Illustration: Gabriella Turrisi/Axios
Democrats' party-line drug pricing legislation will likely cause manufacturers to raise the launch prices of new drugs, the Congressional Budget Office projected yesterday.
The intrigue: The primary driver of the increases would be a cap preventing prices for existing drugs from rising more than inflation. That provision has received bipartisan support in the past.
- But the measure that allows Medicare to directly negotiate prices with manufacturers — which is highly partisan and controversial — would to a lesser extent also contribute to higher launch prices, CBO said.
Between the lines: This isn't a surprise. It's long been expected that the pharmaceutical industry will try to recoup the revenue lost through price caps or negotiations by raising the prices of other drugs.
- But the finding provides ammunition for opponents of the drug price legislation, particularly because it comes from the nonpartisan CBO.