Setting the record straight on Historic drug pricing reforms
The Senate just passed the Inflation Reduction Act which includes historic drug pricing reforms. Big Pharma is continuing to spread lies to scare patients and lawmakers in an attempt to maintain its unilateral power to dictate prices of brand-name drugs. Below, we’re debunking five of the industry’s lies about innovation, access, COVID-19 vaccines, out-of-pocket costs, and partisan priorities, and setting the record straight with the truth about what the drug pricing reforms would mean for patients.
Big Pharma’s Lie: Drug pricing reforms will stifle innovation.
The Truth: We can maintain the innovation we need at prices we can afford.
Summary: The historic drug pricing reforms before the Senate will bring an end to the pharmaceutical industry’s unilateral power to set and raise prices at will, while maintaining the valuable drug innovation we need. While Big Pharma’s profits have continued to soar, the industry is falsely claiming that these reforms would grind research and development of new drugs to a halt. In reality, the legislative package agreed upon in the Senate would only decrease the number of new drugs over the next 30 years by 15 out of 1,300 expected new drugs – that’s less than 2 percent. Further, only 10 percent to 15 percent of new drugs are truly innovative in the first place. Any biopharmaceutical industry revenue lost from the proposed drug price reforms would only be a drop in the bucket for an industry with profits that are almost three times the average of the S&P 500. The truth is, the drug pricing package continues to incentivize the industry to find new, innovative drugs in the same way we do now, by allowing drug companies to set launch prices and giving new drugs 9 to 13 years before becoming eligible for Medicare negotiation. The provisions protect special incentives to develop rare disease treatments and continue to reward pharmaceutical innovation.
Patient Perspective: Don Kreis’ daughter, Rose, lives with a type of cystic fibrosis for which the current breakthrough medications don’t work. Rose is still waiting for her miracle drug, but Don fears when it comes to market, Big Pharma will price it out of reach. “When a new drug comes to market, will she be able to even consider taking it? No one cares more about innovation than us — but these drugs are worthless if Rose can’t afford them,” he writes. Kris Garcia, who lives with four bleeding disorders, asthma, and several allergies, explained in a recent op-ed in the Colorado Sun that, “We do not have to choose between innovation and lower drug prices. We can and will have both once the Senate passes these reforms through reconciliation.” Each vial of his medication, Humate-P, is priced at $10,000, and for each infusion, he needs four vials. “For me, these reforms would help bring predictability and consistency to my drug prices.”
Big Pharma’s Lie: Drug pricing reforms will make it harder for patients to get their medications.
The Truth: The biggest barrier to patient access right now is the high prices of drugs. The reforms will increase patient access by lowering prices.
Summary: The biggest barrier to patient access is high prices – far too many patients across the country struggle to afford their medications. A 2021 survey found that nearly 40 percent of patients did not take their drugs as prescribed due to high costs, and 20 percent of patients took on debt to pay for their medications. It’s estimated that more than 5 million Medicare beneficiaries had trouble affording their medications in 2019, with rates highest among Black and Latino seniors. If current trends continue, 1.1 million beneficiaries could die this decade because they can’t afford the drugs they need. Lower drug prices from Medicare negotiation and limits on price increases would improve medication adherence and people’s health, according to the Congressional Budget Office.
The reforms being considered by the Senate would address the high prices driving patients to go without their needed medications and preserve long-standing government policies on drug coverage that protect access. Medicare will continue to be required to cover all drugs in six protected classes and at least two medications in each class of drugs. Medicaid must still cover every drug offered by a manufacturer in the United States if the manufacturer agrees to give Medicaid a best price guarantee. Additionally, even with lower prices, drug companies will continue to file for drug approval first in the United States, given that we are by far the largest market in the world with the highest prices in the world.
Patient Perspective: Katherine Pepper, a Washington patient who lives with an autoimmune disease, takes Humira, a medication that has a monthly price of $6,409. Katherine writes, “As a senior living on a fixed income, I’ve had to choose between filling my Humira prescription or buying groceries. That’s a decision no one should have to make.”
Therese Humphrey Ball, an Indiana patient living with multiple sclerosis, shares about a time when she couldn’t access her medication at all because of its price. “In 2017, I was forced to go off of Copaxone entirely because I simply could not pay its $6,000 monthly cost,” she writes. “Without the medication I needed, I began having difficulty with my cognitive function. I work really hard to keep my life in order and my memory intact even with MS, so this was devastating. I lost something that is so valuable to me.”
Vanessa Ladson, a Delaware patient living with lupus and fibromyalgia, writes, “I am on a fixed income, and I have to scrimp and save just to be able to eat. I can’t afford all of my prescriptions, including the blood thinner Eliquis, which is priced at $500 per month. Instead, I take a cheaper drug that gives me a higher risk of bleeding.”
3. Covid-19 Vaccines
Big Pharma’s Lie: Drug companies saved us with their COVID-19 vaccines. Cracking down on their prices now could hinder future vaccine and drug development.
Summary:Taxpayer funding was the engine behind the COVID-19 vaccines, and the agreed upon package of drug pricing reforms will allow the United States to continue leading in drug development while allowing patients to access the medications and vaccines we need at prices we can afford. Taxpayers paved the way for the successful COVID-19 vaccines by investing billions of dollars in research prior to the pandemic and assuming the financial risk after the pandemic began by funding clinical trials, boosting manufacturing capacity, and making advance purchase agreements. Research into the mRNA technology behind the vaccines began decades ago in federally funded labs, and analysts estimate that the U.S. government spent between $18 billion and $23 billion on developing and manufacturing COVID-19 vaccine candidates after the virus emerged. Moderna even admitted that its vaccine was 100 percent funded using federal dollars — in fact, NIH scientists have filed applications for several patents related to the vaccine.
While drug companies like Pfizer and Moderna try to scare patients by threatening the future of vaccines under the drug pricing reforms, theirexecutives have reaped enormous profits on the COVID-19 vaccines. Pfizer is expected to shatter records with $32 billion in sales this year while Moderna projects $19 billion in sales this year. As COVID-19 is expected to be endemic, Moderna CEO Stéphane Bancel says the company is preparing to raise prices. To ensure Americans are protected from price gouging on life-saving vaccines, we must pass reforms to limit price hikes to the rate of inflation.
Taxpayer Perspective: In this New York Times op-ed on the role taxpayers played in developing the COVID-19 vaccines, P4AD founder David Mitchell writes, “Americans should stop buying the pharmaceutical industry’s argument that innovation and new drug development will dry up if the government uses its purchasing power and bargains to get a better deal. The United States spends more per capita than any other wealthy nation for prescription drugs — often the same drugs available for far less overseas. … This year, we can achieve reforms that both advance innovation and ensure Americans can afford the medicines — and vaccines — we need.”
4. Out-of-Pocket Costs
Big Pharma’s Lie: Patients only care about lowering out-of-pocket costs. We don’t need reform.
Summary: Big Pharma has attempted to create a false dichotomy by claiming patients only want their out-of-pocket costs to go down. That’s simply impossible. In order to lower out-of-pocket costs for patients, we must lower underlying prices, or we will simply pay more in premiums and higher taxes because insurers and federal health plans will make up the difference through cost shifting. Capping out-of-pocket costs without lowering drug prices simply shifts costs – it doesn’t lower them. The Alzheimer’s drug Aduhelm is a prominent example of this process: After the manufacturer, Biogen, priced the drug at $56,000 per year, the Centers for Medicare and Medicaid Services announced that Medicare Part B premiums would increase by nearly 15 percent the following year — one of the largest increases ever — to accommodate the astronomical cost. Passing the historic drug pricing reforms that include Medicare negotiation will address the headwater of the issue — high list prices — and lead to lower prices and out-of-pocket costs for patients.
Small Business Perspective: High drug prices are a major challenge for small business owners and leaders. In a recent statement, Rhett Buttle, senior advisor for Small Business for America’s Future, explains: “We also need to help small businesses with unreasonable expenses that cut into their bottom line and hinder their growth. … Small business owners identify the cost of healthcare and prescription drug prices as their top concern and strongly support solutions like allowing Medicare to negotiate the price of prescription drugs.”
Patient Perspective: Nevada teacher and type 1 diabetes patient Jamie Tadrzynski writes in the Las Vegas Sun, “Any proposal that caps the cost of one or more drugs will not fundamentally address the root of the problem, which is rising prices. The government can take action to help seniors and others afford their medicine, but without negotiations that actually stop the drug corporations from charging whatever they want and raising prices at will, cost containment can only have limited impact for a limited number of patients while burdens continue to rise for taxpayers, businesses, and those paying premiums.”
5. Bipartisan Support
Big Pharma’s Lie: The package of drug pricing reforms is an unpopular partisan plan pushed by Democratic congressional leaders.
The Truth: Drug pricing reform has overwhelming bipartisan support across the country.
Summary: Americans – Republicans, Democrats, and independents alike – overwhelmingly support action to lower drug prices. Nine in 10 Americans support allowing Medicare to negotiate prices and limiting annual drug price hikes to the rate of inflation. Medicare negotiation is the most popular priority in the president’s economic plan. Nearly 90 percent of voters said drug pricing is an important issue heading into the November midterm elections, and 3 in 4 said a failure by Congress to lower drug prices will affect their vote. In February, over 90 groups representing patients, seniors, consumers, unions, employers, physicians, and disease advocacy groups signed a letter urging the Senate to pass the drug pricing reforms in a reconciliation package. There is a clear path forward for Congress to pass the drug pricing reforms and help patients and taxpayers now.
Patients’ message to Congress is clear: Stop price gouging, lower out of pocket, and let Medicare negotiate NOW. Watch ⬇️⬇️⬇️ pic.twitter.com/uiPO3kFLKa
Patient Perspective: “While our country wrestles with deep divisions on so many issues, the overwhelming popularity of prescription drug pricing reforms before the Senate right now is striking. Despite Big Pharma’s record spending on lobbying and dark money campaigns to block the drug pricing reforms, patients know the provisions will allow for the innovation we need at prices we can afford, increase access to drugs, continue funding for COVID-19 vaccine development, and save lives. Americans are depending on Congress to fulfill its promise and pass comprehensive drug pricing reforms now,” says David Mitchell, a patient with incurable blood cancer whose drugs carry a list price of more than $900,000 per year and founder of Patients For Affordable Drugs Now.