Broad national drug pricing controls aren't likely to be signed into law this year after President Joe Biden, facing congressional opposition, left them out a legislative negotiating framework for a package that includes health insurance, education and more support for household income.
The announcement Thursday likely ends all hope of enacting a law authorizing the federal government to negotiate, and potentially reduce, prescription drug prices. But smaller measures could still make it into the package, such as provisions that target Medicare payments for biologic drugs administered in healthcare facilities.
"No one got everything they wanted, including me, but that’s what compromise is," Biden said in announcing the framework.
Medicare negotiation of drug prices has been a signature proposal for Biden's allies among congressional Democrats. But the idea has been fiercely resisted by drugmakers, whose lobbying with key moderates has built enough opposition that it and other price restraints won't be part of the social package, which includes expansions in healthcare and health insurance, pre-school education and child tax credits.
The industry group Pharmaceutical Research and Manufacturers of America (PhRMA) said a federal price negotiation bill would cause a "nuclear winter" for biotech innovation when the House of Representatives passed it in 2019. With Republicans in charge of the Senate and White House at that time, the bill's passage was unlikely.
But the potential for price controls gained traction when Democrats won control of both houses of Congress and the presidency beginning this year. Advocates for Medicare price negotiation became more optimistic, and Wall Street analysts believe the looming threat has been suppressing the share prices of biotech and pharma companies.
Industry opposition, however, proved too great to overcome for the slim Democratic majorities.
Following Thursday's announcement, PhRMA shifted the pricing discussion to measures that would cut drug costs for consumers. "We continue to stand ready to work with policymakers this year to enact meaningful reforms that will lower out-of-pocket drug costs for patients," the group said in a statement.
Yet some Democrats are still pushing for more. House Speaker Nancy Pelosi, D-Calif., is said to be working on a less-ambitious drug pricing bill. STAT reported that Pelosi, along with key committee chairs, are pushing for federal price negotiation on products for which the patent protection afforded by the Food and Drug Administration has expired — typically five years for chemical drugs and 12 for biologics.
A separate focus may be on biologics administered to Medicare patients in doctors' offices, for which the federal government reimburses on the basis of average sales prices. These drugs have been seen as a potential savings target for years through price negotiation or similar mechanisms, and the growth in spending on such medicines has only increased calls to bring costs under control.