Rep. Scott Peters was being disingenuous when he told San Diegans in an op-ed that he didn’t vote to keep drug prices high.
He penned an opinion piece saying he didn’t vote to keep drug prices high, but in fact he voted against H.R. 3, a bill to let Medicare negotiate lower drug prices, in the House Energy and Commerce Committee. And he introduced a much narrower bill that he claims is better than H.R. 3 and will do more to help patients and consumers, but that just isn’t true.
First, the bill introduced by Peters leaves out negotiation on drugs that account for more than 83% of Medicare drug spending. Drugs under the retail Medicare Part D benefit aren’t included in the Peters bill at all.
Second, his bill would allow negotiations on only a tiny sliver of drugs under the Medicare Part B program which covers drugs administered in physician offices and hospitals. Peters would only permit negotiations on Part B drugs that no longer have protections to market their drug exclusively without competition — leaving only one of the top 10 most costly Part B drugs eligible for negotiation under the Peters bill.
The Peters bill is not a real Medicare negotiation bill; his bill protects pharma from having to negotiate on the overwhelming majority of drugs and many of the most expensive drugs. By excluding all these drugs, Peters is promoting a bill to keep drug prices high. It is pro-pharma legislation masquerading as Medicare negotiation.
And it gets worse. The bill Peters is promoting would only allow the government to obtain discounts of 25% to 35% while the bill he opposed would yield price concessions as high as 55%.
H.R. 3, on the other hand, would extend lower prices to the private sector where more than half of Americans get their drug coverage. The Peters bill would leave out those folks and limit the savings only to people on government insurance programs.
Peters says he objects “strenuously to the ridiculous and deceptive assertion that the reason I opposed the bill was because I want drug prices to stay high.” But what other conclusion can one draw when his bill excludes the largest portion of retail Medicare drugs from negotiation and blocks bargaining on many of the most expensive infused drugs? His bill will in fact keep prices high.
Of course, Peters pulls out the tired myth promoted by industry that if we negotiate lower prices we will kill innovation. I have an incurable blood cancer and no one cares more about innovation than patients like me. But that claim just doesn’t stand up to scrutiny.
Biopharma profit margins are almost three times the average of the S&P 500. A study showed the pharma sector could absorb reduced revenue of up to a trillion dollars over ten years, maintain current R&D spend and still be the nation’s most profitable industry.
The Congressional Budget Office says if we reduce pharma revenue by up to a trillion dollars over the next decade, we’ll see two fewer new drugs on average each year out of a total of 900. But remember only 10-15 percent of new drugs represent real therapeutic advancement. So we’re trading a tiny impact on drug development in order to make existing drugs affordable now, and in the future.
Done right, negotiations will actually drive innovation. How? Well, if drug companies can raise prices on their current drugs at will to hit profit targets and trigger executive bonuses, they have far less incentive to take risk and invest in R&D to find innovative new drugs that could command high prices and save lives. By creating a negotiating framework that rewards value — and making clear that we will pay the best prices for the best drugs — we will actually stimulate innovation.
Perhaps most importantly, the engine of the greatest innovation is the federal government. Every one of the 356 drugs approved by the FDA from 2010-2019 are based on science paid for by taxpayers through the National Institutes of Health.
We can restore balance to ensure we get the innovation we need at prices we can afford.
Scott Peters has another chance to vote in favor of a real plan to lower drug prices when the reconciliation package comes to the House floor. If he wants to avoid being contradicted about his claims, he must vote in the interest of patients in his community, not as a tool of Big Pharma.
David Mitchell is a cancer patient and founder of Patients For Affordable Drugs, the only national, bipartisan patient organization focused solely on policies to lower drug prices.