Bristol Myers Squibb has sued the Biden administration over Medicare’s new powers to negotiate drug prices under the Inflation Reduction Act. Why? Its blood thinner Eliquis will be subject to negotiations later this year, affecting profits.
When almost 80% of voters want the federal government to negotiate drug prices with pharma companies, it’s a strong statement that patients want lower prescription drug prices. Yet Merck and BMS could care less what the public wants. They’re both suing the government to stop them from negotiating drug prices. This clearly is a slap in the face to the public.
The Inflation Reduction Act passed in 2022 in a narrow party-line vote, empowered Medicare to negotiate drug prices for the first time in the program’s six-decade history. The law is the central pillar in the Biden administration’s efforts to control rising drug prices and was a significant victory for the Democratic Party.
Pharma has argued that lower prices will hurt R&D, but good investigative journalists have shown that to be untrue. The fact remains that pharma spends more on marketing and sales than R&D. In fact, marketing spending clocked in at $5.7 billion, compared with $5.5 billion for R&D. That’s a difference of just 7%. Over the past several years, Big Pharma has caught a lot of flak for unproductive R&D.
Every industry always claims that every regulatory initiative will hamper innovation and raise consumer costs and harm millions of innocent people. This is just PR persiflage, and you can safely ignore it.
According to the Department of Health, “prescription drug price increases create affordability challenges for patients and the government. This report tracks drug price changes from 2016-2022. There were 1,216 products whose price increases during the twelve months from July 2021 to July 2022 exceeded the inflation rate of 8.5 percent for that period. The average price increase for these drugs was 31.6 percent. Some drugs in 2022 increased by more than $20,000 or 500%. The Inflation Reduction Act introduces a new requirement for manufacturers to pay rebates to Medicare for Part D drugs whose price increases exceed inflation, beginning October 1, 2022, designed to reduce the frequency and size of drug price increases”.
Let’s cut to the chase: this is about shareholders, Wall Street, and overpaid CEOs. Endpoints collected data on over 350 CEO compensation packages, covering many pharma, biotech, and life sciences companies. All told, the 20 largest earners made over $725 million in 2022 — an average package of $36.4 million.
If you’re a patient who is struggeling to afford your prescription medications what are you supposed to think when you read a headline that another big pharma company wants to sue the government over prices?
Merck and BMS don’t have a constitutional right to sell their drugs to the government at the price they would prefer.
You can bet that the lobbying money will flow into politicians’ hands. They’ll use the same outdated and debunked arguments that PhRMA supplies, but in the meantime, they obviously could care less what the public thinks.