Pharma unleashes lobbying power to fight surprising—and costly—changes to Medicare Part D

Pharma's lobbyists are reportedly scrambling to reverse a provision in the recent budget deal that hurts the industry. (Pixabay)

Pharma only recently suffered in Congress' shutdown-averting spending deal, which put the industry on the hook for bigger discounts in the Medicare Part D coverage gap, but its advocates in Washington are acting fast to try to reverse the damage, according to The Hill. 

The drug industry has deployed lobbyists to push back against a provision in the spending bill that bumps up pharma's financial responsibility in the Part D coverage gap to 70% from 50%, the publication reports, citing lobbyist sources. 

The donut hole gap hits after patients reach $3,750 in drug spending for the year and extends until their total spending reaches about $8,400, or $5,000 out-of-pocket for patients. Under the new deal,, branded drugmakers would be responsible for 70% discounts to help bridge that gap, up from a 50% discount level now.

Insurer responsibility in the gap dropped to 5%, from 25%, according to consulting firm Avalere Health. 

The Part D changes caught the drug industry off guard, according to multiple reports, and PhRMA president Stephen Ubl reacted in a statement that it's a "massive bailout for insurance companies." 

Now, pharma lobbyists are pushing lawmakers to repeal the change or at least scale it back, The Hill reports, shooting for a discount rate of 60% or lower. A PhRMA spokesperson didn't immediately respond to a request for comment. 

On Thursday, a spokesperson for America's Health Insurance Plans hit back at the notion that the deal is a "bailout" and called pharma's arguments "ridiculous."

AHIP's senior vice president of communications Kristine Grow told FiercePharma that the drug industry is trying to make the coverage gap changes an "industry versus industry" issue. But with the budget deal, the "true benefit goes to the consumer and taxpayer." The changes will lower premiums and drug expenses, AHIP says.

RELATED: Under fire for pricing and more, PhRMA boosts lobbying spend 30% in 2017  

Weighing in on the changes, Bernstein analyst Ronny Gal wrote on Monday that the increase in pharma's responsibility would likely hit diabetes and COPD drugmakers more than it would for those in cancer and rare diseases. And the changes follow some tough years for diabetes and COPD drugmakers as payers have increasingly pitted them against each other for bigger discounts, resulting in thousands of layoffs.

Even still, Avalere concluded last week that the Part D changes "could have a multibillion-dollar impact on some large" drug companies going forward.

Attention to drug pricing has grown in Washington, D.C., and around the country in recent years, and last year, PhRMA boosted its lobbying spend by 30% to counter some proposals, including those that could have limited the industry's pricing power. According to disclosures, the group's lobbyists worked on issues including Bayh-Dole march-in rights, importation, Medicare price negotiations and more.

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