Drug manufacturers, worried about losing pricing power, are lobbying hard

Industry leaders and lobbyists urge friendly lawmakers to pass laws blocking these plans. They also urge government officials to take action to lobby industry middlemen, such as drug benefit managers, to reduce costs for patients without directly reducing power. pricing of drug manufacturers.

Price proposals, if adopted, could reduce business sales by billions of dollars, analysts say. The industry is trying to delay the adoption of plans it opposes until the end of this year, say people familiar with the case, as it is unlikely that Congress can act during the election campaign next year.

However, drug manufacturers do not have the political weight they were used to because of the public's growing dismay at high drug prices. Even some Republicans, who generally have more sympathy for the industry, have joined in the criticism of high prices.

The industry lost a key ally when

Senator from Utah, Orrin Hatch,

a Republican, retired last year. In addition, Iowa Senator Chuck Grassley, long skeptical of the pharmaceutical industry, returned to the chair of the Senate Finance Committee last year.

In July, the Finance Committee approved a bill that would require drug manufacturers to pay back to the federal Medicare program any increase in catalog prices exceeding the inflation rate. Mr. Grassley was a co-sponsor of the bill with

Senator Ron Wyden

from Oregon, the highest democrat of the committee.

The Trump administration, last October, proposed to base the price that Medicare was paying for cancer, eye and some other price-related drugs in other countries, including Europe, where drugs are cheaper.

And President of the Chamber

Nancy Pelosi,

A Democrat tabled a bill Thursday that would allow the government to directly negotiate prices for up to 250 expensive drugs that are not subject to generic competition.

"We are facing the political headwinds of the sector's history," said James Greenwood, chairman of the Biotechnology Innovation Organization business group, in an interview. BIO member companies understand

Amgen
Inc.

Johnson & Johnson

JNJ 0.07%

and

Pfizer
Inc.

In response to drug pricing efforts, Greenwood, a former Republican congressman from Pennsylvania, said he and his team visited dozens of congressional members, a White House advisor.

Joe Grogran,

who was previously pushing for the drug maker

Gilead Sciences
Inc.

and MPs to the Secretary of Health and Social Services

Alex Azar,

an old

Eli Lilly

& Co. official.

"We want to be proactive so that our position is heard in Washington," Pfizer's chief financial officer.

Frank D'Amelio

said at an investor conference this month. "And many of us, including myself, go down there and make sure we have the conversation that we need to have."

The drug industry supports a key provision of the Senate bill, namely the cap on annual prescription expenses for people covered by the Medicare Part-D plan.

And companies are willing to negotiate on some other laws, such as a bill requiring expensive brand-name drug companies to share samples with their competitors to develop lower-cost versions of copying, said people familiar with the law. subject.

However, the industry is opposed to more ambitious price measures, arguing that such measures would limit patients' access to medicines and could reduce funding for research and development of future drugs.

Analysts believe the Trump administration's international pricing proposal poses a particularly strong threat, as it would lower prices paid by the government's Medicare Part B health insurance program, to which could be added private insurers. The proposal, if implemented, would reduce Medicare's spending on affected drugs by 30 percent, or $ 17.2 billion, over five years, the administration said.

In addition to forcing companies to pay rebates on price increases above inflation, the Senate bill would increase the maximum discounts that drug companies already pay to federal-US Medicaid programs. for insulin and some other drugs.

"We could potentially sell to Medicaid at a negative price. It is not reasonable to expect companies to sell at a negative price, "said AstraZeneca PLC's Managing Director.

Pascal Soriot

said in an interview.

Together, the Medicare-based inflation discount and the Medicaid rebate increase would allow government programs to save about $ 70 billion in spending over 10 years. Much of the money would represent a loss of revenue for the industry, according to Moody's Investors Service.

The largest industry group, Pharmaceutical Research and Manufacturers of America, spent $ 16.3 million on lobbying in the first six months of this year, after spending $ 28 million for 2018, according to the Center for Responsive Politics, which tracks lobbying expenses. BIO spent $ 6 million on lobbying in the first half of 2019, after spending $ 9.9 million in 2018.

Outside groups, favorable to the drug industry, also intervene. American for Tax Reform, which advocates lower taxes, has published advertisements in newspapers in some states, thanking or opposing senators for voting on the Senate finance bill.

A thanked announcement

Senator Pat Toomey,

a Republican from Pennsylvania who proposed an unsuccessful amendment to block the inflationary rebate, "for leading the charge to prevent price controls and protect the free market in Medicare." A spokesman said Toomey was in favor of cutting drug costs for seniors, but the inflationary rebate would lead to high introductory prices for new drugs.

PhRMA, the trade group, provided funds to Americans for tax reform in 2015 and 2016, according to tax records. PhRMA declined to say if it provided more recent funding.

The conservative lobby group American Action Network launched a $ 2.5 million advertising campaign in August targeting 35 congressional districts and attacking what the group calls "socialist price controls" in the Medicare Part D. A group letter warns of the Pelosi Chamber's "Rx Drug Resumption Plan".

In 2017, the last year for which tax records were public, PhRMA paid $ 1.5 million to American Action Network. Both groups declined to say whether the PhRMA had donated more recently.

To counter industry-friendly ads, groups such as AARP (which approved the Senate Finance Committee's bill) are organizing their own advertising campaigns. AARP's "Stop Rx Greed" campaign includes a red van adorned with slogans attacking the high price of drugs, as well as a TV commercial showing people strolling over-sized images of $ 100 bills covering the face, while the narrator says, "The big pharmaceutical companies do not see us as people. They see us as profits. "

-Jared S. Hopkins contributed to this article.

Write to Peter Loftus at [email protected]