Drug Costs

GOP, Progressives, Insurers – All Cast Skeptical Eye At Pelosi Drug Plan

September 24, 2019 11:43 am

House Speaker Nancy Pelosi (D-Calif.) formally released her long-awaited drug-pricing bill last week, and very few individuals and organizations endorsed it outright. 


To refresh, as CNBC explained, the components of the legislation include:

- Adopting an international pricing index (IPI); 

- Allowing the U.S. government to negotiate prices for up to 250 prescription medications and assessing fines on companies that refuse to negotiate; and

- Imposing penalties if pharmaceutical companies raise the price of their products faster than the rate of inflation.


The speaker has been working on her plan for months, reportedly reaching out repeatedly to progressives and special-interest groups, including insurers. 


She received little praise for her work. 


Despite the fact that the White House has proposed an IPI, Republicans on the U.S. House Energy and Commerce Committee accused the speaker of “pushing a socialist proposal to appease her most extreme members.” House Ways and Means Committee Ranking Member Kevin Brady (R-Texas) also criticized the plan, saying the “so-called government negotiation idea is more accurately a ‘dictate or destroy’ price control power.”


According to STAT News, progressive Democrats were also unsatisfied with the negotiation provision, but for different reasons, arguing that the speaker’s outline doesn’t go far enough.


Institute for Policy Innovation Resident Scholar Dr. Merrill Matthews said the negotiation provision would allow for “dictation, not negotiation” because “either the company accepts the government’s price or it forfeits nearly all of the revenue it would receive from the sale of the drug.” He also explained, “Since the government subsidizes most of the cost of drugs under Medicare Parts B and D, it has a very strong financial incentive [for the government] to lowball the price.”


According to Roll Call reporter Lindsey McPherson, when asked if she would consider a bill that did not include price negotiation, Speaker Pelosi said “no, absolutely, positively no.”


Several organizations issued statements criticizing the proposal because they believe it will impact American innovation. The Information Technology and Innovation Foundation said, “Speaker Pelosi’s drug-pricing plan threatens the future of one of America’s most innovative industries. Policies that significantly reduce drug revenues will limit the resources available for the next generation of drugs, resulting in fewer new drugs down the road. … Americans deserve affordable drugs, and the best ways to lower prices are by extending affordable insurance, reducing regulatory costs, and increasing investment on basic life-sciences research.”


The right-leaning American Action Network (AAN) agreed, but focused on the patient impact. In a statement, AAN said, “This plan will have devastating consequences for any American who ever needs a prescription medication, and lawmakers must reject it at once.” Representatives of California’s life sciences sector agreed. A trade association representing the industry said, “Such a sweeping proposal sends the wrong message to innovators and investors who need a solid, fair, and value-based market environment to research and develop the next-generation of breakthrough medicines.”


Other experts and patient groups also said they oppose the legislation.


Ted Okon, executive director of the Community Oncology Alliance, said neither Speaker Pelosi’s bill nor the one offered by the Senate Finance Committee “look at drug pricing holistically.” 


Pharmaceutical pricing expert Ed Schooveld agreed. He told HealthLeaders that the $2,000 out-of-pocket cap was the “only sensible part of the legislation.”


As Bloomberg Government reporter Alex Ruoff explained, even America’s Health Insurance Plans, which has embraced policies like the IPI, refused to endorse the Pelosi plan.


Two hearings in the U.S. House of Representatives will happen this week on the proposal. The Alliance will be closely monitoring these discussions to see if there’s room to improve the proposal and to better protect future medical innovation in the United States.