The Pharmaceutical Research and Manufacturers of America (PhRMA) on Thursday expressed opposition to a proposal by the US Senate Finance Committee that would force drugmakers to pay rebates to Medicare if their drug price increases outpace the rate of inflation. Stephen Uhl, chief executive at the industry trade group, claims the measure "would siphon more than $150 billion from researching and developing new medicines and give those savings to the government, insurers and [pharmacy benefit managers], instead of using those savings to lower costs for seniors at the pharmacy counter."
The proposed legislation, which was supported by the Senate Finance Committee on Thursday in a 19-9 vote, also recommends a cap on out-of-pocket costs for drugs covered under Medicare Part D as well as changes to Medicare Part B. White House spokesman Judd Deere stated that the administration of President Donald Trump is "encouraged by the bipartisan work of [Senate lawmakers] to craft a comprehensive package to lower outrageously high drug prices."
However, Uhl suggested that while the legislation would create an out-of-pocket cap, the proposal is projected to benefit only 2% of Medicare patients starting in 2022. Moreover, he said the measure fails to ensure that discounts negotiated by Medicare are passed on to patients in the form of lower out-of-pocket costs, and it also "replaces the successful, market-based structure of Medicare Part D with Medicaid-style price controls that result in money going to the federal treasury instead of seniors."
PhRMA disclosed that it had met with Trump to express its opposition to the proposed Senate legislation, with Uhl saying "we want to work with the administration and Congress on a better solution that avoids price controls and provides greater cost relief for seniors." Regarding individual drugmakers, Amgen confirmed that it attended the meeting, but declined to provide any details, while a source familiar with the situation said Pfizer was also present.
Separately on Thursday, people close to the matter revealed that Trump was preparing an executive order that would cut the prices of nearly all drugs purchased by governmental healthcare programmes including Medicare. According to the sources, the executive order could be delayed if the Senate proposal receives bipartisan support.
Trump recently announced that he was also preparing a separate executive order that would require the US to pay no more for prescription drugs than the country with the lowest prices. Meanwhile, another proposal requiring pharmaceutical companies to disclose the prices of drugs in direct-to-consumer television advertisements was invalidated by a federal judge earlier this month.
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