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Pharma lobby heats up opposition on drug pricing

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Pharmaceutical companies are lobbying lawmakers to oppose a new bill aiming to tie drug prices to overseas markets, arguing that drug pricing is integral to research and development calculations. | PHOTO COURTESY OF UNSPLASH/CHRISTINA VICTORIA CRAFT

WILMINGTON – Leaders of four of Delaware’s largest business organizations recently signed onto a regional letter voicing opposition to a bill proposed in Congress that would dramatically alter how prescription drugs are priced.

That combined opposition also joins a national pharmaceutical industry laborers’ group advertising blitz aimed at legislators who may be on the fence.

It will likely pit businesses against public opinion though in a fight for legislators’ votes this fall as polling shows the vast majority of Americans are in favor of reining in drug prices. Progressive organizations also see the current budget reconciliation process as the best opportunity for such reforms in about a generation.

The leaders of the Delaware State Chamber of Commerce, Delaware Business Roundtable, Delaware Bioscience Association, and the New Castle County Chamber of Commerce joined 23 similar groups from Pennsylvania and New Jersey in voicing concerns about the impact of House Resolution 3, also known as the “Elijah E. Cummings Lower Drug Costs Now Act.” The groups argue HR3 imperils many of the more than 575,000 jobs directly and indirectly tied to the biopharmaceutical sector in the states, $16 billion spent by sector companies on vendors annually, and $154 billion in annual economic output.

At its core, HR3 would embolden the federal government to negotiate maximum prices for some of the most widely purchased single-source, brand-name drugs that lack generic options. The negotiated prices, to be offered under Medicare, cannot exceed 120% of the average price in developed nations overseas. Failure to adhere to those prices would result in a staggering 95% excise tax on their sales.

A similar version of the bill passed the House in the 116th Congress but died in the Senate last year, forcing it to be reintroduced this year. The business groups, coming from states that have significant life sciences industries, have redoubled their opposition now that slim Democratic majorities in Congress paired with a Democratic president pushing for reform could aid the bill’s passage.

Pricing of drugs is an integral part of the equation when pharmaceutical companies decide which to pursue in research and development, and they warn that reducing potential returns on those drugs could reduce the almost $100 billion invested in research annually. Health care startup executives and investment hedge funds warned lawmakers in a letter that the proposal could torpedo private investment in drugs of the future.

“Congress may not intend to dictate the price for every drug. But dictating the price of drugs covered by Medicare would defund R&D for diseases of aging, including Alzheimer’s, osteoporosis, and cancer. Dictating prices for medicines priced above a certain threshold would defund R&D for rare diseases. Dictating prices for medicines that generate the most total revenue would defund R&D for our most difficult diseases, since those are the ones that require greater expected revenues to incentivize substantial R&D investment,” they wrote Sept. 8.

The industry argues that Congress should focus on policies that will actually lower patients’ out-of-pocket costs without jeopardizing their access to future cutting-edge therapies and treatments. That includes reforming Medicare coverages under its varied plans and the limits of out-of-pocket expenses in health insurance while also building out the production supply chain for generic drugs once drug patents expire.

Michael Fleming | PHOTO COURTESY OF DELAWARE BIO

“We’re very fortunate to be part of one of the most thriving regions for biomedical innovation in the country, if not the world. So, we want to be sure that our that our elected leaders in Washington understand the incredible value and impact that the sector is having and the immense potential for continued growth that’s going to continue to benefit patients and the economies of the region,” said Michael Fleming, president of the Delaware Bioscience Association.

U.S. Rep. Lisa Blunt Rochester (D-Del.) has already co-sponsored HR3, signaling her support after voting for the 2019 version of the bill, while Delaware Democratic Sens. Tom Carper and Chris Coons have not yet had to take a stance on the legislation.

PILMA, an industry laborer group, has been targeting Delaware Sens. Tom Carper and Chris Coons with newspaper and social media ads like these in recent weeks. | SCREENSHOT

The Pharmaceutical Industry Labor-Management Association is particularly targeting Carper in an ad campaign as he sits on the Senate committee that would write the companion bill there. It may be working, as Carper told STAT News on Sept. 14 that the plan was “too ambitious.”

The lobbying efforts from the powerful pharmaceutical industry was also paying off in the House this session, as the House Energy and Commerce Committee deadlocked on HR3 in a Sept. 15 vote, preventing its inclusion in the broader budget reconciliation bill that Democrats are hoping to use as a catchall for President Joe Biden’s agenda. Three centrist Democrats joined Republican colleagues in the committee vote, potentially previewing the difficulty that Democrats will face is passing the proposal this year.

The struggles for the proposal come as proponents promote its public popularity though. A May survey by the health policy think tank KFF found that 88% of Americans favor allowing the federal government to negotiate for lower prices on medications, including 77% of Republicans, 89% of independents 89% and 96% of Democrats.

A national bus tour by progressive cause group Protect Our Care and online campaigns by Data for Progress and Patients For Affordable Drugs Now have been pushing that fact to legislators, with Rep. Blunt Rochester attending a bus tour stop in Delaware this year.

“This issue has been litigated in the court of public opinion for years now, and even in the midst of a pandemic, voters are clear: They want Medicare to negotiate lower prices on behalf of Americans,” said David Mitchell, a patient with an incurable blood cancer whose drugs carry a list price of more than $900,000 per year and founder of Patients For Affordable Drugs Now. “Patients and consumers are hurting, too often having to choose between paying outrageous prices for their drugs or covering costs of other necessities. We support Congress and the Biden administration as they act to end this injustice in America.”

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