Dec 11, 2019

Big Pharma keeps its status quo after USMCA deal

Illustration: Eniola Odetunde/Axios

Pharma didn't get what it wanted on trade, but it's still doing just fine.

The big picture: In this political climate, with this much scrutiny on drug prices, preserving the status quo is an enormous victory for this incredibly powerful industry. And though it failed to win a new victory on trade, the status quo is perfectly intact.

Driving the news: Democrats and the Trump administration have agreed to a new trade pact among the U.S., Mexico and Canada — without protections for brand-name biologic drugs.

  • At the same time, House Speaker Nancy Pelosi was able to ward off a rebellion from the left and strike a deal that will likely ensure the passage of her drug-pricing bill, Politico reports.

By the numbers: Enhanced Medicare price negotiation under Pelosi's bill would save the federal government about $456 billion over a decade, the Congressional Budget Office said yesterday.

  • The bill would plow most of that money back into new Medicare benefits.
  • CBO said the bill would likely result in about 8 fewer drugs being developed over the next decade, and roughly 30 drugs in the decade after that.

Yes, but: A House vote is probably as far as this bill is going. And its loss in the trade deal was a failure to win something new — not a loss of something that exists.

The bottom line: It's increasingly likely that pharma will be off the hook until 2021 — and that's an enormous victory for an industry that's been criticized from all sides.

Go deeper:

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House passes Pelosi-backed drug pricing bill

Photo: Drew Angerer/GettyImages

The House on Thursday passed a drug pricing bill backed by Speaker Nancy Pelosi that would allow the federal government to negotiate prices for specific drugs on behalf of Medicare and the private market.

Why it matters: Pelosi struck a last-minute deal with progressive Democrats who thought the bill didn't go far enough. Nonetheless, the bill has almost no chance in a Republican-controlled Senate.

Go deeper: Nancy Pelosi's drug pricing bill threatens small biotech companies

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House passes USMCA free trade deal

Photo: Mark Wilson/Getty Images

The House voted 385-41 Thursday to pass a revised version of the U.S.-Mexico-Canada Agreement (USMCA), a trade pact President Trump negotiated to replace the North American Free Trade Agreement.

Why it matters: Completing the trade deal has been one of President Trump's biggest policy goals in 2019. House Democrats' decision to back it earlier this month highlights how they want something concrete to bring home to their constituents ahead of the new year as well, even after voting to impeach the president on Wednesday night.

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Business groups express growing dissatisfaction with USMCA compromise

Speaker Nancy Pelosi and Ways and Means Chairman Richard Neal announce the USMCA compromise. Photo: Mark Wilson/Getty Images

Fed chair Jerome Powell said Wednesday that the new U.S. trade deal with Mexico and Canada should remove some trade policy uncertainty, and that it's a positive factor for the economy.

Yes, but: However, the U.S. Chamber of Commerce and other groups have been registering their unhappiness with the trade deal in recent days.

Go deeperArrowDec 12, 2019