Pelosi May Revive Drug Price Bill With Infrastructure Package
(Bloomberg) -- House Speaker Nancy Pelosi said Tuesday Democrats are discussing adding a provision to upcoming infrastructure legislation that would let the government negotiate drug prices, a move that would take a big bite out of pharmaceutical companies but help pay for expanded health programs.
The move would allow the government use its buying power to bargain with drugmakers in order to lower costs for the Medicare program. Pelosi cited estimates by the Congressional Budget Office for a previous bill put forward by Democrats but never passed by Congress that negotiating prices would save the federal government $456 billion over a decade.
“We would be missing an opportunity if we did not include lowering the cost of prescription drugs,” Pelosi said on a conference call commemorating the 11th anniversary of the Affordable Care Act by advocacy group Protect Our Care. “We could save almost a half trillion dollars — almost $450 billion — that could be used to improve the affordability and the access.”
Pelosi said one of her priorities is finding a way to make permanent higher subsidies for the Affordable Care Act in the $1.9 trillion Covid relief package. “Everything is on the table” for other improvements when asked about other health priorities like expanding the eligibility for Medicare and opening more community health centers, she said.
Earlier Tuesday, Senate Budget Chairman Bernie Sanders introduced an even more sweeping effort to lower prescription drug prices along with a number of House members. Senate Finance Chairman Ron Wyden has also publicly committed to “bold” legislation to lower drug prices.
Under the earlier House Democratic bill, the government would negotiate prices of drugs and biological products that lack competition from generic drugs or biosimilars, as well as insulin. The price of these medicines would be capped relative to their cost in Australia, Canada, France, Germany, Japan, and the U.K., where the governments actively negotiate with drugmakers and prices are often much lower than in the U.S.
The pharmaceutical industry lobbied hard against the bill when it passed the House in late 2019. The Pharmaceutical Research and Manufacturers of America spent $29 million lobbying that year, the most they’d ever spent in one year, according to federal disclosures.
A more modest bipartisan Senate effort was passed by the Finance Committee in 2019 but didn’t receive consideration on the floor. That could change with Democrats now in charge.
A Wall Street analyst earlier Tuesday downgraded his ratings of six pharmaceutical companies, including GlaxoSmithKline Plc, on fears the industry will face tougher regulation under the Biden administration.
“The industry and its investors will need to adjust to a different regulatory environment to the one they have enjoyed for the last five years,” SVB Leerink’s Geoffrey Porges said in a note to clients explaining his decision to downgrade expectations for the stocks to in line with market averages. Porges had rated the companies as having the potential to outperform the market.
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