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Thursday, June 1, 2023
June 1, 2023

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In Our View: Lowering drug prices won’t hurt Big Pharma

The Columbian

The defection of three congressional Democrats on a bill designed to lower prescription drug prices is bad news for consumers. It also represents the power of the pharmaceutical industry and the way in which misleading rhetoric can infect public debate.

Working on a spending bill for social services, House Democrats have aimed high. They are seeking increased coverage for people who don’t have health insurance, subsidies for those who purchase their own coverage, and increased dental, hearing and vision benefits through Medicare. To help pay for it, they have taken aim on lowering drug prices.

A measure that would link the prices of certain prescription drugs to those paid in other countries was devised to help offset the costs of the other priorities. The legislation would allow Medicare to negotiate drug prices with pharmaceutical companies, using overseas prices as a guide. The approach, estimates suggest, could save the government around $500 billion over a decade, with that money coming out of the pockets of the pharmaceutical industry.

That is a good idea. A study this year from the RAND Corporation found that prescription drug prices in the United States are 2.56 times higher than those in 32 other nations included in the survey. Brand-name drugs on average cost 3.44 times as much in the United States.

Still, three moderate Democrats — including Kurt Schrader of Oregon — on the House Energy and Commerce Committee joined Republicans on Thursday in voting against the provision. The decision to drop the proposal from President Joe Biden’s 10-year, $3.5 trillion spending plan was not necessarily fatal. The House Ways and Means Committee kept it alive by approving similar drug-pricing language.

Regardless of the provision’s eventual outcome, it provides an abject lesson in the machinations of American health care and the legislative process. The pharmaceutical industry and its acolytes argue that big revenue is required to facilitate research and the development of new medications.

“I just don’t think paying for a lot of things by crippling investments in life sciences is really the way to go forward,” said Scott Peters, a California Democrat who voted against the provision. “Losing the investment in pharma is too big a price to pay.”

Evidence does not support that assertion. In May, while questioning the CEO of pharmaceutical company AbbVie, Rep. Katie Porter, D-Calif., raised some interesting points. Porter said that AbbVie spent $2.45 billion on research and development from 2013-2018 while spending $4.7 billion on advertising and $50 billion on stock buybacks and dividends.

“The Big Pharma fairytale is one of groundbreaking R&D that justifies astronomical prices, but the pharma reality is that you spend most of your company’s money making money for yourself and your shareholders,” Porter said.

Similar accusations apply to other pharmaceutical companies, and they should come to mind the next time you see a TV commercial for the latest drug to treat irritable bowel syndrome or eczema. They should come to mind the next time your name-brand medication doubles in price.

Interestingly, according to OregonLive.com, Schrader “inherited a fortune from his grandfather who was a top executive at pharmaceutical giant Pfizer,” and “has accepted large donations from big pharma during his seven terms in Congress.”

The large donations can be found throughout Congress, allowing the system to be skewed against consumers for the benefit of pharmaceutical companies.