News Release

Healthcare Companies Fighting Drug Price Reform

New investigations show that Republican lawmakers are working behind closed doors to “tank Democrats’ watered-down but still potentially impactful proposal to require Medicare to negotiate the prices of a small number of prescription drugs directly with pharmaceutical companies.” Senator Brian Schatz (D-Hawaii) said this week that “every single elected Republican in the Senate is about to vote against reducing the cost of prescription drugs for those on Medicare.” 

The pharmaceutical industry is also fighting the legislation

STEVE KNIEVEL; sknievel@citizen.org
    Knievel is an advocate for Public Citizen’s Access to Medicines program.

Knievel told the Institute for Public Accuracy today: “There is no change in the latest version of the Inflation Reduction Act compared to what was submitted by the Senate Parliamentarian a few weeks ago. Whatever changes are demanded by the Parliamentarian aren’t reflected yet––and hopefully they will be minor ones. This is 90-95% the same bill as what the Senate was considering at the end of last year. Significantly, [the bill] expands eligibility for the Medicare Part D low-income subsidy, which is a positive change that will help expand access for that program.”

The negative part, Knievel says, is that the bill has been “stripped of all references to insulin. This is disappointing because insulin-specific language has been included in all of the predecessors and antecedents to this bill, including HR3 and Build Back Better. It’s been our expectation all along that those would remain. 

    “Three components of the bill were slashed: the first specifically requires insulin products to be negotiated by Medicare, the second mandates that Medicare Part D plans provide insulin to their beneficiaries at no more than $35 per month out-of-pocket or less, and the third expands that last benefit to people on private insurance. We expected all along that the third component would be taken out––but we understand that the other two pieces are not problematic with the Parliamentarian, and we are pushing for them to be restored.” A letter from the organization addressed to Majority Leader Chuck Schumer demands that policymakers include “price negotiation and Medicare out-of-pocket cost provisions that have previously been uncontroversial in the caucus.” It remains unclear whether those pieces will make it back into the bill. If they are reincluded, Knievel notes, advocates could then “try to come back around” for out-of-pocket cost caps for privately insured individuals.

New analysis from Public Citizen shows that if the reconciliation bill’s requirement to negotiate prices for insulin is not restored, three of the nation’s top insulin products would be unlikely to be negotiated. The new bill limits negotiations to single-source drugs without generics or biosimilar competition––but three popular insulins “either already have or are expected to have biosimilar competition before the negotiation mechanism is set to apply.” 

There is also a chance that Senators Shaheen, Collins, and Manchin would attempt to hold out for bipartisan support after the August recess. “But that would be a dangerous choice to make,” Knievel says. “They should do what they can now––full stop.” 

Jim Kahn––a professor of health policy, epidemiology, and global health at the UCSF School of Medicine––added: “If passed, this drug price regulation bill would be a tiny step in the right direction. It would establish the principles that the Medicare program can negotiate the prices of (for now, only 10) drugs, that price increases should not exceed inflation, and that Medicare beneficiaries should be protected from devastating out-of-pocket drug cost-sharing. The desperate attempts of pharma companies to derail this foot in the door to sane drug price regulation are unsurprising in their protection of the industry’s sky-high profit margins. Every other wealthy country negotiates drug prices. We stand alone in supporting drug company shareholders and thus making life-saving medications unaffordable.”

The advocacy group Patients for Affordable Drugs estimates that pharmaceutical companies have raised drug prices 1,186 times so far this year alone.