify about drug prices.
The midterms come after considerable talk—and more recently, some action—on drug pricing during the first two years of the Trump administration. Late last month, the administration unveiled a plan to force lower U.S. prices in Medicare Part B. The president and HHS secretary Alex Azar released a drug pricing blueprint in May, aiming to boost negotiations and competition, plus provide incentives for lower list prices and reduce out of pocket costs.
At the FDA, regulators are approving more generic drugs than ever, and the HHS is pushing for drug prices in TV ads. The president also signed a bill to prohibit “gag clauses” that restrict pharmacists from talking about cheaper options with patients.