While President Joe Biden is trying to reduce the prices of medication to help Americans in an era characterized by soaring costs across the board, he’s facing pushback from some unlikely sources—his own party.
Democrats Clash Over Drug Price Negotiations
Drug prices have famously been high in the U.S., and Biden is trying to make that a thing of the past by using Medicare to slash prices. However, members of his own party are fighting against him.
A new report by Jacobin has shown that big pharma-backed Democrats are trying to keep drugs expensive, stop Biden’s negotiations, and protect the tax loopholes that keep these pharmaceutical companies profitable.
According to the report, Democratic Representatives Scott Peters, Wiley Nickel, Josh Gottheimer, and Donald Davis are working together on bills that aim to prevent Medicare from negotiating prices and roll back any previous price changes.
Pharmaceutical Lobbying
Pharmaceutical companies have lobbied these Democrats with over $300,000 in donations, as they have ties to states with major biotech or drug industry hubs.
If enacted, experts warn these bills could weaken Biden’s negotiation efforts, meaning high prices would remain the norm for lifesaving drugs. While Biden wants to expand Medicare negotiations to 500 drugs by 2034, these new bills would heavily limit that figure.
Critics of Biden’s policies argue that drug negotiations stifle innovation and can deter companies from funding new experiments, especially in rare-disease research, which is often a risky investment. However, experts argue that even with price negotiations, pharmaceutical companies still reap substantial profits, so the incentive is still there to innovate and develop complicated drugs.
Legal Challenges
Jacobin explains that pharmaceutical giants are resorting to legal action to stop drug price negotiations. Companies like Bristol Myers Squibb and Novartis are suing, claiming that Medicare negotiations infringe on their company’s constitutional rights.
Lobbying groups for big pharma spent $36 million last year advocating against the Inflation Reduction Act and for bills that would increase their profits. The Biotechnology Innovation Organization, which represents the biotech industry, specifically lobbied on bills like the ORPHAN Cures Act and MINI Act.
The Inflation Reduction Act aimed to support research on medicines for rare diseases by exempting “orphan drugs” (drugs for diseases that affect fewer than 200,000 people in the U.S.) from Medicare price negotiations, but only if these drugs cured a single rare disease.
This was done to keep the monetary incentive for companies to develop cures for these diseases.
Loophole Exploitation
However, a loophole in the Orphan Drug Act allows drug makers to retain tax incentives and other benefits even if their drugs are later approved for additional uses.
Now, the proposed ORPHAN Cures Act seeks to change the Inflation Reduction Act to exclude orphan drugs entirely, regardless of the number of diseases they treat. The bill has garnered support from both Democrats and Republicans, including previously mentioned Representatives Peters, Nickel, Davis, and Gottheimer.
Peters, known for his ties to the pharmaceutical industry, has received significant campaign contributions from companies with ties to big pharma. He has previously faced criticism for successfully halting a 2021 House Bill that would have given the government power to negotiate on drug prices.
Criticism Surrounding Funding Sources
The majority of the outcry stemmed from an immediate $20,000 donation that was gifted to him from lobbyists, although critics also pointed out that there may have been a conflict of interest as his wife is CEO of an investment firm that has a stake in a pharmaceutical manufacturing company.
For his part, Peters defended the lobbying, stating, “I’m not going to unilaterally disarm and defund my campaign so that Republicans can win. I just think that’s a dumb thing to do.”
MINI Act
The MINI Act, which was proposed by Democrat Nickel and backed by both Peters and Davis, is legislation that aims to extend the amount of time a “small-molecule drug” can be on the market before the government can negotiate its price. Currently, the government cannot request a price change on this category of drugs for seven years from creation, but lawmakers hope to increase it to eleven years.
Nickel argues that small-molecule drugs that utilize high-tech genetic technology, often used for rare diseases, require significant investment and risk and should have a longer period at a price dictated by Pharma companies in order to recoup investment.
Balancing Innovation and Investment
He emphasized that “When we incentivize innovation into one type of drug and not the other, we are hurting the potential for cures and treatments in certain areas medically” and stressed that the MINI act would push medical advancements in important drugs that are used by both pediatric and young-adult populations.
According to the report, lobbyists have spent over $9 million in 2023 alone on pushing the MINI Act, with Nickel receiving at least $41,000. Other Democrats also received huge contributions from pharmaceutical firms in 2023, leading to many backing bills that would limit the scope of Biden’s aims.
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