KEY ARGUMENT: The Lower Drug Costs Now Act, spearheaded by the House speaker, Nancy Pelosi, could save $345 billion in federal spending over seven years, the Congressional Budget Office has found. It could also reduce out-of-pocket costs by $158 billion over a decade, according to a nonpartisan federal report. The argument that the money this will cost the industry is moot as pharma has spent tax breaks they received on stock buybacks, not R&D.
According to the Times “, the proposed law would enable the Health and Human Services secretary to negotiate prices directly with drugmakers on as many as 250 prescription drugs that Medicare spends the most money on. It would cap the final price based on the average paid by several peer nations, including Australia, Britain, and Canada.
The pharmaceutical industry could lose as much as $1 trillion in profits over a decade, and as a result, would bring roughly eight to 15 fewer drugs to market during that time period (out of the 300 or so that would be expected), the Congressional Budget Office estimates”.
PhRMA, the industry propaganda spokesperson, continues to tell us that this bill if it becomes law, will lead to a decline in the development and introduction of new drugs. Pharma made that argument irrelevant when they used tax breaks for stock buybacks and the new form of R&D, buying smaller biotech companies.
As the Times states, “other countries take a different tack. They decide what they are willing to pay for a given drug based on how strong that drug’s clinical benefit is, or whether it is cost-effective compared with similar medications already being sold. As a result, some new drugs aren’t covered in those countries — but those that are covered are generally effective and affordable. This approach acknowledges that innovation is useful only if people can afford the resulting products”.
They continue “there are huge incentives to bring certain new cancer drugs to market, even when those drugs have little impact on survival rates, but comparatively few incentives to develop antibiotics or treatments for diseases that predominantly affect low-income communities — both of which are urgently needed. Even the Health and Human Services secretary, Alex Azar, a former pharmaceutical executive, has called the drug industry’s projections of innovation loss “mathematically unbelievable.”
The pharma industry still wastes a lot of money. There are big expenses in salespeople who have become annoyances to HCP. DTC is largely ineffective, yet the dollars flow into the channel, and salaries for CEOS are totally irrational.
The bill will surely die in the Senate where pharma lobbying money is flowing freely, but it will be back. When it’s implemented, the nuclear winter for pharma is going to consist of downsizing and substantial budget cuts. Agencies will close offices, and DTC budgets will be cut. Don’t threaten me with the possibility of fewer drugs that will drain my bank account.