Fate of Lowering Drug Prices is Up-in-the-Air

Fate of Lowering Drug Prices is Up-in-the-Air

Because of divisions within their own party, top congressional Democrats are acknowledging for the first time they’ll have to scale back their drug pricing plans to win enough votes in order to pass their social spending legislation.

Among the possible options are dropping efforts to have the government directly negotiate the prices for medicines in private insurance plans and make fewer drugs subject to negotiations in Medicare.  They would still have the government negotiate drug prices for Medicare, however.

This appears to be the result of the pharmaceutical industry's lobbying powerhouse, Pharmaceutical Research and Manufacturers of America (PhRMA), having spent millions of dollars running TV ads (as well as print ones in newspapers) warning that the Democrats' proposal to rein in drug prices mean politicians “will decide what medicines you can and can't get.”

The problem with that argument, of course, is that Medicare already determines what drugs you can and can’t get, and private insurers do the same for their policy holders.

Lawmakers, aides, and lobbyists close to the process said the leaders are now discussing making fewer drugs subject to government negotiation, and shifting the benchmark for such talks away from prices paid in other developed nations.

This is seen by many as a coup for the pharmaceutical industry, which has spent more than $171 million on lobbying, more than any other industry so far this year. Though drug companies would prefer to kill the House plan entirely, weakening it may be their best-case scenario.