WASHINGTON. – Today, the Pharmaceutical Research and Manufacturers of America (PhRMA) filed a lawsuit to stop Medicare from negotiating for lower drug prices, joining Merck and Bristol Myers Squibb in challenging the constitutionality of the Inflation Reduction Act’s Medicare Prescription Drug Negotiation Program, which allows Medicare to negotiate lower prices for millions of people on Medicare. The authority to negotiate lower prices marks a historic victory against Big Pharma, making prescription drugs more affordable for American patients who pay up to four times more for the same drugs as people in other wealthy countries.
In response, Protect Our Care Chair Leslie Dach issued a statement:
“Big Pharma’s greed knows no bounds. While Americans are cutting pills and skipping doses, pharmaceutical companies are putting all of their energy into suing the federal government to protect their ability to charge patients outrageous prices to pad their sky-high profits. PhRMA spent record amounts on lobbying to kill the Inflation Reduction Act, and now they are doing everything in their power to stop the law from delivering lower costs to patients. The American people deserve better.”
Background
Merck Manufactures Pricy Diabetes Drug Likely To Qualify For Negotiation. Merck manufactures Januvia, a type 2 diabetes drug that is likely to be eligible for negotiation and has been on the market without competition for 17 years. In 2021 alone, Medicare spent over $4 billion on the drug.
Bristol Myers Squibb Manufactures Eliquis, Which is Likely To Qualify For the First Round of Negotiations. Bristol Myers Squibb is motivated to block the Negotiation Program because its blockbuster drug Eliquis is likely to qualify for negotiation. In 2021 alone, Medicare spent over $12.5 billion on the blood clot drug, which is taken by over three million Medicare beneficiaries. BMS is also motivated to block future negotiations over the price of its drugs after announcing that it anticipates several blockbuster drug launches in the near term that could deliver annual sales of $25 billion or more by the end of the decade.
Big Pharma Will Stop At Nothing To Protect Its Profits. This lawsuit is just the latest salvo in PhRMA’s endless war to protect its profits. In 2022, the pharmaceutical industry spent over $375 million lobbying against efforts to rein in prescription drug costs and tens of millions of dollars more on false and misleading television and online ads trying to defeat the Inflation Reduction Act in Congress.
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Protect Our Care is dedicated to making high-quality, affordable and equitable health care a right, and not a privilege, for everyone in America. We educate the public, influence policy, support health care champions and hold politicians accountable. We fight to expand access to affordable, high-quality health insurance, lower the cost of health care for individuals and families, and reduce inequities in health care based on gender, income, race, ethnicity, geography, or sexual preference.
Liz Wright says
Everyone would like lower drug costs. But in this case, the government is not negotiating drug prices. It is setting price controls in Medicare Part D. Anyone that has some basic knowledge about economics understands that price controls do not work. They distort markets, hurt innovation, and create shortages.
In fact, private negotiations were already occurring in Medicare Part D and had been for years. Pharmacy Benefit Managers in Medicare Part C plans (Medicare Advantage) or in Medicare Part D pharmacy benefit plans were already negotiating on behalf of their customers. What has driven up costs in the past few years was government interference in Medicare Part D plans, starting with the Affordable Care Act. It began implementing price controls in the coverage gap, sometimes called the “donut hole.” It added more cost controls in 2018. Those price controls distorted the market and helped fuel the higher costs today. Now the government has doubled down on price controls.
Other countries began using price controls on their pharmaceuticals years ago to help pay for their nationalized healthcare. Because they adopted those actions, the United States became the leader in drug research and development. Unfortunately, if this current policy stands in the U.S., there will be hundreds of innovative drugs that will never be developed.
Certainly, Medicare Part D needed some reform, first to remove the government mandates that distorted the market in the first place and updating its structure to provide real incentives to lower drug prices. American Action Forum, a center-right think tank that studies domestic fiscal policy had such a plan.
https://www.americanactionforum.org/research/redesigning-medicare-part-d-realign-incentives-1/
Congress and President Biden decided instead to offer a big government solution, found in the misnamed, “Inflation Reduction Act.” Several conservative groups opposed this plan and explained why in a letter.
https://e217a245-0934-448f-b4ac-5bb0ce3995ec.usrfiles.com/ugd/e217a2_f73d9298ccad4325b28e89459fed3713.pdf
Unfortunately, they did not listen.
Paul R. Plante says
Well=written and very informational!
Thank you.