By Gabrielle Wanneh
July 30, 2021
Nine in 10 Americans believe major drug pricing reforms are needed to quell increasing drug costs, according to a recent West Health and Gallup poll.
The poll found that 77% of U.S. adults believe the government should limit price hikes for prescription drugs, and 81% support letting Medicare negotiate drug prices. The poll also found that most Americans believe drug price negotiations should be made possible for all Americans regardless of insurance status.
The National Coalition on Health Care and West Health Policy Center released the poll results Wednesday (July 28) at a briefing that was the second of a two-part series, the first of which highlighted the effects of high drug prices and coverage gaps on communities of color.
In the last year, 25 million Americans skipped a prescription to save money, according to the poll.
Drug price negotiations are one of several measures included in House Democrats’ H.R. 3, and Senate Finance Committee Chair Ron Wyden (D-OR) said he is going to include some form of Medicare price negotiation in the drug-pricing bill he is writing. Democrats say they intend to use drug-pricing measures to help pay for adding benefits to Medicare, expanding Medicaid coverage in hold-out states and making Obamacare plans more affordable as part of an upcoming partisan budget reconciliation package.
Drug makers argue that Medicare drug price negotiation would harm innovation because it would cut into their research and development funding.
But many lawmakers don’t buy that argument. Findings from a recent House Oversight and Reform investigation suggest that large brand-drug makers spent more on stock buybacks, dividends and executive compensation than on R&D from 2016 to 2020. The committee reviewed 14 large drug makers and found that they spent $577 billion on stock buybacks and dividends, $56 billion more than they spent on R&D over the same period. Committee Democrats said those findings show drug industry warnings about price negotiation are “overblown.
“Pharma does some research, but a lot of the pharmaceutical drugs are not the product of research done by the company who owns it. They’re the product of research of the company they bought.” Rep. Peter Welch (D-VT) said during Wednesday’s briefing. “Many drugs are created and then purchased by a big pharma company. They pay billions of dollars for it and then the day after they purchase that drug, they quadruple the price of that medication. And then you and I and our healthcare system pay the cost of that acquisition.”
Bentley University Professor Fred Ledley said it’s possible that Medicare drug price negotiation might slow innovation, but new research suggests that potential negative impacts can be mitigated due to the increasing role of smaller drug companies in drug development and the increased use of “agile” management by drug makers to maximize resources for product development.
Out of three scenarios studied, researchers found that innovation might not be reduced at all in the case of cost reductions to early phase trials, and at most innovation might be reduced by 8.4% in the event of cost reductions to late phase trials.
“Industry best practices are sufficiently robust to provide patients with both the relief of high drug prices and the innovation they need for new therapies in the future,” Ledley said. “Policy does not need to make a false choice between these two endpoints.”