If passed in Congress, new drug pricing bills could reduce pharmaceutical companies’ profits by millions of dollars. Concerned about losing pricing power, industry executives and lobbyists are pushing legislators to block the proposals and instead pursue regulation that would offer patients lower costs without directly affecting industry profits, shifting the pressure onto middlemen such as pharmacy benefit managers (PBMs).
Additionally, trade organizations and advocacy groups are spending millions on advertisements attacking the proposals. In August, the conservative issue advocacy group American Action Network launched a $2.5 million campaign targeting 35 congressional districts, warning against “socialist price controls.”
Political support for drug makers across parties, even among Republicans who were generally more sympathetic, has waned due to public criticism of high drug prices, with legislators in both parties introducing several approaches to rein in drug costs. Last October, the Trump administration proposed basing the cost for certain medications on the prices other countries pay, which are often lower than in the U.S. In July, the Senate Finance Committee, chaired by longtime skeptic of the pharmaceutical industry Sen. Charles E. Grassley (R-IA), approved a bill that would require drug companies to rebate any list price increases exceeding the rate of inflation to Medicare. In September, House Speaker Nancy Pelosi (D-CA) proposed a bill that would allow the federal government to negotiate prices for up to 250 drugs without generic competitors.
Drug makers argue that these pricing measures would restrict patient access to medications and reduce research and development funding for future drugs.
“We want to be proactive in terms of making sure our position is heard down in Washington. And many of us, including myself, get down there and make sure we have the conversations that need to be had,” Pfizer CFO Frank D’Amelio said at an investor conference this month.