Drug Prices on Debate
How the Republican and Democrat presidential candidates might appeal to voters on this topic is starting to be seen.
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It’s an election year in the United States, and it’s not just the cost of groceries that Americans are concerned with. The cost of medications has been a long-standing debate in the US government. How the Republican and Democrat presidential candidates might appeal to voters on this topic is starting to be seen. But will pharmaceutical companies take a hit?
In the past, according to Allison Gatlin of Investor’s Business Daily, the previous administration under Donald Trump proposed an approach whereby the Medicare prices for drugs given in doctor’s offices are linked to an international pricing index. There was also a plan to pass rebates to Medicare enrollees that would go to insurers and pharmacy benefit managers (1). If Trump is elected for a second term, it is possible that he could seek to implement the use of international price referencing for prescription drug costs, which had failed to get approval during his first term in office (2).
The current Administration, which includes Democrat presidential nominee, Vice President Kamala Harris, is jumping into the ring by announcing lower prices for the first 10 drugs selected for Medicare price negotiation (3). Medicare can negotiate prescription drug prices as part of the power given to it by the Inflation Reduction Act, which was signed into law by President Biden in August 2022.
Harris has also backed a draft guidance to allow federal agencies to exercise “march-in rights” (4). This guidance, if approved, would mean that federal contractors could retain the rights to patents for innovations developed with federal financial backing. Essentially, this is aimed at enabling greater competition within a specified market, such as healthcare.
However, this is not the first time that market competition has been assessed in the US. In fact, this year sees the 40th anniversary of the Drug Price Competition and Patent Term Restoration Act of 1984, which was created to increase market competition between generic-drug companies and pharmaceutical companies. This Act, according to Darby Kozak, PhD, deputy director for the Center for Drug Evaluation and Research, Office of Generic Drugs, in FDA, resulted in a growth in the generic-drug market, with generic drugs increasing from 19% of the market in 1984 to 90% in 2024 (5).
Whichever way the pendulum swings in November 2024, the bio/pharma industry should probably brace itself for an impact.
References
1. Gatlin, A. 2024 Election: Drug Prices Remain a ‘Hot Topic’. Can Pharma Stocks Withstand the Pressure? Investor’s Business Daily. Sept. 19, 2024.
2. Cohen, J.P. Trump Plans to Rescind Funds for IRA Law’s Climate Provisions, but May Keep Drug Price Measures. Forbes, Sept. 10, 2024.
3. The White House. FACT SHEET: Biden-Harris Administration Announces New, Lower Prices for First Ten Drugs Selected for Medicare Price Negotiation to Lower Costs for Millions of Americans. Press Release. Aug. 15, 2024.
4. Congressional Research Service. March-In Rights Under the Bayh-Dole Act: Draft Guidance. In Focus, Feb. 1, 2024.
5. FDA. 40th Anniversary of the Generic Drug Approval Pathway. CDER Conversations. FDA.gov, Sept. 23, 2024 (accessed Sept. 25, 2024). PT
About the author
Mike Hennessy Jr is President and CEO of MJH Life Sciences®.
Article details
Pharmaceutical Technology®
Vol. 48, No. 10
October 2024
Page: 8
Citation
When referring to this article, please cite it as Hennessy, M. Drug Prices on Debate. Pharmaceutical Technology 2024 48 (10).
