As part of its $740 billion reconciliation deal, the Senate on Sunday, August 7, passed legislation with drug price controls. The Inflation Reduction Act, as it was passed by the Senate on Sunday, would enact drug pricing controls on the medications that Medicare spends the most money on annually.
All Senate Democrats voted in favor of the legislation, and all Senate Republicans voted against it. The House, which is controlled by the Democrats, is anticipated to vote in favor of the measure this week after Speaker Nancy Pelosi vowed speedy action.
“An updated Avalere analysis finds that under the changes to the negotiation policy included in the revised version of the Senate reconciliation package, the 100 Medicare Part B and D drugs that are likely to be selected for government negotiation from 2026–2031 represent almost half (45%) of all Part B and D drug spending in 2020,” said healthcare consulting and research firm Avalere.
The legislation’s restrictions on drug manufacturers’ revenue will make it less attractive to invest in R&D and innovation, according to the Biotechnology Innovation Organization (BIO). As the U.S. biopharma business contracts, there will be fewer treatments as well as a loss of employment and investments, BIO and Bio.News have explained repeatedly.
According to The New York Times, SVB Securities warned investors that the first pharmaceuticals to be hit by the price controls might be diabetes and obesity medication Ozempic, the cancer treatment Imbruvica, and the blood thinner Eliquis.
The Senate Parliamentarian decided on Saturday, August 6, that a provision requiring drug manufacturers to pay rebates for price rises that are more than inflation could only be applied to Medicare, not private insurers, who buy drugs, according to PBS News. The majority of the bill’s drug price provisions were still included.
Senate’s drug price controls mean ‘fewer cures’
“Nothing we heard from the lengthy floor debate on the Senate floor over the past two days can take away from the fact that every credible analysis of the Inflation Reduction Act comes to the same conclusion: fewer cures for patients. For that reason, we remain in staunch opposition to the government price control schemes included in the final reconciliation package passed today,” BIO President and CEO Dr. Michelle McMurry-Heath said in a statement on Sunday night.