Exclusive: Dems look to roll back drug pricing exemption
Add Axios as your preferred source to
see more of our stories on Google.
Welch at a June hearing. Photo: Chip Somodevilla/Getty Images
Senate Democrats are launching an effort to repeal a portion of Republicans' budget law that exempts certain "orphan drugs" from Medicare price negotiations, citing estimates that the cost of the carve-out has ballooned.
Why it matters: The measure targets a provision that the biotech industry argues is important for innovation, but that Democrats say is actually a costly handout to major pharmaceutical companies.
Driving the news: The bill, first shared with Axios, would repeal a provision Republicans passed in their reconciliation law in July that expands an existing exclusion for drugs that treat rare diseases from the price talks.
- Sponsors Peter Welch (D-Vt.), Ron Wyden (D-Ore.) and Catherine Cortez Masto (D-Nev.) cite a new Congressional Budget Office analysis finding the widened exemption will now cost $8.8 billion over 10 years, up from $4.9 billion.
- The new analysis takes into account that three blockbuster cancer drugs — Merck's Keytruda, Johnson & Johnson's Darzalex and Bristol Myers Squibb's Opdivo — would be cut out from price talks between manufacturers and the government, increasing the lost savings.
What they're saying: "Republicans are forcing seniors with cancer to pay more for the prescription drugs they need and foot the bill for Big Pharma's massive $8.8 billion bailout. It's beyond outrageous," Welch said in a statement.
Between the lines: The Democratic bill would set up a new system where rare disease drugs are only exempted from negotiations if they account for less than $400 million in annual Medicare spending.
- Backers say this protects against drugs that are technically classified as orphan drugs but that are actually major blockbusters with huge sales.
- The measure has little chance of passage in a GOP Congress but is a marker for potential future action.
The other side: The biotech industry and certain patient groups argue that the narrower exemption discouraged innovation for rare diseases.
