Vermont Senator Peter Welch joined advocacy organizations to discuss efforts to protect a provision of the Inflation Reduction Act that will allow the federal government to negotiate the price of prescription drugs for Medicare recipients.
The Inflation Reduction Act’s Medicare Drug Price Negotiation Program will allow Medicare for the first time to negotiate prescription drug prices with pharmaceutical companies. The Biden Administration is expected to issue final guidance by early July. Protect Our Care Chair Leslie Dach says the new law will end the ability of drug companies to charge whatever they want.
“In September the Administration will announce the first ten drugs to be negotiated. So it’s no surprise that the drug companies and their trade association are now working with Republicans in Congress trying to repeal the law, weaken the law and defund the law,” Dach said. “The companies and the trade associations along with a series of front groups are now in courts around the country to find a court that will weaken or overturn the statute. So while reform is on its way and lower prices are on its way, we must remain ever vigilant.”
Senator Peter Welch, a Democrat, says Americans pay on average two and a half times more for prescription drugs than any other country.
“The pricing power of PhRMA has been abused year in and year out to just escalate these prices of pharmaceuticals. PhRMA has made huge profits,” Welch said. “It has had the capacity to dictate their price. No other industry has it. Even defense contractors have to negotiate on the price that’ll be paid. So this price negotiation legislation that President Biden signed is finally going to give a tool to Medicare to do what every other government does and that is stand up for fair prices for prescription drugs.”
Protect Our Care has released a new report “Why Medicare Needs the Power to Negotiate for Lower Drug Costs.” Primary author Andrea Harris says it reviews the first five drugs expected to be approved for negotiations.
“The report highlights how five drug companies have exploited their market power to raise prices at rates that far exceeded inflation, costing seniors thousands of dollars out of pocket and costing taxpayers tens of billions of dollars,” Harris said. “Each profile is a deep dive on the characteristics of the drug since its launch. They show that big drug companies make these lifesaving medicines unaffordable to seniors, rapidly increasing their prices and systemically exploiting the patent system to protect billions in revenue, even following tens of billions of dollars in sales.”
Initiative for Medicines, Access and Knowledge Co-Founder and Co-Executive Director Tahir Amin said prescription drug spending in the U.S. has tripled since 2000 to nearly $400 billion and is poised to expand a further 50 percent within ten years, fueled by branded drug sales.
“Branded drugs make up just 8 percent of prescriptions versus 92 percent of generics but account for 84 percent of all drug spending in the United States,” Amin said. “One of the big reasons for why drug companies are able to keep their prices high for as long as possible is the way they have abused the patent system. Drug companies are extending their patent life for longer and longer. The Inflation Reduction Act and some of the provisions and implementing guidelines it actually will curb some of these excesses that the drug companies have been able to develop through patenting games.”
Welch reiterated that the baseline issue is affordability.
“And it can’t be affordable if the pharmaceutical industry can charge whatever they want,” Welch said. “So we’ve got to stop it. There’s got to be fair prices and fair prices can be achieved through negotiation.”
An email to the Pharmaceutical Research and Manufacturers of America - PhRMA - requesting comment has not been returned. In a June 21st press release, the organization announced it had filed a lawsuit in U.S. District Court for the Western District of Texas claiming the price setting provisions in the Inflation Reduction Act are unconstitutional.
