We could have saved $ 25 billion on just 7 prescription drugs with simple medicare reform, according to Dems

A new study by Congressional Democrats has shown that taxpayers would have saved more than $ 25 billion over five years on just seven drugs if Medicare could negotiate prices like other federal programs can.

The House Oversight Committee report states that pharmaceutical companies have increased profits on Humira, Imbruvica, Sensipar, Enbrel, NovoLog, Lantus and Lyrica by raising prices in the United States again and again, especially for Medicare beneficiaries.

“Drug prices are out of control and they are only getting worse,” Representative Frank Pallone Jr., chairman of the House Energy and Commerce Committee, said at a Capitol Hill press conference Thursday to release the report.

“We are all swindled. Consumers are getting ripped off and the federal government is being ripped off. It’s a double whammy.

Sarah Sutton, spokesperson for Pharmaceutical Research and Manufacturers of America, known as Phrma, called the report “just another distraction.”

The report was the latest in a battle with the pharmaceutical industry, one of Washington’s most powerful lobbies and a generous donor to Congressional campaigns.

Democrats want to include a provision allowing Medicare to negotiate drug prices in their $ 3.5 trillion spending bill, while industry tries to defeat the proposal. The House budget committee will develop the bill on Saturday.

“It’s always been a big battle facing the pharmaceutical industry,” said Craig Holman, who handles campaign finance and lobbying issues for the advocacy group Public Citizen. “They don’t want the government to start regulating drug prices. They will do anything to try to prevent this from entering the final legislation. “

Concerns over high prescription drug costs helped Democrats win a majority in the House in 2018, and the following year they passed legislation sponsored by Pallone, D-6th Dist., To allow Medicare to negotiate with pharmaceutical companies and private insurers to benefit from the same lower prices. .

This bill died at the hands of Senate Republicans, but Democrats can this time sidestep that opposition by adding the provision to the spending bill being drafted in accordance with rules that prevent GOP obstruction.

The Congressional Budget Office said lower price negotiations could save taxpayers $ 456 billion over 10 years, money Congress Democrats have proposed Medicare also provide for dental, hearing and vision benefits.

Unlike other federal agencies and in other countries, Medicare cannot use its purchasing power to demand lower prices. This is because President George W. Bush and the Republicans in Congress banned the program from doing so in their 2003 law expanding Medicare to cover prescription drugs.

The Government Accountability Office, the investigative body of Congress, reported earlier this year that the prices in the United States for 20 brand name drugs were two to four times higher than in Australia, Canada or France.

“What we’ve been doing in this country for decades is buy wholesale and pay retail. Who do this ? That’s the power of Pharma, ”said Rep. Peter Welch, D-Vt., During the press conference with Pallone and Oversight Chair Carolyn Maloney, DN.Y.

The House Oversight Committee earlier released a report showing that the largest pharmaceutical companies have spent more money on share buybacks and dividends in the past five years than on research and development.

“They’re not spending it on research and innovation, they’re spending it on buyouts and executive payments,” Maloney said at the press conference.

Sutton, of the Pharmaceuticals Trade Group, said demanding negotiations on Medicare drugs would hurt rather than help consumers.

“This proposal does not address the real issues of affordability for patients, such as high deductibles and other reimbursable costs, and will instead have a direct impact on coverage and access to innovative and life-saving treatments and treatments for the elderly. and people with disabilities, ”she said. .

The pharmaceutical industry spent $ 171.3 million in the first six months of the year lobbying, more than anyone, according to OpenSecrets, a research group that tracks money in politics. The industry also made $ 7.6 million in campaign donations from January through June.

When Pallone’s committee drafted its section of the spending bill, three Democrats joined each Republican on the panel and defeated the drug pricing provision with a tie vote. (It was added to the bill by a vote of the House Ways and Means Committee, which also has jurisdiction over the matter.)

The 29 energy and commerce members who opposed the measure have an average of $ 26,057 in contributions to the pharmaceutical industry campaign this year, according to an analysis by NJ Advance Media of OpenSecrets data. The 29 people who supported the provision earned an average of $ 16,684, or 36% less.

Among the Democratic negative votes was Rep. Scott Peters, D-Calif., Who received $ 134,500 in donations from the pharmaceutical industry this year, more than any other member of the House. Rather, he proposed to allow negotiations only on the most expensive drugs and to limit price increases for older drugs to the rate of inflation.

“I have been forthright in my position to ensure that we reduce drug costs while preserving American innovation that brings us life-saving cures and treatments,” he said after the vote.

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Jonathan D. Salant can be reached at [email protected]. Follow him on @JDSalant.

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