When it comes to potential pricing controls of the pharmaceutical industry, Jim Greenwood, chief executive officer of BIO, grimly stated that “nothing good” was going on in the halls of power in Washington, D.C.
When it comes to potential pricing controls of the pharmaceutical industry, Jim Greenwood, chief executive officer of BIO, grimly stated that “nothing good” was going on in the halls of power in Washington, D.C.
Addressing a crowd of stakeholders at the California Life Sciences Association’s “An Evening with Thought Leaders,” Greenwood noted that with national elections on the horizon, pricing rhetoric will intensify from candidates in both political parties. Several bills have been bandied about in Congress, but few pieces of legislation have moved forward due to the political divisions between the two chambers. Greenwood also pointed to some setbacks the White House has experienced regarding some of the plans it has put forth to bring down prices of drugs supported by the federally funded Medicare and Veterans programs.
Since before he was sworn in as president, Donald Trump has decried the list prices of prescription drugs. In 2017, he infamously said the pharmaceutical industry was “getting away with murder” when it comes to the list prices for drugs. Trump has used his Twitter feed to browbeat companies over price increases, such as Pfizer, and also flexed the power of the executive order. Trump has used or threatened to use executive orders multiple times to reign in pricing.
Earlier this summer, a federal judge dealt a blow to the White House and its plans to lower drug prices by requiring the disclosure of wholesale pricing for prescription drugs. The judge ruled that the government’s mandate was not enforceable. That mandate prompted some pharmaceutical companies, including Amgen. Eli Lilly and Merck to fight back with a lawsuit, which proved to be successful.
Trump also announced plans to issue an executive order to create a “favored nations clause” which will instruct government agencies buying prescription drugs to only pay the lowest price paid for by foreign countries, tying prices to the international price index. If the administration follows through on this plan, Greenwood said that would be a “disaster” for the industry – something that the U.S. Chamber of Commerce Global Innovation Policy Center (GIPC) also suggested when it released the results of a study only weeks ago. In his warning, Greenwood said if the U.S. went to the pricing index model, it would only cause other countries to lower their own drug prices, since they use the U.S. as a point of reference for pricing. That would in turn trigger the government-controlled pricing to drop even further and likely stymie significant research and development across the industry.
During his talk, Greenwood said on multiple occasions that Trump was looking for some kind of pricing reform simply so he could point to himself on the campaign trail as the one who got it done. He suggested that the president wasn’t really concerned with the retail end of drug pricing, only what the list price shows, since that can be quite high, particularly for treatments for rare diseases, such as the recently-approved gene therapy for spinal muscular atrophy that has a $2.1 million list price. Greenwood said the industry had been “heartened” by the administration’s plans to reform the rebate system, but said that hope burst when the administration withdrew the rebate proposal in July.
While there has been talk of importing drugs from Canada as a competitive move to lower prices, Greenwood poo-pooed that idea. Calling it a “nothing burger,” language used by Trump on many occasions,” Greenwood described it as another gimmicky-styled move Trump could use to say he single-handedly did something about drug prices.
While both parties want to pass significant legislation that will mandate pricing control of prescription drugs in the United States, Greenwood hinted that the election may actually work in the favor of the industry due to the political divisions. Neither political party wants to be able to give candidates from the other side any potentially significant legislative victory to be used on the campaign trail.
In addition to Greenwood’s warnings about price-control legislation and the election, Janet Trunzo, head of regulatory affairs for the Advanced Medical Technology Association (AdvaMed), shared some legislative goals for the medtech industry, which includes a top priority of repealing the medical device tax, which goes into effect on Jan. 1. Although bills have been introduced to repeal the 2.3% tax, they have not been passed by both chambers of Congress. CLSA called the tax “ill-conceived.” Supporters of the excise tax have said repeal will remove a potential $20 billion over 10 years from the government’s coffers.
Urging the attendees of the CLSA event to be proactive, Greenwood told the crowd they need to know who their congressmen are and that they need to know they can reach out and talk to them about legislation that will impact them.
