Pelosi Slams Drugmaker Buybacks, Wants Price Cuts in Bill
(Bloomberg) -- House Speaker Nancy Pelosi said Thursday she is pushing to attach drug price cutting legislation to the major budget bill carrying most of President Joe Biden’s $4 trillion economic agenda in the coming months.
The top Democrat slammed drug companies for the level of stock buybacks and dividends in recent years and argued that cuts to prices will not harm research and development spending given new findings on buybacks.
The House Democratic bill would allow Medicare to negotiate drug prices, and then force drug companies to lower the prices they charge private insurers or impose huge fines on the companies. Pelosi said she wants it to be part of a special budget bill that can pass the Senate without Republican support since it is immune from the filibuster.
“We have an extraordinary opportunity to do this as we craft this reconciliation bill,” she said in a conference call with reporters. She added she is working with her own caucus and top Senate Democrats to come up with a version of the House bill that can get unified Democratic support.
To bolster efforts to address prescription pricing in the Biden budget bill, the staff of the House Oversight Committee on Thursday released a detailed report on drug companies’ buybacks and research and development spending.
“How can they say with a straight face that lower drug prices for Americans will come at the expense of research and development?” said Pelosi.
Buybacks and Dividends
The proposal as well as the report received swift pushback.
“Every year, biopharmaceutical research companies invest tens of billions of dollars in the research and development of new cures and treatments,” said Brian Newell, spokesperson for PhRMA, the biopharma industry’s lobbying group. “We are committed to working with policymakers on commonsense, bipartisan solutions that address the real challenges patients face.”
The report found that 2016 to 2020, the 14 top drug companies spent $577 billion on stock buybacks and dividends, according to the report. That is some $56 billion more than the amount spent on research and development, the report said. It estimates the savings from the drug price bill would equal less than half companies are expected to spend on buybacks and dividends over the next decade.
“Even if the pharmaceutical industry collected less revenue due to pricing reforms such as H.R. 3, drug companies could maintain or even exceed their current R&D expenditures if they reduced spending on buybacks and dividends,” the report said.
Pharmaceutical companies have deployed legions of lobbyists to thwart the House Democrats bill, arguing that it would deter the creation of new drugs and lead to suffering and death.
“Industry documents show how pharmaceutical companies exploit the U.S in part because the law won’t allow Medicare to negotiate drug prices,” House Oversight Committee Chairwoman Carolyn Maloney told reporters Thursday. “These companies are attempting to mislead the public by saying that any price reforms will hurt innovation. This simply is not true.”
It is not yet clear if the budget bill will include drug price changes, which were not initially part of Biden’s American Families Plan or American Jobs Plan proposals made to Congress in the spring.
The first step in the broader economic legislation is a budget resolution now being worked on by Senate Budget Committee Chairman Bernie Sanders. His draft plan incorporates drug-price changes to pay for an expansion of Medicare benefits and a lowering of the eligibility age to 60.
Sanders is working to get support in the Democratic caucus for his proposal, with a vote on it expected later this month. Pelosi told reporters that at this point the House is waiting for the Senate to propose an overall spending level.
A budget resolution passing both chambers of Congress would then set up a reconciliation bill, which can bypasses Republicans in the 50-50 Senate.
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