The recent US Midterm elections were highly speculated about, and US citizens watched closely to see how it turned out. In anticipation of a red wave, the Big Pharma companies had a lot riding on these midterms. With the Inflation Reduction Act and the Biden government’s signature drug policy, the US pharmaceutical companies were looking for a reprieve this election, and the chances were not in their favor this time around.
What makes Biden’s drug policy so significant?
Some knowledge about the US healthcare system is necessary to understand why the Biden administration’s stance on drug prices is essential. It appears that when it comes to medication, Americans pay more than thrice the rate people pay in other countries for the same medicine. In most countries, the government has a hand in setting the prices of essential drugs, whereas, in the United States, drugmakers are given free rein over the prices.
Drug prices keep soaring at every turn with no guidelines for transparency or accountability. For instance, if one were to apply the same pricing practice as drugs to another essential item, such as gas or milk, the expected rate would come up to around $13.
Even during peak times of inflation, the retail price of the most commonly used brand-name drugs has increased more than 300% in the last 15 years. On the other hand, general inflation only rose by 32% during the same period, according to a 2021 AARP report that analyzed the retail prices of those medications.
Having Medicare step in to negotiate a lower price for these drugs is the only way to support the people who have to choose between buying lifesaving drugs or putting food on the table. When prescription drug prices go unchecked, pharmaceutical companies have the freedom to extort taxpayers. Moreover, drug companies are protective of their profits. They spend millions on protecting their profits. For this purpose, in 2020 alone, over $161 million was spent on lobbying and nearly $6.6 billion on advertising.
The dampened hopes of pharma companies
Big Pharma had their hopes in a Republican-controlled Congress to slowly chip away at the drug policy. However, a divided Congress will likely bring about the changes they looked forward to. Now, drugmakers can only channel their energy into other priority areas.
For instance, new drugs are hitting the market with exorbitant prices despite the earlier $500 billion cut. Republicans are also looking to make the drug policy less burdensome to the drugmakers. They also request a reset or extension for negotiation exemption when a drug is proven effective for an additional illness and gets approved for this purpose.
In this bipartisan setting, pharmaceutical companies need to appease both sides to reach a favorable outcome. With big plans like ‘Cancer Moonshot’ in Biden’s book, it is improbable that a significant change can be brought to the drug policy in the Inflation Reduction Act, and any effort to weaken will result in slow progress.
