Washington: America’s large drug companies spent more than any other industry to lobby Congress and federal agencies this year but still suffered a major defeat after failing to stop a bill that allows the government to negotiate prices on select drugs.
Despite the pharmaceutical industry’s spending at least $US142 million ($200 million) on lobbying efforts, the $US430 billion Inflation Reduction Act to change climate, health and tax policies will become law.
A win for Democrats: President Joe Biden gives a thumbs up as he boards Air Force One at Andrews Air Force Base.Credit:AP
The Democratic-led US House of Representatives approved bill on Friday that is seen as the biggest climate package in US history, delivering a major legislative victory for President Joe Biden ahead of the November 8 midterm elections.
It cleared its largest hurdle last week with passage in the Senate, without any Republicans joining Democrats in voting for the bill, followed by passage by the US House of Representatives.
President Joe Biden will sign it into law next week.
The legislation to fight climate change and lower prescription drug prices aims to cut domestic greenhouse gas emissions. It will also allow Medicare to negotiate lower drug prices for the elderly and ensure that corporations and the wealthy pay the taxes they owe. Democrats say it will help combat inflation by reducing the federal deficit.
The bill’s imminent enactment represents a rare legislative defeat for the pharmaceutical industry and sets a precedent for curbing drug prices in the world’s most lucrative market for medicines, according to congressional and industry officials.
“This is a major first step forward,” Democratic Senator Patty Murray, chair of the Senate’s health committee, told Reuters. “It is the first time we’ve been able to make this kind of step to lower prices on pharmaceuticals … which will set the stage for us to do more.”
Health policy experts say the bill reflects the pharma industry’s weakening influence on the Democratic Party and that its main argument against price negotiation — that it stifles innovation — is no longer persuasive for the public.
A Kaiser Family Foundation poll in October found that 83 per cent of Americans, including 95 per cent of Democrats and 71 per cent of Republicans, want the federal Medicare health plan for seniors to negotiate prices, a provision of the bill.
The latest legislation is a tough pill to swallow for US drug companies.Credit:Tanya Macheda
“The pharma guys upped the ante in throwing everything but the kitchen sink against this,” said Senator Ron Wyden, a Democrat who chairs the finance committee.
The industry’s powerful trade association, Pharmaceutical Research and Manufacturers of America (PhRMA), urged senators in a public letter to reject the bill. Its president, Stephen Ubl, told Politico that lawmakers who vote for it would not “get a free pass”.
“Few associations have all the tools of modern political advocacy at their disposal in the way that PhRMA does,” he said.
A PhRMA spokesperson said the group would continue to work with all lawmakers. He did not address Ubl’s comments about holding lawmakers accountable.
“We may not agree on every issue, but we believe engagement and dialogue is important to promoting a policy environment that supports innovation, a highly-skilled workforce and access to life-saving medicines for patients,” said spokesperson Brian Newell in an email.
The industry has long warned that price curbs in the US market would hamper companies’ ability to invest in developing new drugs.
With help from Democrats backed by the industry, the bill’s provision for drug price negotiations was scaled back in November, allowing Medicare to focus on an annual maximum of 20 of the costliest medicines by 2029, instead of an initial proposal to help reduce prices for 250 treatments.
Democratic staffers, industry executives and policy experts said that the bill’s broad popularity, combined with pressure on Democrats to pass meaningful legislation ahead of midterm elections in November, helped overcome the pharma industry campaigning.
“With this vote I would imagine Pharma realises they do not have a lot of friends left among Democrats,” said Larry Levitt, vice president for health policy at KFF.
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