Drugmakers have built a unified wall of resistance to a growing drug pricing and transparency push in Maryland, with representatives from three major trade groups on Monday smacking down one proposal in the state.
If enacted, Maryland’s Senate Bill 437 (PDF) would require manufacturers of expensive medicines—those that cost more than $2,500 per year—to file a report disclosing their spending on R&D, manufacturing, marketing and advertising, among other costs. It’s not a popular idea with the drug industry, as PhRMA, BIO and the newly rebranded generics industry association, Association for Affordable Medicines (AAM), each presented critiques at a Monday hearing.
It's the latest front in a state-by-state legislative fight over pharma pricing, as lawmakers get a jump on Congress. Pharma is lobbying hard against New York Gov. Andrew Cuomo's drug-pricing proposal, and other state-level actions are facing similar resistance. The industry successfully fought off a ballot initiative in California that would have limited drugmakers' pricing power.
At the Maryland hearing, a PhRMA representative said the law “could threaten future innovation by ignoring key aspects of the R&D process, and it includes disclosure of proprietary information.” The lobby group for branded drugmakers also contends it doesn’t help address the central problem of drug pricing: patient expenses.
Proposals in the MD legislature (SB 437 and HB 666) do nothing to alleviate #healthcare costs that are impacting patients. 1/2— PhRMA (@PhRMA) February 23, 2017
However, the bill had plenty of support at Monday’s hearing, with groups including the Maryland Citizens' Health Initiative Health Care for All Coalition and Knowledge Ecology International (KEI) making arguments in favor.
“We believe that drug corporations may think twice before skyrocketing price increases if people would know, that on a specific drug, a huge amount of the price came from things like TV advertising,” Vincent DeMarco, president of Maryland Citizens' Health Initiative, said at the hearing.
Between 80% and 90% of Marylanders, plus other groups such as the AARP and NAACP, support the idea, DeMarco said.
Jamie Love, director of the nonprofit KEI, said such disclosure is important so people can “begin to develop a database” and delve more into the “economics of the industry.” Then, he said, the pricing debate can move away from “propaganda … to where facts matter.”
AAM, the generic and biosim industry’s organization, argued that generics companies have small margins to begin with. More reporting would be extremely burdensome, the group says, particularly if other states follow in Maryland’s footsteps.
That last point was one made by Bernstein analyst Ronny Gal. Even if the industry wins its fight in Maryland, “it is just too easy for a representative in another state to copy the bill,” Gal wrote in a recent investor note. Gal wondered whether industry is concerned because the bill is “well written,” or “because it has odds of passing.”
Aside from the cost reporting, pending legislation in Maryland would require companies to provide notice of certain price hikes; industry is against that idea too.
Elsewhere, PhRMA recently rolled out its campaign against New York Governor Andrew Cuomo’s drug pricing proposal, calling on officials there to “Prescribe Real Solutions.”
On a national level, a group of lawmakers, Sen. Bernie Sanders included, plan to unveil their new proposal for drug importation on Tuesday. A vote on the issue failed in January, and Sanders later told USA Today some Democrats lacked the “guts” to stand up to the pharma industry. Allowing imports of drugs from cheaper jurisdictions is a cost-saving idea that's made the rounds in Congress before, too.
Following the January vote, several senators asked new Department of Health and Human Services Secretary Tom Price,to consider the importation idea. PhRMA maintains that personal drug imports couldn’t be guaranteed to be safe. The lawmakers backing the most recent bill say they've included provisions to make sure the imports would be.